30 Dec Why No B2B Marketer Can Afford to Ignore Referral Marketing
Widely considered one of B2C’s most effective lead generation techniques, referral marketing might be on its way to becoming just as effective among enterprise companies.
A lot has been written and said about the incredible success Uber, Airbnb, and other B2C brands have achieved through referral marketing. And several studies have highlighted the impact referral programs can have on sales pipelines and revenue acceleration. But most, consider referral marketing a consumer-focused strategy. But can referral marketing be an effective tool for B2B companies? That’s the million dollar question.
Data provided by several B2B referral marketing studies indicate that referral marketing can work for B2B just as well – if not better – than it does for B2C.
- 86% of B2B companies with a structured referral program in place experience more revenue growth and 71% report higher conversion rates. (Influitive and Heinz Marketing)
- Only 30% of B2B companies have some sort of formal referral program in place (Influitive & Heinz Marketing).
- B2B companies’ average revenue from referral programs was more than 3X higher than eCommerce companies and 1.5x higher than financial services companies. (‘Referral Marketing by the Numbers: B2B Software and Services’, Ambassador)
Influence and Peer Reviews Gaining Ground in the B2B World
Other studies indicate that B2B referrals are not just effective, but are generally preferred over leads from other sources. According to DemandGen’s 2016 B2B Buyer’s Survey Report:
- 80% of respondents said their company spent more time researching purchases.
- 73% said they use more sources (online reviews and peer recommendations) to research and evaluate purchases.
- 62% said they rely more on peer recommendations than ever before.
- Almost half (49%) listed their peers and colleagues as a top source of information, up significantly from 20% in 2015. It ranked third behind web search and vendor websites.
- At the point of evaluating solution providers, 55% of buyers said reviews were a “very important” consideration.
In another report, ‘The State of Business Customer Referral Program by Amplifinity’:
- 3 out of 4 B2B buyers engage peers on buying decisions.
80% of buying decisions rely on direct experience or peer influence.
It should come as no surprise that more buyers are turning to trusted sources for advice when choosing between vendors given the sheer amount of research done and the length of today’s purchase process. From social media to review sites, long a staple of consumer marketing, B2B buyers have more options than ever when it comes to finding feedback from their peers.
The Bottom Line
In today’s day and age, where more are skeptical of marketing claims than ever before, the statements made by outside third parties (customers, reviewers, expert consultants, etc.) about your company tend to carry more weight with prospects than anything you might say about yourself. That’s why referral marketing merits consideration as part of any B2B company’s marketing strategy.