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In this blog, we will learn about what b2b referral program is, its benefits along with examples. Let’s dive in.
We already know that referral programs can be effective in the B2C world. But what does this look like in the B2B industry?
Referral marketing is one of the marketing tactics used for promoting products or services to new customers through referrals, usual word of mouth.
The most successful referral marketing campaigns are built on trust and advocates sharing their stories with others in their network. B2B is no different; it's just a bit more formalized.
Purchasing decisions in the B2B arena are based on more than just hasty judgment. Since they represent a more significant investment in time and money, decision-makers take longer to make their decisions – sometimes months or years after the first contact.
This ultimate guide will discuss the key fundamentals and benefits of referral marketing. We have also mentioned top examples of referral marketing. Let's dive in.
Five benefits of b2b referral programs
Increased brand awareness
Referral marketing is a powerful way to promote your brand to B2B audiences. However, these efforts must increase brand awareness instead of pushing already interested parties to buy. The more people that talk about it or share information about you ultimately leads to more conversions, so ensure the message is positive and focused on areas of untapped potential.
Building brand awareness has many benefits, but here are the most important ones:
- Increase trust with your customer base
- Builds brand equity
- Grows market share
- Makes it easier to scale up
- Collect audience data for future marketing
Increased conversion rates
Referral marketing is the best way to foster relationships, spread word-of-mouth, and enrich your customer's experience. Generating referrals is more than just asking for a recommendation. User-generated content (UGC) in the form of referral drives traffic from your brand advocates' networks, and studies show that referral marketing improves conversion rates by up to 70%.
Referral marketing has by far the highest acquisition rate of any channel. Some of the enormous scale high adoption rate products grew through word-of-mouth marketing. Do the names Gmail, Dropbox, or Tesla ring a bell?
Increased customer lifetime value
Customer lifetime value is the sum of all net revenue generated from a customer.
Referral programs can improve LTV by strengthening engagement with the platform, product, or brand. Being backed by a person's reputation and thus social proof makes referral marketing techniques exceedingly powerful for promoting a business online.
Building virality through word-of-mouth has become attractive to growing your customer base among startups. Referral marketing is a popular method used by businesses like Morning Brew, which has over 2 million newsletter subscribers and attributes over 30% to referral marketing.
Lower customer acquisition costs
Customer Acquisition Cost (CAC) is the cost of gaining a new customer. Acquiring new customers can be expensive. But, of course, this cost varies depending on the media you use to reach them. Referral marketing is a high-value, low-cost way to expand your customer base by getting current customers to promote your business.
Referral leads and signups are much more likely to convert to paying users than non-referred.
Lower your churn rate
Churn rate, the percentage of customers leaving service or company over time, can be balanced by implementing a referral program for your SaaS business. In addition, referral programs used as lead generation tools increase customer acquisition. Not only does this soften the blow-off climbing churn rates, but referrals have also been shown to strengthen the connection between the brand and its existing customers.
Referred customers have a 37% higher retention rate than non-referred customers, which means you can lower your churn rate while generating new high-quality leads.
B2b referral program examples
Rewards can come in many shapes and sizes, based on the needs of each programming example; B2 B referral companies offer bonuses for referring new customers, from complimentary products to cashback incentives. When choosing what tip will work best for your company, keep in mind the incentive needs to improve the customer's life or provide a financial advantage.
Fintech company Bench Accounting uses proprietary software to automate bookkeeping and provide financial data to small business owners.
As the slogan states: "You run your business; we'll do your bookkeeping."
Bench offers its B2B audience freedom from some financial stresses of running a small business.
Bench offers a free month of accounting (claiming a $500 value) to friends of existing customers. Because the brand is seen as having a peer's stamp of approval, referral prospects are willing to put their books in the hands of Bench.
Choosing the Right Rewards is Key to B2B Referrals
Offer rewards that align with the values of your audience. To generate more leads, you're going to offer rewards that your audience will be interested in, which means you'll have to get to know them.
The Bench hit the mark and did its homework on its customers.
Small business owners are the focus demographic for Bench; this group of people reports the same pain points, cash flow, time, and management. Therefore, the Bench was designed to solve these existing issues.
So how does offering a gift card and a free month of services persuade clients to send their friends?
Simple: For a small (maybe new) business owner who is cash strapped, the convenience and flexibility of this reward will provide instant gratification.
Gift cards can also be better than cash rebates because they feel more like a reward than a payout for providing their service provider with a referral or so-to-speak service.
AirTable offers a real-time view of your business that can be easily shared. AirTable is an all-in-one solution that provides the infrastructure for teams to collaborate more efficiently, start to finish.
Referrals play a significant role in B2B marketing. For Airtable, when you refer your friend to join the program, they get 100 credits for their new account to get started immediately. If you engage in referral marketing for upgrades, you will get an extra 25 credits every time they upgrade. This is a proven way to amass credit points over time without any effort.
SurveyMonkey is a SaaS company that makes it easy to survey respondents, analyze responses and then report on the results. In addition, they use referral software to run a fully automated referral program for their B2B enterprise customers.
For those of you who don't know what referral marketing looks like in B2B, there is a dedicated signup page that can be found on SurveyMonkey's Apply site.
SurveyMonkey offers a $500 referral reward for every organization that signs up.
DigitalOcean is a cloud computing service provider that helps businesses with their IT needs and operates as an all-in-one workforce management tool. In addition, the digital ocean offers a double-sided reward to entice new interest.
Refer a friend and get a $25 credit with DigitalOcean when the person you referred purchases services for $25 or more; you then receive $100 and an additional 60-day credit when they add a payment method to their account.
DigitalOcean has a dedicated page on its website for the referral program, making it easy for anyone to start claiming their rewards:
This is DigitalOcean's how-it-works section that explains their referral program:
Now copy your link, or share it via Twitter:
When the referred person clicks the referral link, they are redirected to this page:
Hotjar is a behavior analytics platform created to understand the behavior of the users on your website, what they need, and how they feel.
Hotjar's referral program offers a free Lifetime Hotjar business account to the top referrer. In addition, the top 5 runner-ups each get a free Hotjar Hoodie, and those who refer five valid friends get an official Hotjar T-shirt.
Referral marketing is a powerful, cost-effective business strategy that allows you to tap into people already invested in your product. Launching your referral program is a worry-free solution if you want to generate signups, increase conversions, and limit churn rates without breaking a sweat.
Referral marketing is a crucial way to grow your business. Not only does it help you acquire new customers, but it can also be used as a retention tactic.
There is no excuse not to have created one already if you want to increase revenue in your B2B business with minimal maintenance. You're not growing your business through customer referrals because you haven't launched your first campaign yet.
- Referrals provide quick and easy entry to your product or service.
- Referral programs work well to increase conversions and cut down on customer churn.
- Referral marketing increases customer lifetime value by encouraging engagement and loyalty to your brand.
- One of the most effective ways to market your business is by setting up a referral marketing campaign.
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