The SaaS industry has seen astronomical growth in the past few years. In fact, recent marketing forecasts from Microsoft and other research agencies have projected that the spend on SaaS offerings will continue to grow at a 19.4% compound annual growth rate, reaching $141 billion in 2019, according to a recent Forbes article. And while that’s great news, the SaaS ecosystem has become extremely crowded with little elbow room to move around or differentiate.

What does this mean? Customer acquisition has not gotten any easier for the SaaS industry even after considering the large amount of interest. And convincing your target buyers that you’re the only one who can solve their problems isn’t a workable strategy anymore. What is needed is a new and authentic customer acquisition and lead generation strategy to break away from the herd. But sometimes, the most persuasive strategies are old concepts modernized for today’s marketing challenges.

Aristotle’s Modes of Persuasion is an old and well known concept concerning the elements that are used to create a persuasive argument. These elements are Ethos (speaker’s credibility), Pathos (emotional influence) and Logos (logical reason). Now, these seem like pretty simple concepts that are commonly used in sales strategies, but it isn’t the inclusion of them that makes an argument about your brand effective, as opposed to how it’s executed. That’s where referral marketing comes.

Referral marketing is a newer concept that turns current customers, partners and employees into advocates that facilitate a warm introduction between you and people in their network who are in the market for your SaaS product. They are the key to making Aristotle’s Modes of Persuasion successful in the SaaS industry’s current state. Their unique position gives Aristotle’s Modes of Persuasion unusual marketing and selling power.

Applying Aristotle’s Modes Of Persuasion To SaaS Customer Acquisition

Ethos (Credibility)

Credibility is a very important part of selling. But credibility takes time and if you’re a startup, it’s not something that is easily obtained. According to Aristotle, there are three characteristics someone must believe you possess in order to appear credible: Good intention, competence and empathy.

But you can’t just tell your target buyers that you are credible and have them believe it. They need proof. Advocates have experienced your product and can give you the credibility you need to keep your selling persuasive by providing a detailed account of:

  • What it was like to work with you (good intention);
  • How your SaaS product works (competence); and
  • How well you empathize with them and are willing to help correct it (empathy).

Through referral marketing, customers and partners give SaaS startups the credibility they need to differentiate.

Pathos (Emotional influence)

It can be very difficult for SaaS companies to have an emotional influence on buyers, especially B2B SaaS companies. The fact is, it’s very hard to have a target buyer connect any positive emotions to a SaaS company directly. But referral marketing has another way. Your customers and partners already have an established positive emotional connection with their peers. When they refer them to you, they expand the trust and positive feelings encompassing that relationship to include you and your product.

That’s one reason why referral marketing is so powerful and can increase a buyer’s likeliness to purchase by 400% when referred by a friend, according to Nielsen.

Logos (Logic)

Logic is something that can be communicated in many forms. So how does referral marketing add anything special to logic? As Aristotle pointed, logos is not just fact, but the appearance of fact. The truth is that fact has become subjective and, therefore, highly tested by your target buyer before they even come close to accepting the so-called fact. Your target buyers know that every company says they are the best and they have logic to back it up, but that doesn’t mean that they trust that a specific SaaS brand is the best fit for them.

Referral marketing adds substance to a SaaS company’s facts and logic by having it validated by someone who has tested it. Your customers and partners have used your product and know if it stands up to what you claim. They are the best source of substantiating what you’re saying and making your target buyer comfortable enough to commit to a purchase.

Referral Marketing Software Differentiates SaaS Companies

These three different modes of persuasion are a large part of the buying process. Referral marketing software creates a direct channel to prospects that infuse these modes into SaaS businesses. That’s why referral marketing has been shown to have a 35% conversion rate from referral to purchase, according to Amplifinity.

SaaS companies are finding referral marketing to be a natural extension of the subscription service mentality by increasing customer engagement and lifetime value compared to non-referred customers by 16%, according to the Harvard Business Review.

Decide if a referral program is the right for you. Take the quiz, Are referrals a fit?