How two products word the offerCello conducted three different types of user research:
Research I: Cello conducted qualitative interviews with B2B SaaS users (n=20) to understand different types of referrers and incentives (referred to below as research I).
Research II: Cello administered a quantitative survey to B2B SaaS users (n=100) to determine the optimal reward amount for product referrals (referred to below as research II).
Research III: Cello analyzed its own platform data (n = 4 million B2B SaaS referral users) on various incentive structures (referred to below as research III).
#1 Rewards should be relevant (and monetary)
In B2B, personalizing incentives is key. In-product rewards, like Dropbox's extra storage, work well in B2C because the referrer benefits directly. However, in B2B, where referrers lack budget control, these rewards hold less appeal.
Monetary incentives or personally beneficial rewards are typically more effective because the individual user benefits from them, not the company. For example, Airtable’s account credits may not entice B2B users as much as direct cash rewards. In contrast, tl;dv combines a social incentive (discount for friends) with an extrinsic incentive (cash reward), creating a more compelling offer for the individual user.
Cello's research (Research I) highlights these psychological drivers, and while user bases vary, B2B SaaS users are primarily transactional rather than social referrers.
Incentives need to be relevant to your users. The majority of transactional referrers are driven by financial rewards, while social capital referrers value social incentives, like offering friends a discount. Combine both of them.
#2 Ensure the reward is meaningful but achievable
In B2B, larger Annual Contract Values (ACVs) allow for higher rewards, but incentives must be tailored to your product specifics.
Start by calculating a "reward cap" based on your ACV, for example, setting a percentage of Monthly Recurring Revenue (MRR) you pay out with a cap of $2,000 (see Research II, elaboration in #3 below).
The key takeaway from research II: Higher ACV products are associated with higher reward expectations from referrers.
The figure below outlines expected reward ranges based on product ACV.
Study on expected reward ranges (Source: Cello)Rewards must be attractive to encourage sharing. Excessively high caps risk appearing unrealistic. Balance compelling incentives with attainability (see Research I).
Now let’s take one step further and analyze different set-ups to find the best one for you.
#3 Tie rewards to referred revenue, and make them recurring where you can
B2B products typically have smaller user bases than B2C products, making it harder for referral programs to go viral. To overcome this, focus on strategies that encourage repeated engagement. One effective method is offering ongoing revenue sharing from referred subscriptions.
B2B products have higher contract values, enabling extended reward distribution. Offering rewards as a percentage of monthly subscriptions over time creates recurring payouts, serving as ongoing reminders and motivating users to refer more frequently. This approach helps build a steady revenue stream.
Recurring rewards keep referrers engaged, make fraud far less profitable, and make a near-zero payback period and an LTV:CAC ratio above 3 much easier to hold, because every payout comes out of revenue the referral has already generated.
There is an exception, though. A recurring model is not always the right scenario, and rewarding intermediate milestones before revenue is generated can boost engagement and accelerate referral activity. The right reward model depends on two key factors:
- Annual Contract Value (ACV): A recurring reward model with small monthly rewards (e.g., under €5) may feel insignificant when ACVs are low. In these cases, one-time rewards create lasting impact and motivate referrers more effectively.
- Time to Revenue: Maintaining referrer motivation can be challenging for companies with long sales cycles. Offering one-time rewards upfront helps sustain engagement until revenue is realized.
The figure below highlights these dimensions. High-ACV products with short sales cycles suit recurring rewards (e.g., a percentage of MRR). For longer sales cycles, intermediate one-time rewards are recommended to keep referrers engaged.
Reward structure matrix: one-time rewards versus percentage of MRR by ACV and time to revenue (Source: Cello)Below are potential reward setups for companies across different ACV ranges.
Tuning your reward parameters: percentage of MRR, reward cap, one-time rewards, example companies and new-user discount by low, medium and high ACV (Source: Cello)For referee discounts (new users), ensure the discount is substantial enough to stand out from other campaigns.
In Cello's data, a new-user discount of around 30% for a limited period (e.g. 6 months) improves both the sharing and the sign-up rate. Cello has not published the underlying test, so treat the specific combination as a starting point rather than a benchmark.
#4 Rewards should be multisided
A common pitfall in referral programs is focusing solely on rewards for referrers while neglecting incentives for new users. It's equally important to provide tangible benefits for new users to drive sharing and conversions.
Research I and III, along with insights from Andrew Chen, emphasize the importance of appealing incentives to attract new users. Discounts are simple, appealing, and work well, especially for products with fast value delivery and free trials.
“I’ve also seen B2B contexts where, in a professional setting, people are more likely to invite others if they are perceived as altruistic, such as giving out a large discount to new users.” Source: Andrew Chen.
Cello's user research shows symmetric rewards (e.g., €500 for both referrer and referee as a discount) deliver the best results.
Cello platform data (n = 4 million B2B SaaS referral users) shows dual-sided rewards lifting sign-up rates by 140% and purchase rates by 270% against single-sided programs on the platform.
#5 The way you communicate and visualize your reward matters
Keep the message clear and focus on the key details of the referral program. Users should quickly grasp how much they can earn and understand the benefits for their peers, leveraging the program's social incentives.
Uber demonstrated this well by combining two metrics: initial signup conversion and first-month earnings (for completing a set number of trips). This approach allowed them to advertise a headline reward of over $3,000, significantly outperforming the earlier $200 figures in A/B tests. Larger numbers consistently drive better results as confirmed by Research I.
Highlight the maximum reward cap in the headline
Numbers and presentation play a crucial role in influencing user behavior. Take inspiration from Amazon by crafting a compelling, attention-grabbing message that motivates users to share.
In Research I, Cello tested different referral screens with randomized orders to reduce 'Primacy Bias.' One group saw a high-cap reward headline first (Prototype 2), while the other saw a standard "Share and Earn" heading (Prototype 3). The results underscore the importance of prominently showcasing maximum rewards.
Display a realistic maximum reward target prominently, ideally in the headline, to set clear and achievable expectations for users.
Provide metrics on rewards earned throughout the referral funnel
Cello also tested various screens highlighting different metrics (e.g., referrals made, rewards earned, savings for referees):
- Social referrers responded positively to information about the benefits for others.
- Transactional referrers found this feature appealing as it displayed their earnings.
Share an overview of conversion funnel metrics to encourage users to continuously share the referral link. Gamify it! This will increase the activity of both social and transactional referrers.
Chunking breaks information into smaller, digestible sections (e.g., "You Get" and "Your Friends Get"). This approach makes reading and understanding faster and easier.
Cello's research showed that many users skimmed for numbers and headings rather than reading the full text. Chunking caters to these users by helping them quickly grasp key details and complete tasks efficiently.
We recommend using a chunked, easy-to-scan format on both mobile and web. If possible, A/B test this format across different customer types and products to compare conversion rates against your current design.
#6 A/B test incentive types and reward communication
This is the most important advice. As suggested throughout this piece, there is no one-size-fits-all solution; instead, there are general guidelines and recommendations.
Cello's internal research and data indicate that you should follow these best practices to identify the most suitable reward setup. However, the final choice largely depends on understanding your product and users.
Ideally, you have the capacity to run A/B tests on different reward types, caps, and ways of presenting them to your users to find out the perfect mix.