What’s the best way to boost sales and acquire new customers?
Marketing-led referral programs that are supported by relevant technology, says a new study (PDF). In fact, 84 percent of B2B decision makers start the buying process with a referral.
Heinz Marketing surveyed 600 B2B professionals from across North America to understand the impact of formal referral programs on sales pipeline growth and revenue acceleration. It found that “referrals convert better, close faster and have a higher lifetime value than other types of leads.”
The study reveals a number of useful insights about B2B referral programs.
It has found that the most successful organizations:
- Have a formal referral program in place.
- Have referral programs managed primarily by marketing.
- Use tools or software specifically for referrals.
It also reveals that:
- 71 percent of companies with referral programs report higher conversion rates.
- B2B companies are three-times more likely to reach their revenue targets when the marketing department has primary responsibility for a formalized referral program, or when referral tools or software are used.
- Formal referral programs help B2B companies generate two-times more high-quality referrals.
Fewer Companies Have a Formalized Referral Program in Place
Despite realizing the many benefits of a marketing-led referral program in boosting sales and marketing, only 30 percent of the surveyed B2B companies said they have a formalized referral program in place.
This is surprising because referral programs are not just nice to have; they are a key contributor to revenue growth. As the study finds, 86 percent of companies with formalized referral programs experienced revenue growth over the last two years, compared to only 75 percent without them.
Matt Heinz, President of Heinz Marketing Inc. says, “The findings of our research are clear: if you want to accelerate revenue growth, a referral program must be a key part of your strategy, marketing must own that program, and you should leverage technology to create a better referral process.”
Winning Big With Referral Programs
If you need a compelling reason to consider having a formalized referral program in place, consider this: 84 percent of B2B businesses start the buying process with a referral, according to Edelman Trust Barometer.
It goes without saying that engaging customers and giving them the incentive to refer your business can go a long way in strengthening your sales and marketing efforts.
Jim Williams, marketing vice president at Influitive, a company that also participated in the study, says, “The responsibility for generating referrals can’t rest solely on the shoulders of front-line sales reps. Simply asking individual prospects and clients for one-off referrals won’t get you to your revenue goals.”
He adds, “Instead, sales leaders must turn to their counterparts in marketing, who have the budget, creativity and technology to generate referral business at scale.”