Does Referral Marketing Work for B2B?

Most people associate affiliate marketing and referral marketing with past clients sending other like-minded people back to the company. While recommendations do in fact work incredibly effectively for business-to-business sales, how about business-to-business sales?

In a 2016 B2B Buyer's Survey Report, 80% of participants stated that their business “used more sources to research and evaluate purchases, and spent more time researching purchases.” And many of the resources they employ? Peer referrals and internet reviews.

In fact, 62% of respondents claimed to now rely more than ever on recommendations from peers. Here are the top 3 resources that business buyers looked at initially:

The figures were even more striking in an additional Amplifinity analysis titled "The State of Business Customer Referral Program." They state that 80% of purchasing decisions are influenced by peers or firsthand experience, and that 3 out of 4 B2B buyers consult with peers while making decisions.

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.

Make careful to use your agency partners as affiliates. Agencies are the gatekeepers to merchants, or other organizations you would like to be customers of, especially for SaaS companies like us. Your agency partners will assist in introducing your company to their other clients if you literally invest in your relationship with them by paying them a commission for suggesting sales to you.

Keep in mind that relationships are everything. No matter how much commission you pay out, if you don't treat a referred business correctly, the partner who referred it is unlikely to do so again.