“Referral leads convert 30% better than leads generated from other marketing channels”, with B2B referrals closing at rates above 70%, according to the latest research.
Referral networks and referral partners are invaluable for any company. It doesn’t matter whether your selling loans and development finance, or software development, without referrals, you will have to work twice as hard to pull in new customers.
And here is the beauty of it - you aren’t doing all of the work. Your customers and referral partners are. Inbound referrals come with a level of trust attached, making a conversion far more likely than a warm or cold lead. So how do you get started?
Building a referral network
#1: Who are your top customers or partners?
Look for the strongest relationships. The most long-lasting, or those who spend the most, and especially those who’ve already referred business to you. And ideally, those who you’ve helped out too. A close working relationship is key to identifying a referral partner.
In the services sector, it could be someone who offers complimentary services. As a web developer firm, you might work closely with designers and other marketing professionals: suggest you make referrals more proactive. Reactive referrals are great, of course. It is revenue you aren’t expecting. But making them proactive - it takes a little more work, and a collaborative mindset - and everyone wins.
#2: Ask for referrals
Unless a referral comes in unexpectedly, you need to ask for them. Ask early into a new client relationship, when they’re getting used to the service you are providing and more likely to tell others. Making referrals a natural extension of this new working relationship.
Or when you are talking to those you’ve known a while - or worked with on joint projects - introduce the topic of referrals with an incentive, to encourage a proactive approach.
#3: What sort of incentive to offer?
For clients, you could offer a percentage off next months invoice. Or a gift of some kind: an Amazon voucher, bottle of wine, box of chocolates, or something personal that shows how much you value the referral.
Commission is another way to offer an incentive to referral partners. If this is common in your industry - such as finance - there will be guidelines to follow. In other sectors, such as marketing and web development, it is a guessing game. Offer what you can afford. Not too much that it cuts into your margins, or too little that it is no incentive at all.
#4: Clarify how you want to be introduced
Referrals should be a great way to generate more revenue. Except when you get sent one lead after another that is never going to result in a conversion. When is a lead not a lead?
- No budget
- Don’t need your core services
- Don’t understand what you offer
- Not a decision maker
- Wasting everyone’s time
Give anyone who’s going to send leads across a few lines to drop into emails, a simple formula for introducing you and what you do. At the same time, give them an outline what to look out for: a sort of ideal client checklist. This way, you should avoid struggling with too many referrals that you can’t help, or who can’t afford your services.
Taking these steps can quickly give you a lean and working referral partner network. For companies that want to take it a step further, software firms in particular put together referral portals, complete with payment systems when inbound leads go straight to a payment page. SaaS companies in particular need a more robust and scalable solution, which is why they invest more in referrals, creating content and downloadable sales materials that make referral partners an extension of the sales team.
If you are taking a more proactive approach, providing your partners with an easy screen sharing solution could be useful. Make it easy for them to make live video introductions, on any device, with CrankWheel.