Did you know that word-of-mouth is directly responsible for 90% of all purchases?1 Consulting friends, family, and others online before buying is something most of us do before making a purchase. So how can B2B companies utilize referral marketing to take advantage of this buyer power paradigm?
The best way to encourage customers to recommend your products and services is to invest in referral marketing. In this article, we’ll walk you through the different types of referrals and identify five easy tactics to incorporate into your referral marketing strategy.
Referral Marketing: 3 Types of Referrals to Know
What is Referral Marketing?
Referral marketing is a marketing strategy that leverages the power of personal recommendations to promote a product or service. It involves encouraging existing customers, partners, or other individuals to recommend your business to their friends, family, or professional network. Referral marketing relies on word-of-mouth, a powerful form of advertising, especially in B2B, since buyers often trust the opinions and experiences of other professionals in their field above all else.
3 Different Types of Referrals to Know
Let’s break down the three main types of referrals your business might encounter as you grow:
1. Experience-Based Referrals
This is the first type of referral that comes to mind for most marketers when looking to drive new business. Experience-based referrals are derived from direct experiences working with your company. If your current customers value your services, your people, and the work that you do, they might choose to share this goldmine with their friends and business partners.
Carrying more weight than the other two types of recommendations, experience-based referrals require a little more effort to secure. Some of your current and past customers may have a tough time getting their leadership to approve case studies and other referral takeaways that can live online or in print. But if you’re able to procure these resources or encourage word-of-mouth referrals, you’re setting yourself up for more qualified leads and beneficial partnerships.
2. Reputation-Based Referrals
When professionals are familiar with your business and its reputation but haven’t yet worked with you directly, they might still be likely to refer you to friends, family, and other business professionals who could benefit from your offerings. Reputation-based referrals assume that your projects and overall track record are well-known to those in the industry or to the general public.
Businesses with greater reach are more likely to receive these referrals, which means they will build awareness by regularly touting their successes and participating in their community through online and offline engagement. If you’re really looking to stand out among your competitors and acquire new customers through this type of referral, you’ll need to invest conscious effort into building brand awareness and maintaining good relationships with your audience.
3. Specialization-Based Referrals
On the flip side of reputation-based referrals are specialization-based referrals. These referrals come from people who are aware of your specialization and general services but lack real knowledge about your reputation. While not as powerful and often overlooked, recommendations based on pure presence in your niche can still put your brand in front of your desired audience. But be prepared to put some muscle into exhibiting your unique value to referral leads; they won’t know the level of service you can provide or arrive with previous knowledge about your experience or industry standing.
Don’t forget to ask new leads how they heard about you so you can refine your referral marketing strategy and work on tactics to increase brand awareness. A solid marketing strategy takes advantage of all three types of referrals by investing time, energy, and talent into these tactics.
5 Referral Marketing Tactics to Keep in Mind
Now that we’ve reviewed the basics, you can start developing a clear referral marketing strategy. To kick things off, here are five tactics to keep in mind throughout the process.
1. Engage Top Referral Sources
If you know your business well, it’s easy to identify potential referral sources within your list of current clients. Those you’ll want to keep an eye on include clients that take advantage of multiple products or services, have outspoken and friendly team members, maintain a good relationship with your staff or account manager, and work closely with companies that fit your ideal customer profile. Build upon your mutual trust by cultivating business and personal relationships, informing their team of your company’s developments, and conducting yearly in-person meetings. If you obtain a new lead or customer through a client referral, remember to personally thank them with a prompt phone call, handwritten note, or a small gift of appreciation.
2. Develop Case Studies
To increase reputation-based referrals, reach out to your top clients about creating a case study around their success stories with your company. This tactic can be tricky, as it’s sometimes difficult for clients to obtain approval to participate in any case study that releases specific data. However, this is one of the most direct ways to capture the interest of new leads who want to see real examples of your company’s work. Here’s a great example where our client, BAMCO, was happy to share some of the successes they’ve experienced through our partnership. None of the data presented is sensitive in any way and provides clear insights into the types of work we’ve done and the results achieved.
Case studies and testimonials can take the form of a brief blog, a small featured item on your website, or a full-length content piece. Circulating these “real-life” demonstrations of your capabilities in print or online will give prospects a better chance of encountering your work and understanding how your company can make a difference.
3. Engage With Industry Experts
Connect with other leaders in your space, such as writers of industry publications, indirect competitors, and other thought leaders, to offer an outlet to share opinions about relevant and timely industry topics. By profiling these experts or showcasing their ideas on your own platforms, you give yourself and them a chance to share knowledge and initiate productive dialogue within your community. Your collaborative creations can be distributed through a blog, podcast, social media, or any number of outlets to effectively increase awareness for both parties. This interaction will also set the foundation for experts to make both specialization-based and reputation-based referrals.
4. Distinguish Your Specialty
When more people know about your specific strengths, you’re more likely to get a specialization-based referral from website visitors or those who hear about you through industry chatter. Don’t just operate in your field – define your distinct niche and tout your experience by highlighting unique clients and projects.
Possessing a specialty will position you as a leader in the industry, even if you’re not quite ahead of your competitors. Buyers often seek out businesses that advertise capabilities catering to highly specific needs, so don’t worry about pigeonholing your business – you’ll gain traction, attracting a unique audience and more qualified leads by satisfying the neglected needs of customers.
5. Ensure All Teammates Are Visible
Don’t forget to leverage your internal team when building a referral marketing strategy. Put a face to high-profile individuals at your company via your website and consider talking to other team members about employee engagement. Don’t just sit on your talent. Highlight your leadership team and everyday experts through employee spotlight blogs and encourage staff to build professional personal brands online to engage with others in your field, including prospective customers. Friendly and discoverable teammates will increase your company’s brand awareness and help with reputation-based referrals.
Already practicing some of these tips? Incorporate the others into your referral marketing strategy to add another layer to next quarter’s marketing plan.
Build Your B2B Business Through Referrals
Do you need help with referral marketing or other B2B marketing services? Schedule a free consultation with the experts at Sagefrog to review your marketing challenges and goals and get recommendations on the best tactics for your business. Identifying goals and making the needle move can be challenging on your own, but with a trusted partner, you can start generating the engagement your business needs to not only survive but thrive against the competition.