Referral marketing is the holy grail in B2B sales. In fact, there’s no more reliable way to grow any business than through referrals—but only if it’s done in a strategic manner. Unfortunately, many marketers overlook this opportunity to fill the prospect pipeline.
Why embrace referral marketing?
There are many reasons referral marketing should be a part of your strategic marketing plan. Research shows that 84 percent of B2B buyers start the purchasing process with a referral, and peer recommendations influence more than 90 percent of all B2B buying decisions. It’s also easier to close deals with referrals. Referred leads have a 30 percent higher conversion rate than contacts acquired by other marketing means. Meanwhile, referral customers help boost the bottom line. Buyers referred by a friend or other customers have a 16-percent higher lifetime value than non-referred ones. Perhaps most important, referral marketing is cost-effective. According to Colin Bowman, business advisor at Cultivate Advisors, “When I break down the marketing spend on different lead funnels into businesses, referrals are the lowest cost, have the greatest return, and generate the highest conversion rate—and it’s not even close.”
Secrets to successful B2B referral marketing
The benefits are clear. But it will take some work to create a steady flow of referrals. “You’ll have to be in the mindset of giving a lot to get a little,” Bowman says. “But a little isn’t really a little. Would you rather have five hot referral leads from connections who have already sung your praises, or 100 cold leads?” If your answer is five (or more) hot referral leads, here are seven steps to get you started with implementing a strategic referral partner program:
1. Stop calling them “referrals.”
It might sound counterintuitive, but it’s true: Asking for “referrals” isn’t the best way to get more. What you really want is an introduction. So, why not ask for one directly? By cutting out the referral talk and simply asking for introductions, you’ll make a lot more progress in a shorter period of time.
2. Overcome your fear of asking.
If you’re like most people, you are uncomfortable asking for introductions. The only way to get over this fear is to just ask anyway. Think of it this way: You’ll never lose business by asking for an introduction, but you never know how much business you’ll lose by not asking at all. “Most people would give referrals,” says Bowman. “The problem is the vast majority of people just don’t ask.”
3. Phrase it as a request for help.
When you ask for introductions, it’s important to phrase it as a request for help. Why? Because people love to help other people, especially when they already know and like them. Begin your request by saying, “I was wondering if I could get your help with something…” When you do that, you’ll set yourself up for a productive conversation and leave the other person feeling good about helping you out.
4. Leverage your entire network.
Take advantage of your entire network. Don’t limit yourself to just one group when you ask for introductions. Existing clients are a great resource, but they’re far from the only one. Past customers, industry connections, former colleagues, friends, family members, social acquaintances, friends of friends are all fair game. The more people you include in your quest for introductions, the more introductions you’ll get. Bowman suggests making a list of potential referral sources, without filtering. “You don’t know everyone your contacts know, so don’t cut off a potential goldmine of lead opportunities by assuming they don’t have connections,” Bowman says.
5. Get specific about your ideal introduction.
One of the biggest mistakes people make is not being clear about the kind of introductions they want. Far too often, salespeople say, “Who do you know that might be a good fit for our products/services?” This puts the burden on the person helping you. Instead, be specific about what your ideal introduction looks like. Give clear examples about who you’re interested in connecting with. Share information such as specific job titles, the companies they work for, the industry they’re in, average revenue and other important factors. Then, let the person think about who in their network fits the bill for an introduction to you. Better yet, if you are connected on LinkedIn, scroll through their connections, and ask for introductions to specific people.
6. Ask for one introduction per day.
This might sound like a lot of work, but it shouldn’t take more than 15 minutes and it could be the most important 15 minutes of your day. When you ask for one introduction per workday, that’s five each week, and around 250 per year. Imagine how many ideal prospects you could connect with from 250 introduction requests per year.
7. Make it easy.
When asking for introductions, it’s important you’re mindful of how busy your contacts are. Rather than asking and hoping that they find the time to follow through, be more proactive in your approach by eliminating some of the heavy lifting for them. Create a short email template to get the ball rolling and offer it to the person making the introduction.
Exceed expectations
Even if you provide a great customer experience, referrals are not bound to happen naturally. That’s why a strategic effort to cultivate them will result in higher ROI. If you want to get your customers (or other connections) raving about your service, you have to go above and beyond. Do more than simply provide your product or service. Regularly stay in touch, provide content that offers value, share their stories on social media, quote them in your blog and make yourself an indispensable resource. Then, the case will be made for you why they should tell their network about the great work you do. When you invest in these relationships, your company will always be top of mind. To learn more about how to incorporate referral marketing into your strategic plan, schedule a quick call with one of our marketing experts.
