Referral marketing can help B2B companies accelerate lead generation, sales, and customer loyalty. For this strategy to be effective, customers must be satisfied with a company’s products or services, so they would refer their peers to that company. The best referral programs are easy and accessible to customers, with a valuable reward or incentive that cannot be refused.
This guide will explore what referral marketing is, the benefits of this strategy, the best referral programs, and what you can learn from them.
What Is a Referral Program?
A buyer referral program is one form of word-of-mouth marketing (WOM). These programs incentivize existing customers to refer more customers to your business. Moreover, what makes referral marketing effective is that your buyers will most likely refer people to your business who share their wants and needs—you can gain interest from targeted buyers that have higher chances of purchasing.
Consequently, leveraging referral marketing is vital to generate high-quality leads that are more likely to convert. If a buyer is satisfied with your product or service, their peers will likely feel the same.
The Benefits of B2B Referral Programs
The best referral programs can increase customer value and loyalty, boost your retention rates, and grow your audience and sales. However, to leverage these advantages, B2B companies must do the following:
- Have a fantastic value proposition: Having your buyers refer more targeted customers to your business is only half the battle—the other half is winning over referrals and turning them into loyal customers. To achieve this, ensure you offer a sound value proposition, tailored to your target audience.
- Deliver excellent customer experience: Positive customer service enables buyers to make confident purchasing decisions and repeatedly return to your store. In contrast, negative customer support can damage your sales and reputation—businesses must ensure they use a “customer-first” approach and always manage customers with kindness and patience.
- Use an irresistible reward for referral marketing: Your referral reward must be relevant to your customers (something they would enjoy), and it should be easy for buyers to claim their rewards.
To improve any of the above elements, use questionnaires, polls, and surveys to get customer feedback. Based on this feedback, you can adapt your referral marketing accordingly and build a program that drives traction.
Once you have built this foundation for referral marketing, you can start reaping the benefits. Here are a few of the top referral marketing benefits.
Increased Customer Value and Loyalty
Referred customers have a positive first impression of your business because their peers have endorsed you. If you start buyer relationships on a good note, it will be easier to convince them to spend more money on your products or services, as they are already confident in your brand. To confirm this, statistics prove that referrals convert 30% better than non-referred customers and boast a 16% higher customer lifetime value (CLV).
Higher Retention Rates
Similar to increased customer value and loyalty, it is much easier to retain referred buyers because people they trust favor your brand. As a result, you are more likely to persuade these buyers to continue purchasing your products unless you give them a reason not to (terrible customer service, a poor value proposition, etc.). In fact, the same report by Invesp confirms that referred buyers have a 37% higher retention rate than non-referred customers.
Customer Base and Sales Growth
Remember, referral marketing is one form of WOM, and WOM spreads like wildfire. When people are passionate about a product or service, they want to tell their peers about it. Here is an example: if you invested in invoicing software that simplified your operations and increased efficiency by 20%, wouldn’t you share this with your peers? The more you nurture your buyer base and optimize your value proposition, the easier it is for referral marketing to expand your audience and boost sales.
4 Best B2B Referral Programs
We have explored the advantages of B2B referral marketing—now we can take a look at the most successful referral programs and what to learn from them.
Airtable
Airtable is a project management tool that has worked with over 300,000 organizations, and 80% of Fortune 100 companies use this software to organize and streamline their workflows. With global brands like Red Bull, Shopify, and GitHub in their portfolio, it’s no surprise that Airtable has one of the best referral programs.
How it works:
- Get your unique referral link from your Airtable page.
- Share this code with your peers.
- The invitee creates and verifies an account.
- You earn $10 in credit.
This referral program is successful because of how effortless it is to refer users and earn an incentive. Additionally, this is a win-win because you reward your customers with money, and they can only spend it on your products.
Gusto
Gusto is a trusted HR platform designed to simplify payroll, HR, and employee management, in one system. From hiring and onboarding to time and attendance, Gusto works with remote teams, contractors, new businesses, and small companies. Furthermore, this B2B platform offers a persuasive incentive to gain referrals for their company.
How it works:
- Sign in to your Gusto account.
- Go to Refer & Earn on the left-side menu.
- Get your unique referral code and share it on LinkedIn, Twitter, and Facebook.
- Your referral creates and verifies an account and pays their first Gusto invoice.
- You earn a $300 gift card, and your referral receives a $100 gift card.
It’s clear why Gusto’s referral program works—the incentive makes it worthwhile. Not to mention, it’s easy to refer users to Gusto, and it’s a valuable tool with impressive credibility. Gusto users can use gift cards to buy items from selected merchants, including Airbnb, Amazon, and Applebee’s.
DigitalOcean
DigitalOcean specializes in cloud computing and has over 600,000 customers in more than 185 countries. Users can find solutions for web hosting, VPS hosting, big data, streaming, mobile and web apps, and gaming. But DigitalOcean did not achieve all this success on its own—its marketing strategy includes a referral program.
How it works:
- Sign in to your DigitalOcean account and get your unique link to invite users to this software.
- Share this code with your peers.
- The person you refer creates and validates an account and adds a verified payment method.
- Your referral earns $200 in 60-day credit.
- Every time your referred users spend $25, you earn $25 in credit.
DigitalOcean has one of the best referral programs because the referral gains significantly. If buyers know their referrals will gain a guaranteed incentive, they are more likely to refer them. However, the referee also gains from this program, which they can use to invest in more DigitalOcean products.
Bench Accounting
Bench Accounting is a SaaS solution for bookkeeping, tax advisory, and filing. This software aims to help grow small businesses by equipping them with robust financial management tools. Furthermore, Bench Accounting has an impressive list of clients they have done business with—Stripe, Shopify, FreshBooks, and Square. This SaaS platform also relies on referral marketing to grow its users.
How it works:
- Log in to your Bench Accounting
- Get your unique code and share it with your network.
- A user clicks on your link and creates and validates an account.
- Your referral gets a free month of bookkeeping, and you get a $150 Visa gift card
- If the referred user becomes a client, they get another free month of bookkeeping.
This is another example of a dual-incentive referral (when both the referral and referee gain). But in this instance, only the referee gains a cash incentive (with no earning cap), while the referral gets to try Bench Accounting’s software for free—the ultimate reward. To take it a step further, Bench Accounting persuades referrals to use their software for at least 60 days, and by then, they would be fully migrated to this accounting platform, making it difficult to leave.
The Bottom Line
Referral marketing can be a game-changer for B2B companies looking to expand their customer base, increase retention rates and buyer value, and build brand loyalty. To leverage all these benefits, it’s essential to design a referral program tailored to your target audience, refine your value proposition, and offer an irresistible reward. Get inspiration from the best referral programs: Airtable, Gusto, DigitalOcean, and Bench Accounting to design a successful campaign in 2023.
