Referral marketing is the unicorn of B2B marketing.
In simple terms, referral marketing is when you get your customers to tell their friends about you.
But referral marketing isn’t just for brick-and-mortar businesses. In the B2B space, 84% of decision-makers start their buying process with a referral. Which is bad news if you don’t have a referral program in place—you’re pretty much leaving money on the table.
Having a B2B referral program can add a ton of additional revenue into your business (with minimal effort). Let’s dive into how you can build an automated referral machine for your B2B business.
The value of a B2B referral
“Hey, I’ll have what they’re having!”
We always trust what products or services our friends, peers, and colleagues recommend. And in the B2B world, it’s no different.
At its core, B2B referral marketing drives brings four key benefits to your business.
1. Referrals are a trusted lead source that outranks anything else
Referrals come from real-life, paying customers. They’re legit. And that’s why they hold so much weight with leads and prospects.
The numbers back this up. On average, 14% of visitors to a referral page will take action, which shows they’re intrigued about a product and what it’s all about.
2. Referrals are cheap
Okay, so you’ll have to put in a bit of time to set up a referral system for your business. But once it’s all built, it’s basically like having someone handing out digital flyers for your business, 24/7.
Once it’s up and running, the only overhead your company has is whatever you’re offering up as a referral reward. (More on that later.)
3. You’re usually tapping into a qualified market
In B2B, a lot of businesses and their employees know each other. If you’re offering up a referral reward to a current B2B customer, chances are, they know 10 companies just like theirs.
It’s like getting somebody to do your prospecting—for free. Can’t argue with that.
4. It’s a way to reward your current, loyal customers
You’ve already got paying customers who love your product. Offering a referral rewards program can make them even happier.
It requires minimal effort on their end (a couple of emails and they’re done), and they get a discount or reward to keep using a service they’re already using. It’s what we like to call a win-win.
Why does referral marketing work so well compared to other marketing techniques?
Referral marketing is the digital world’s answer to word-of-mouth marketing.
It gets your brand name out there. It allows prospects to test out your service. And it rewards your current customers. All at once.
If you strip it back, the nuts and bolts of referral marketing are super simple. It’s built on trust (from the referrer) that they aren’t recommending a dud. And because a referrer is likely to recommend your product to prospects who are more likely to sign up (because they want their reward!), the quality of your prospects instantly skyrockets.
But here’s the bad news. Only 30% of B2B organizations are actually asking for referrals from their customers. Are you one of them? Ouch. Let’s dive into how you can build your own successful B2B referral program.
The 3 secret ingredients in a successful B2B referral marketing program
Okay, it’s a no brainer as to why you should have a referral marketing program in place to drive revenue to your business.
Before you start, your business needs to be doing a few key things to make sure people will actually want to refer you in the first place.
You need to be:
- Keeping up communication with your current customers
- Giving your customers excellent customer service and support
- Have a great service/product (duh!)
Then, once your referral program is up and running, you need to be:
- Making it easy for your customers to refer you to other businesses in the first place
- Providing the same great experience you gave to the referring customer to the new customer (failing to do this is a massive blow to your referral program)
- Saying a massive “thanks!” to your customers who participate in the referral program
- Tracking how successful the program is with referral program software and looking for ways to improve it to make sure it keeps bringing in revenue
Ready? Let’s get building.
Referral ingredient #1: Offer rewards
One of the best ways to encourage referrals is to offer a reward for the referrer’s time. There are a ton of options when it comes to offering up rewards in exchange for a referral.
Could you unlock features for them within your product?
The referring customer may be subscribed to your entry-level product. By offering to open up the next product level for them in exchange for a referral, not only does it cost you squat, the customer wins. And they win big.
Dropbox did just that—and they got 4 million new users in 15 months.
It was simple. A customer referred Dropbox, and they were given 500mb of extra space for each new referral.
And one of the reasons it was so successful? DropBox made it possible to refer their product with virtually no effort on the referrer’s end. All they had to do was write out an email address, or upload a referral code to social media. That’s it.
Genius? We think so.
Could you offer up a discount on your product?
If you’re not willing to give away upgrades or parts of your product for free, that’s cool. Try a discount instead.
Everybody loves discounts. If your product is subscription based, this method of referral marketing is super simple. Offer up a certain percentage discount on a customer’s package for a set amount of time (either monthly, quarterly, or annually) in exchange for a referral.
That way, you aren’t giving away entire upgrades for free, but you’re still not losing out.
Referral ingredient #2: Make the most of those new leads
Here’s the thing about referral marketing programs: they’re only successful if you’re following up the new prospects in your sales funnel.
The first part of doing this successfully is figuring out how to capture and qualify the leads. If you want to put this on autopilot and nurture your leads as soon as they enter your sales funnel, using a CRM might be the answer.
You can even segment your referral list, so they are sent a custom email marketing sequence.
Nurturing a new lead as soon as they enter your sales funnel is crucial. If you don’t have a system in place to do this, the chances of your referral program being successful are slim.
Take the grunt-work out of email marketing.
Nutshell’s Constant Contact integration syncs your contacts in one click, automatically subscribes leads to the appropriate email lists, measures the engagement of your email marketing, and lots more.
Pro-tip: Try setting up a breadcrumb trail on your referral link to activate it. A breadcrumb technique allows a sales team to collect some more in-depth information about a prospect than just a name and email address.
That way, your sales team will be able to follow-up with the prospect easier, as they’ll already know the prospect’s role at the company and what their pain points are. Boom!
Referral ingredient #3: Split test your referral program
Would this even be a real list if we didn’t recommend you split test your referral program?
Tracking key metrics and benchmarks are crucial to the success of your referral program, especially in its early stages.
Without split testing—you’re flying blind. Your rewards might not be good enough, or your participation rate might suck. Finding out these metrics early on makes it easier to fix them.
If you’re using a referral program software like ReferralCandy, the platform automatically updates industry benchmarks and tells you if your program is up to scratch:
Not using software and you’re building a referral program yourself? Then you’ll need to work out what benchmarks you need to be hitting.
Referral marketing is the easiest marketing your business can do
For real. Your team barely has to put any effort in, because your customers are basically out there prospecting for you.
Once you set up the framework of your referral marketing program and what you’re willing to offer, all you need to do to make it successful is what you’re already doing: producing the right product and giving your customers exceptional service and support.
Once you’ve got an army of customers who love what you do, they’ll be willing to should your brand’s name from the rooftop! (Or at least refer their friends and colleagues to your business in exchange for a reward, which is just as good).
About the author:
Kimberlee is a B2B/SaaS Content Writer for CandyBar and ReferralCandy who also helps start-ups fuel their growth through quality, evergreen content. Her workshop is located at kimberleemeier.com.