In today’s digital world, people are being exposed to thousands of adverts daily, which, in turn, has led to a phenomenon known as ad fatigue, where people, consciously or unconsciously, are starting to ignore ads, altogether. Many have even gone as far as installing ad blockers on their phones and computers.
As such, people are turning more and more to peer reviews, testimonials, recommendations, referrals, and other forms of social proof. No marketer today can downplay the importance of word-of-mouth advertising, where satisfied customers become active ambassadors of a brand and its products.
What Is Referral Marketing?
Similar to word-of-mouth advertising, referral marketing aims to generate new customers by making use of recommendations from existing customers. The main difference between the two, however, is that word-of-mouth is usually self-directed by the consumer while referral marketing is initiated and often incentivized by the brand.
At its core, referral marketing revolves around the good relationships companies have with their customers. It can be something as simple as asking for referrals on websites such as g2.com or clutch.co, social media, or something more complex like implementing an employee advocacy program or ingraining customer referrals as part of the company culture.
B2B Referral Marketing
Referrals are seeing a significant boost in B2B marketing as well. A B2B referral marketing strategy is a formalized process where your happiest customers will recommend your product or service to their peers by asking your sales team to reach out to their contact.
Sending out the occasional email or calling customers for referrals doesn’t constitute as an effective strategy. Instead, marketers should look to create an ongoing and seamless referral experience for your customers, which can result in a new stream of high-quality leads.
It’s important to note that a whopping 65% of new business opportunities comes from referrals. That’s because 83% of satisfied customers are willing to refer your company to their peers, while 92% of people trust referrals from people they know. What’s more, people are four times as likely to buy when referred by a friend, while a new referral customer has a 16% higher lifetime value.
So, what are the basics of setting up a B2B referral marketing strategy?
The first step toward an effective referral marketing strategy is to research your typical customer’s buying habits and their expectations from such a referral program. You can conduct your research in several ways, such as online surveys, social media, short phone interviews, etc. In a sense, it will be your customers who will dictate what your strategy will look like, and you must aim to turn their expectations into a reality.
Sales and Marketing Alignment
Another important aspect is to have your sales and marketing teams in alignment. By integrating the referral program into your CRM system, you will help ease its adoption by the two departments and will make tracking much easier. Similarly, you can use customer advocacy software such as Influitive to align your teams further and better manage the process. Its features will allow you to generate more referral leads, customer references, success stories, product reviews, and social buzz, all being crucial to reaching new customers.
Providing full transparency of your referral campaign is crucial for its success. You will need to build trust before customers will be willing to share their contact information with you. As such, you should clearly explain to them how the information they provide will be used, who will be reaching out to the referral, and when will it happen.
In addition, you should also explain how your referral process works and when they can expect to receive updates on the status of their referrals. By clearly defining the entire referral program and feedback loop, you will put your advocates at ease and will encourage them to do so again in the future.
Provide A Seamless Experience
You shouldn’t expect your customers to have to jump through hoops to refer you to their peers. Instead, you should make the experience as seamless and as enjoyable as possible. You should refrain from using an informal email channel or overcomplicated forms. It’s far better to have a simple page on your website where your advocates can submit names to your referral program.
It’s also a good idea to let your customers know what type of prospects you are interested in by providing the buyer’s persona or types of companies you are looking to find. You can even take it a step further and go through their social networks, asking them for a specific introduction.
If you want to learn more about how to implement a B2B referral marketing strategy in your business, feel free to contact us directly or subscribe to our newsletter.