You know asking for referrals can help you generate more leads and make more sales—but did you realize just how much they help?
A recent study polled B2B companies to learn what effect developing and using formal referral programs has on their lead generation and sales efforts. Here’s what they found:
- Just one-third (35 percent) of companies without referral programs say their sales efforts are “highly effective”—compared to more than half of those that do have referral programs.
- 51 percent of those with referral programs say their companies are “highly effective” at maintaining a full sales pipeline—compared to just 32 percent of companies without referral systems in place.
Survey respondents aren’t just overestimating or imagining those results, either. Among companies that have formalized referral programs, 59 percent say they get higher lifetime value from customers and 69 percent report that they close sales faster compared to companies without referral systems. In addition, more than 70 percent of companies with referral programs say they are on track to meet or exceed their revenue goals.
Despite all the benefits that referral programs offer, less than one-third of B2B organizations surveyed have a formal referral program in place. That means simply by implementing such a program, you’ll have an edge on most of your competition.
What makes for a successful referral program? The survey report offers these tips:
- Use a variety of marketing channels to generate referrals, including email, social media and your website.
- Encourage your customers to generate content that can help attract referrals—for instance, by posting on social media or recommending your business on LinkedIn.
- Bring your customers and prospects together at events where they can interact and network, and encourage them to invite colleagues, too. By fostering business connections, you’ll make customers more likely to help you connect via referrals.
- Don’t be afraid to spell it out. Customers can’t guess what you want, so if you know a customer has a contact you want to target, ask for a referral to that person.
- Create referral systems for your marketing and sales teams. Use tools such as CRM software to keep track of progress, simplify the handoff of leads to the sales team, and measure the success of your referral program.
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Maria Valdez Haubrich
Maria Valdez Haubrich is Chief Liaison Officer of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her company’s blog at SmallBizDaily.com.