Referral marketing is the holy grail when it comes to B2B sales. If you’re lucky enough to get a steady stream of recommendations coming your way, then your results are going to skyrocket.
Generating leads through word of mouth is basically about having customers, past and present, along with fans and ambassadors of the brand, out there spreading your message for you. Even if the only marketing you achieve is referral marketing, you’ll be in a great position, it is the best and cheapest marketing.
The reason it works is simple - if you respect someone and their opinion, especially if you know they’re a person with high standards who is very hard to please, then a recommendation from them will carry a lot of weight. It’s something you’re likely to trust.
If you have a need and are served up a tried-and-tested solution, then you’re highly likely to check out the company mentioned. Not only that but you’ll approach them with more confidence than you would if it were simply a name you came across on Google.
Which is why referral marketing can be so powerful and valuable for any B2B company. It can cut out a lot of the sales and marketing steps generally needed to bag a new customer.
And, if you can solve a prospect’s problem, then any lead coming to you via a referral is simply yours for the taking.
Why prospects love recommendations
For a prospect, getting a referral also has many advantages. It takes the hard work out of finding and vetting potential suppliers and provides them with a genuine account of what a product and its delivery has been like.
But the top benefit is that it reduces the risk of the unknown and that’s important, as everyone wants to make the right decision.
The higher the price tag, the higher the risk and the harder a decision will be to make. This is especially true when it’s something that is hugely disruptive, both to integrate and then remove, if it did end up being the wrong choice.
For example, imagine you were going to invest in a new top of the range CRM. You’d need to make a substantial initial outlay, then implement training for multiple team members, manage the process of migrating all existing data into the new system and deal with any potential downtime while that happens…the list goes on.
If the system turns out to be a poor fit, causes constant problems, or simply doesn’t do what you need it to, then it may need to be replaced. That could cause a major headache for all involved, both financially and technically.
Where are your leads coming from?
Another important point to mention here is that you should already have some sort of system in place so you can monitor where your leads are coming from. Otherwise, you won’t know what’s working and what’s not, what you should be doing more of and what may need reviewing and improving.
For example, software like Lead Forensics can help you track your leads, so you can see the exact route a prospect has taken to find you, what pages they’ve looked at on your website, when and for how long. All valuable data that you can use to attribute ROI to your different activities and that will help you improve the effectiveness of what you’re doing. Check out our free guide below for some tips on how to start building your lead database.
Always make sure you know how a lead came to you and if it was via a referral, then make sure you ask who recommended you and keep a note of it, so you can thank the person and show your appreciation.
The secret ingredients of successful B2B referral marketing
So, how do you encourage referral marketing and what’s it going to take to put a successful referral marketing strategy in place?
The key elements you need are:
- Provide a great customer experience
- Have an outstanding product or service
- Keep in regular contact with customers
- Nurture brand ambassadors and influencers
- Ask for referrals and spell out how they can be given
- Make the whole referral process super easy
- Show you appreciate anyone who recommends you
- Ensure you live up to expectations and are deserving of the recommendation
- Regularly analyze, review and improve the process to improve on it
Have a strong product and business
Let’s face it, you’re never going to get referrals if what you’re offering is rubbish – both from the point of view of the product, how it is delivered and what it’s like to work with you as a company.
You’ve got to earn a referral and the best way to encourage them is to be outstanding at what you do. There’s no quick fix or corner cutting here, it’s about taking a completely customer-centric view and there are lots of different elements to think about.
Never underestimate the importance of your staff in this process. Invest in their training and engagement with the business, as happy employees will lead to happy customers, which is the main ingredient of referral marketing.
There’s a famous quote from entrepreneur Sir Richard Branson: “If you look after your staff, they'll look after your customers. It's that simple.”
Things will always go wrong at some point, even for the most diligent and well prepared company, but it’s how you deal with issues that counts the most. Have a well thought through process for gathering and sharing customer feedback, managing any complaints and acting on any comments.
Build on your relationship with existing customers
Staying in touch with current customers is key to getting referrals. Aim to market to them at least once a month, with something high quality and highly targeted.
Never be afraid to just pick up the phone and check in. Avoid going in with any agenda other than to touch base and make sure it’s all going smoothly and to see whether there are any other ways you can support them.
It’s important to be genuine and to try to get to know your customers really well. The personal touch can be very powerful. What you’re aiming to become is a trusted partner, not just a supplier. This will lead to far greater customer loyalty and ultimately longer and stronger lifetime customer values. You need to invest in your customer relationships if you’re to grow business from them.
Think outside the box – how about hosting a few customer events throughout the year, such as a summer barbecue with good networking opportunities and even a guest speaker. It’s an easy way to get face-to-face with customers within a less formal setting, while adding even more value to your working relationship.
Make it easy to refer you
The easier you can make the process of referring you, the more likely it is to happen. Yes, some customers will just put your name out there organically, for example when a friend or colleague is asking for recommendations, or mentions a specific problem to them. But have other clear routes available too.
The important point is that you explain how people can do so. For example, in B2C it’s now common to give customers the option to instantly share that they’ve made a purchase on Facebook. They don’t need to do anything, other than click on the button.
Ask for referrals
Never be afraid to ask for referrals. While some will naturally just happen, you will secure far more if you prompt customers.
Of course, to do this, you need to be completely confident that you have exceeded their expectations. Even the busiest customer won’t shy away from recommending you, if you’ve made a great impression. Have you gone the extra mile? Have you really stood out? Then customers will want to help you in return.
Don’t be afraid to get creative in your message. Taking a fun or humorous approach can work wonders. Just keep it short, simple and unobtrusive.
Write out the referral by pointing out the before and after scenario and the clear benefit the customers received by working with you. You will know best and can prepare this properly. Send it to your client and ask for adjustments. In most cases, they will thank you for having written it already (so they don't have to invest more time) and give the green light.
Another way to encourage referrals is to offer an incentive of some sort. Reward customers who go on to generate more sales for you.
This type of structure can also be useful when it comes to aiding recruitment. Offering a finder’s fee for those employees who help you fill vacant positions can again bring great results. Applying for a job is in many ways a similar process to that of choosing which product to buy. A referral from someone who can tell them how it really is can be very powerful.
Remember a thank you goes a long way
Always reward the referrer, not just through incentives but by making sure they know how much you really value them and that they took the time to recommend you. Send them a card or some other surprise. This will again set you apart from the rest and certainly help keep you front of mind when there is another opportunity to recommend you.
As well as saying thank you, also let them know what the result of the referral was, as they will appreciate this.
Finally, see how you may be able to help them too. Is there anyone in your network they’d like to be introduced to? Or any other way you can offer them added value?
Follow up on any referrals you are given, even if they don’t at first appear to be a good fit for your product or service. Don’t see it as a waste of time, see it as an opportunity to create yet more brand ambassadors.
You want to encourage recommendations, not leave a bitter taste in the mouth of any customers who take the time to try and support your business.
How you handle a referral could have implications. Don’t risk undoing all your hard work just for the sake of a phone call. Plus, you never know what may change in the future, or where someone may move on to with their next career step.
Make sure you deliver
And of course, the final part of the process is to ensure you live up to expectations. Nothing will be more embarrassing for an existing customer or brand ambassador than recommending you, only to have you let them down.
Be the best and make them proud.
Other routes to drive referral marketing
There are other types of referral marketing that could benefit your business, so don’t forget to embrace these options too:
- Reviews and testimonials
While a direct recommendation will always be the ultimate weapon in your marketing armoury, don’t forget to work on building up a bank of reviews and testimonials too.
And use them! Think how you are currently using your testimonials. Are they just hidden away on the website, or in a document you only pull out for pitches? Think how else you could use them. There are some great tips and examples in this article by HelpScout.
- Online influencers
Think who the key influencers are within your network and how they may be able to help you get in front of your target audience. For example, bloggers, vloggers, news and review websites, social media influencers and thought leaders.
- Content marketing
Use your content to get seen in all the right places. If you know having an article appear on an influential blog will boost your credentials, then consider offering them a guest blog, or even paying for a sponsored post. Just remember, any content you provide must fit the existing style of the site and anything salesy will be a huge no-no. Concentrate on offering quality content that is highly targeted to the audience and which will inform, educate or entertain.
Other options for using content to drive referrals includes running a joint campaign with someone who it will be helpful to be associated with, or offering syndicated content.