Why B2B Referral Marketing is so Powerful.

A few stats before going on to the blog that depicts the impact of B2B referral marketing in today's business world.

• Referral leads convert 30% better than leads generated from other marketing channels and have a 16% higher lifetime value?
• 71% of B2B's report higher conversion rates from referrals than other customers.
• 69% of companies with referral programs say that referrals take less time to close than other leads.
• “84% of B2B decision-makers start the buying process with a referral.” Influitive
• Referrals are 4 times more likely to make a purchase. DCR Strategies
• Referred customers have a 16% higher lifetime value. DCR Strategies
• 86% of B2B businesses with referral programs grew their revenue in the past 2 years, compared to 75% of B2B businesses without referral programs. Influitive

Cultivating your B2B marketing strategy is an ongoing task as the world of marketing continues to evolve and stretch into new dimensions. The importance of referral marketing cannot be stressed enough, and this can be done in several ways that cost your business very little money. Referral marketing is all about using your best resources – your customers, clients, friends, family, and employees – to help you spread the word about your products and services. This can be done through online referral marketing, offering client referral programs, employee referral programs, and of course, through social media marketing and many other tactics.

So, the point 'Why B2B referral Marketing is so Powerful.' can be explained with the help of the following points.

1. Customers trust referrals.

People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral is the holy grail of advertising – Mark Zuckerberg

Perhaps the most compelling benefit of referral marketing is that customers trust referrals. Recent consumer polls indicate that recommendations and reviews are trusted more than conventional advertisements. Meanwhile, people are four times more likely to buy when referred by a friend.

2. Referred customers are more loyal and valuable.

Referred customers already have a positive opinion of your company because they’ve been referred by a person who's close to them. Customers that have been referred by a friend, family member or colleague have a lifetime value that is, on average, 25% higher than that of other customers.

3. Improved customer retention rate.

Customers who participate in referral programs are much more likely to stay with your company. Because engaging new consumers is generally more expensive than retaining your current customers, this is often among the top benefits of referral marketing.

4. Increased ROI.

The customer acquisition cost is one of the biggest fears every company has.

Discounts and gifts to attract customers will always have a specific cost to your company, Referral marketing is a cost-effective way to advertise when compared to other modes such as traditional online ads. You can save even more by streamlining your referral marketing system rewards into your general loyalty rewards program, which will allow you to award points rather than an immediate gift or discount per referral.

Convincing a potential customer through different advertising channels can be up to 5 times more costly than retaining an existing customer or getting customers by referrals.

5. Increased Marketing reach.

Referral marketing allows you to increase your outreach by using your customers as your company’s advocates. While there are venues and occasions that are simply off-limits to traditional advertisements, there are virtually no limits to your customer telling a friend or coworker about a good product or company. Because many people have a diverse circle of friends, customer referrals will also allow you to expand your client base.

6. Referral marketing programs are easy to set up and run.

Referral marketing can be made extremely simple. There are many options available and are really simple. You can decide to go with an automated referral program - first, you decide the referral rewards for the advocate and referred friend, product discounts or cash being the most popular options. Next, you can choose what advocates should do to earn their rewards, whether be it after every purchase or after every five. Once these parameters are set the referral program will pretty much run on its own!

The other simple option is to ask customers to share the name of the person who referred them to you and plan a prize or a gift according to the set standards and purchase.

7. Increased Brand Awareness at 'No Cost'.

Referral marketing can help customers get to know your brand story and improve your overall reputation. Many modern consumers want to align themselves with brands that have a strong voice and a positive influence. 85% of consumers agree that they prefer a more authentic, honest brand. Allowing your own customers to tell your story makes that story through referrals resonate more strongly in the general consumer market.  

8. Collection of Valuable data.

The modern consumer loves a personalized experience. By tracking consumer referrals and engagement, you can give your customers the benefit of personalization. This also gives you a good idea of general market trends that can help your brand become better at meeting customer needs.

9. Increased engagement.

Increasing engagement strengthens your online presence and increases the chances of potential revenue. A customer who refers a friend is likely to visit your website more frequently to either claim rewards or even just discuss a product with others. The more often a customer returns to your site, the more items they tend to purchase.

10. Social media boost.

Today Social media has become an incredibly important advertising tool in reaching the newest generations of consumers. Because most referral marketing platforms also allow customers to refer friends via their favorite social media site, your brand will get an additional boost in social media presence. By incentivizing referrals in a referral program, your advocates will actively promote on their networks on their own so they can benefit from the referral program.

Conclusion...

Referral marketing is known to be one of the best and most trusted marketing approaches applied by both small and large businesses globally.

Referrals tend to generate a higher quality of leads when compared to traditional marketing methods, and once a referral becomes a customer, they are more likely to stick with the company. If you don’t have a referral marketing program, you’re missing out on the advantage over your competitors.

Companies now are quickly recognizing the impact referral marketing programs can have on their business. So if your business doesn’t currently have a referral program in place, it’s time to build one ASAP.

Thank you.