For many B2B companies referrals are a key driver of new business. A referral is when an existing or past customer refers your company to a colleague, friend, vendor or other business contact. Referrals can be incredibly powerful as they lend credibility to your company. As part of our marketing planning process, we interview many of our clients’ customers and for many of our clients referrals are frequently the greatest influencer or one of the greatest influencers in choosing to do business with a particular company.
What does this mean for your business? The first step is understanding what referrals mean for you. Do you have insight into how many of your customers/past customers currently refer you or would refer you when asked? If you currently track lead sources (and referrals is one of those sources), you can mine your data to understand the number of referrals you receive, trends in terms of which contacts are referring business to your company and changes in frequency.
The second step is cherishing these referrals. It starts with valuing the customer/contact that provided the referral followed by quickly responding to the referral, being professional and delivering quality work. Depending on the nature of your business, a formal referral program may be beneficial to implement. In such a program you can provide referees with special benefits for introducing you to new customers. These special benefits can range from a discount on their next order, financial incentive or personalized gift depending on the nature of your relationship. In our experience, referral programs can work extremely well in some industries, and terribly poorly in others. Before you launch a formal referral program, evaluate if it can work for you.
The third step is integrating new customers into your contact database so they will be part of your customer nurturing program. Ongoing communications with relevant and appropriate content will keep your customers engaged, nurture relationships and create ongoing opportunities for referrals.
If you don’t know how much business is being driven by referrals, get started today. Mine your data or start a tracking system (even a simple Excel spreadsheet will do) – this will allow you to establish a baseline and begin the steps of developing a more formal process for referral business.