Referral marketing is a powerful tool for increasing B2C customer bases, but can the same be said for B2B referral programs? After all, B2B businesses operate differently than B2C. Before deciding whether to purchase a B2B product, businesses usually go through a long decision-making process and consult multiple stakeholders.
And they’re usually seeking a long-term deal — one that lasts for at least a few years. That’s drastically different from B2C buying, where one consumer quickly makes a short-term decision.
So, will a referral program for your B2B really work?
How effective is B2B referral marketing, compared to other marketing methods?
According to Small Biz Trends, almost 83% of B2B decision makers would prefer B2B marketing efforts to be more creative, in line with the creativity shown in B2C marketing.
Interestingly, though, 48% of B2B buyers are bored with most of the B2B ads they see right now and think that these marketing efforts are overly repetitive. Meanwhile, the other 52% think that B2B and B2C ads are equally interesting.
Taken together, these stats show that many B2B buyers are indifferent to ads and are tuning them out. Like most buyers (of both B2B and B2C products and services), they trust recommendations from peers far more than traditional ads.
- 91% of B2B purchasers’ buying decisions are influenced by word-of-mouth. Useful Social Media
- According to 61% of IT buyers, recommendations from colleagues are the most important factor that sways purchasing decisions. Capterra
- 88% of B2B decision makers rely on word-of-mouth (online and offline) for “information and advice.” Capterra
And B2B marketers are realizing how ineffective their ads can be as well.
- Almost a third of B2B marketers think paid advertising is the most overrated marketing technique—a waste of time and resources. Hubspot
Meanwhile, though, starting a B2B referral program is a reliable marketing choice.
- 65% of B2Bs with a formal referral program believe that referrals are “very important to their company’s sales success.” Influitive
- 55% of B2Bs with referral programs believe that their sales efforts are “highly effective,” compared to 35% of companies without referral programs. Influitive
- 51% of B2Bs with referral programs said that they were doing a very effective job at maintaining sales pipelines, compared to just 32% without referral programs. Influitive
- 89% of B2B marketers believe that customer testimonials are the most effective content marketing tactic. Ironpaper
- 68% of B2Bs with formal referral programs said that their referral tools are “effective” or “highly effective.” Influitive
- Surprisingly, though, only 30% of B2B companies have a formal referral program in place. Influitive
Why B2B referral marketing is powerful
B2B referral marketing harnesses the power of word-of-mouth by formalizing and simplifying the recommendation process. Referral programs make it easy for businesspeople to recommend your products or services to other companies, and often reward businesses for making these recommendations. And referred leads are the most valuable, because of the trust they place in their peers—they’re easier to nurture and more likely to convert into sales.
- 63% of marketers admit that their top challenge is generating enough traffic and leads. Hubspot
- Nurtured leads make 47% larger purchases than non-nurtured leads. The Marketing Blender
Referrals provide valuable leads who are already nurtured through peer recommendation:
- “84% of B2B decision makers start the buying process with a referral.” Influitive
- Referrals are 4 times more likely to make a purchase. DCR Strategies
- Referred customers have a 16% higher lifetime value. DCR Strategies
- And 86% of B2B businesses with referral programs grew their revenue in the past 2 years, compared to 75% of B2B businesses without referral programs. Influitive
Referrals work better than direct pitches from your company’s sales and marketing teams.
- 63% of customers need to hear a company claim 3 to 5 times before they actually believe it. This shows that B2B customers are more inclined to trust peer recommendations than direct claims from the businesses that are trying to sell them products and services. The Marketing Blender
- “Connecting with a prospect now takes 18 or more phone calls, callback rates are below 1%, and only 24% of outbound sales emails are ever opened.” Harvard Business Review
- Only 2% of cold calls result in an appointment — meaning that cold calls have a 98% failure rate. So, why not expand your marketing efforts by tapping into your existing customers’ recommendations, rather than just your own pitches? The Marketing Blender
- 61% of B2B buyers consuls “third-party” sources before a company’s salesforce. These sources include “feedback from a business partner; social channels; and conversations with peers who already have experience with the product or service.” Avanade
- For 89% of B2B decision makers, the above “third-party” sources are key to influencing buying decisions. Avanade
B2B employees trust referrals, both when buying and selling.
B2B salespeople and marketers trust referral marketing’s ability to source high-converting leads for their company.
- 87% of B2B frontline sales personnel, 82% of sales leaders, and 78% of marketers believe that referrals are vital to sales success. Influitive
- 71% of B2Bs report higher conversion rates from referrals than other customers.
- 71% of B2B frontline sales personnel, 75% of sales leaders, and 70% of marketers believe that referrals convert at a higher rate than other leads. Influitive
- 69% of companies with referral programs say that referrals take less time to close than other leads.
- 69% of B2B frontline sales personnel, 70% of sales leaders, and 67% of marketers believe that referred leads close faster than other leads. Influitive
- 59% of B2B frontline sales personnel, sales leaders and marketers believe that referrals have a higher customer lifetime value than other customers. Influitive
- 56% of sales representatives say that referrals are “very important” to their business. Influitive
- B2B marketers said the average conversion rate (from generating leads to converting sales) was 11% for referrals. Referrals beat all the other marketing channels by large margins when it comes to conversion rates. Marketo
And B2B executives, as well as other buyers, trust recommendations that come from referrals—good news for your B2B referral program.
- 73% of B2B executives prefer to work with sales professionals who have been referred to them by someone they know. IDC
- 76% of B2B executives prefer to work with vendors who have been recommended by someone they know. IDC
- Sales Benchmark Index reports that having a personal connection with a buyer (such as through peer recommendation) makes you 4.2 times more likely to get an appointment. RingDNA
- B2B buyers are 5 times more likely to engage when someone else introduces them to your company. RingDNA
- Industry experts and peers are the top 2 resources for B2B buyers to get advice. B2B Buyer’s Survey Report
How to create winning B2B referral marketing programs, and gain new business
So, what are some of the best practices for creating a B2B referral program? These stats provide the answers:
Develop a formal referral program using referral marketing tools.
- When referral marketing tools are used, B2Bs are “3 times more likely to accelerate referral generation and conversion.” Influitive
Advertise your referral program in email marketing campaigns.
- For every $1 spent on email marketing, the average business reaps $38 from such campaigns. Campaign Monitor
Actively ask for referrals from satisfied customers.
- According to Dale Carnegie, “91% of customers say they’d give referrals, but only 11% of salespeople ask for them.” The Marketing Blender
Your marketing department should run your referral program.
- B2B businesses that had a referral program managed by marketing were 3 times more likely to achieve their revenue goals. Influitive
In this increasingly mobile world, it’s also vital that you leverage mobile and social media as part of your B2B referral marketing. Let’s dive into the statistics in the next section.
Mobile marketing and social media marketing aren’t just crucial in the B2C realm—they’re equally important to B2B marketing. Just as consumers check out products on their phones, B2B buyers are investigating your company on their mobile devices.
- Over 45% of B2B tech buyers are millennials (age 25-34), making them the single largest purchasing group by age. And for millennials, using a smartphone for research and decision-making comes naturally. TrustRadius
- 73% of millennials in B2B “are involved in the technology purchasing process for their companies,” and 33% “are actually the sole decision maker.” TrustRadius
- Word-of-mouth is vital to millennial decision-making. 80% of millennials don’t buy any products or services before reading reviews! The Independent
But B2B buyers are going mobile, and are using social media, regardless of their generation.
- 8 out of 10 B2B buyers use a mobile device at work. Blue Corona
- Around 42% of B2B researchers use their mobile phone for purchase matters, both at home and in the office. GrowRev
- Google and The Boston Consulting Group (BCG) report that “mobile usage drives or influences more than 40% of revenue in leading B2B companies.” Swiftcloud
- Over half of B2B-related online searches are conducted using smartphones. Swiftcloud
- 55% of B2B buyers search for information on social media. GetCRM
- 75% of B2B buyers use social media to support their purchase decision. Blue Corona
So, make sure your referral program page, as well as the rest of your website, runs smoothly on both desktop and mobile.
- Over 90% of B2B buyers say they’re “likely to buy again from a vendor that had a superior mobile experience,” versus only 50% of those who report a poor mobile experience. Blue Corona
- 60% of B2B buyers report that “mobile played a significant role in a recent purchase.” Blue Corona
Also, be sure to optimize referral emails (the emails sent through the referral program from your satisfied customers to their peers) for both desktop and mobile.
- Up to 77% of email opens occur on mobile devices. Campaign Monitor
Influencer marketing campaigns aren’t just for B2C, either. The power of influencer recommendations can also work wonders for your B2B.
- After all, as we mentioned earlier, 91% of B2B purchasers’ buying decisions are influenced by word-of-mouth! Useful Social Media
- Also, a Nielsen Catalina Solutions and TapInfluence study report that “content shared from and created by influencers provided 11x higher ROI than the average display ad after 12 months.” Marketing Land
- 92% of B2B marketers believe that influencer marketing is “effective at reaching audiences.” Marketing Land
How should you go about choosing influencers to advocate for your products? There are important differences between the B2C influencer sourcing process.
- As Convince & Convert reports, your best bet for influencers are people your audience trusts and sees as authoritative figures, who already advocate for your product or service.
- So, you should “analyze and evaluate your existing customers, fans, business partners, and employees for evidence of advocacy and influence.” Convince & Convert
Remember that the best B2B influencers aren’t always those with a solid social media presence.
- “Authors, speakers, thinkers, podcasters, and researchers” your audience respects are great B2B influencer choices, even if they don’t have active social media accounts. Convince & Convert
Make sure that you allot a reasonable amount of time for sourcing influencers—-with B2B, this process is not instantaneous.
- “60 days is the minimum lead time necessary” for researching influencers and launching campaigns, as estimated by Convince & Convert
And don’t expect the results of B2B influencer marketing to appear overnight. After all, B2B decisions are often made by multiple employees, using a variety of nuanced factors.
- You shouldn’t expect results from a B2B influencer marketing program for at least 6 months. Convince & Convert
Notably, it’s better to form influencer relationships on a yearly basis (unlike with B2C marketing, where most influencers are recruited for short-term relationships.)
- 71% of B2B marketers believe that “ongoing ambassadorships are the most effective form of influencer marketing.” Marketing Land
As you can see from the above statistics, referral marketing and word-of-mouth are powerful tools for your B2B business. B2B marketers, salespeople, decision-makers, and buyers trust referrals. Be sure to optimize your referral program for mobile, and consider recruiting influencers.
Hopefully, after reading these referral stats and referral quotes, you have an idea of how starting a referral program can benefit your business. Remember that a formalized referral program and referral tools are especially key to your business’ success with B2B referral marketing. There are many options for referral marketing software on the market—let us know if we can help you start a B2B referral program.
Are there any compelling B2B referral stats or quotes that we missed? Let us know. We’d love to include them in this article.