When most people think of referral or affiliate marketing, they tend to think of previous customers referring other like-minded individuals back to the business. While indeed referrals work amazingly well for B2C, does it also work for business-to-business sales?
According to a 2016 B2B Buyer’s Survey Report, 80% of respondents said their company “spent more time researching purchases, and 73% said they use more sources to research and evaluate purchases.” And a lot of the sources they’re using? Online reviews and peer recommendations.
In fact, 62% said they rely more on peer recommendations than ever before. And take a look at the top 3 resources business buyers checked out first:
In another report by Amplifinity, “The State of Business Customer Referral Program,” the numbers were even more drastic. Here, they cite that 3 out of 4 B2B buyers engage peers on buying decisions, and 80% of buying decisions rely on direct experience or peer influence.
The benefits also go beyond the initial sales. According to research by Influitive and Heinz Marketing, not only do 86% of companies with B2B referral programs see growth (compared to only 75% without these programs), but get this: referred customers have a higher lifetime value. This means B2B referrals are not just important, but preferred.
Implementing a B2B Referral Program
Surprisingly the research above shows that only about 30% of surveyed B2B companies have a referral program in place. So if you want an edge over your competition, it’s time your business started one up. But where to begin?
Let’s take a look at an example of a B2B referral program that many businesses have already taken advantage of: the G Suit Referral Program, from Google.
Almost every SMB uses Google’s suite of apps to run their business, and Google welcomes anyone to be part of their referral program. Once you sign up through the form, you’ll receive an email with the details of the program as well as coupon codes that your referrals will use to sign up through you.
So from this example, here are some things to keep in mind:
- Utilizing a lead form is good practice. Not only is it a simple way to sign up a referral partner, it’s easy to share or embed somewhere (like an email).
- Have a good incentive. Money talks, and while you might not have Google money, a generous incentive is key to a good referral program. Keep in mind, the ROI is high on referrals, so it’s ok to go higher than you’d initially think. That being said, test out incentives and see what makes sense for your company.
- Make it easy to refer businesses. Coupon codes and personalized links are great ways to make this process a no-brainer for your partners. The simpler it is, the more mileage you’ll get.
Once you implement your program, here are some other tips to keep in mind for B2B specific referrals:
- B2B often has a longer sales cycle than B2C. Because of this, leads may be nearly as valuable to you as actual sales. It’s not uncommon for B2B to pay a commission on leads as well (albeit much less than the commission for a conversion, of course).
- If your B2B referral sends you leads, it’s good practice to have them send the lead to a lead form so you can capture as much customer information as possible. This will make it easier to market to the potential customer.
- Be sure to leverage your agency partners as your affiliates. Especially for SaaS companies (like us!), agencies are the gatekeepers to merchants (ie. other businesses you want as customers). By investing in the relationship you have with your agency partners literally — by providing a commission for referring sales to you — they’ll help refer your business to their other clients.
And remember, it’s all about relationships. So be sure to treat a referred business well, or the partner that referred it won’t be likely to do it again, no matter how high the commission you pay out.