Trust is one of the most important factors in any relationship – especially business-to-business relationships where thousands or perhaps even millions of dollars might be at stake. This is why referral marketing programs can be so effective.
Social media’s role in referral marketing
B2B customers tend to be very informed about the products and services they use – more so than in their lives as consumers. After all, their jobs are on the line. As a result, reputation and word-of-mouth hold significant weight. And both are easily nurtured and spread through social media channels. These channels can help build a company’s profile, position you as a leader in your respective market, and encourage others to weigh in and become your advocates.
According to HubSpot, 44.6% of B2B companies say they acquired customer leads via LinkedIn, 35.1% through Facebook, and 31.6% via Twitter. Social Media Examiner’s 2012 Social Media Marketing Report pegged the number of business partnerships forged by B2B marketers via social media at an even higher 56%.
A study by The Aberdeen Group entitled “B2B Social Meeting Marketing: Are We There Yet” suggests that close to two-thirds (65%) of top B2B companies (based on factors like revenue, growth, and customer retention) integrated social media into their traditional acquisition channels compared to 51% of “average” performing companies. And 17% of best-in-class companies generated 17% of their leads via social media. Those are impressive numbers.
6 stellar examples of referral marketing
Google: Did you know that Google has its own referral marketing program, paying business customers $15 for each new user that signs up for Google Apps for Business?
Dropbox: This online storage/file transfer service is a handy tool for businesses (and consumers). After launching a program to offer an extra 16 GB of free storage space to users who referred someone new, the company saw its membership skyrocket by about 60%.
ReadyTalk: In the first 10 weeks after implementing an advocate marketing program, ReadyTalk, an audio and web conferencing service provider, received 183 referrals. Five became qualified opportunities, and two closed. That’s faster results than many other sales acquisition methods. Learn more in this case study.
Evernote: The note-taking and archiving software sends e-mails to users with details about similar businesses that are using the service, complete with a link to the full video case study. The service now has over 100 million users, 13 million of which were referred by other users. It has more than 14,000 business customers.
FreeAgent: This simple accounting software for small businesses has excelled with its referral program, which offers both new users and the referring customer a 10% discount. There’s even a dedicated page on the accounts screen for bringing in referrals, illustrating just how valuable the program can be for both the company and its B2B clients.
Influitive: Yep, we’re on this list, too. Almost a third (32%) of Influitive’s own customer base came from referrals through our advocate marketing program, Influitive VIP.
The numbers don’t lie
Companies are recognizing the impact referral marketing can have on their businesses. In a recent Gigaom Research survey of 300 U.S. digital marketers:
- 43% said they already use referral marketing as part of their strategies
- They report having acquired 35% of new customers as a result
- 31% find referral marketing most effective for acquisition and conversion
- 26% find it most effective at retention – that’s even higher than often buzzed-about digital marketing methods like search engine optimization (SEO; 13%), digital video (7%), and paid search (4%).
And let’s not forget the important ripple effect to referral marketing that makes it particularly powerful. According to the Journal of Marketing, referred customers have 16% higher customer lifetime value – revenue you’re leaving on the table if you don’t have a formal referral marketing program in place.
When they’re fun, easy, and rewarding, referral marketing programs can be a powerful source of new business, and an integral part of a digital marketing strategy.
Start here: Your recipe for referral marketing success
The No Fuss Recipe for Hot Referral Leads features valuable insight from five sales and marketing leaders who share their “secret ingredients” for a successful referral marketing program.
Download the recipe book to get your revenue cooking with the ultimate referral marketing program!