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If you have a community or service that people want to spread the word about, but you don't know how to automate or scale that process without drowning in manually sending gift cards every day - I've been there.
I promise there's an easy way to make your B2B referral program effective, automated, and on-brand.
But before we get there, let me give you some context. Partnership Leaders is a close-knit community of like-minded peers in the partnerships world. We help people in the partnerships ecosystem by connecting experts with resources and private channels so they can get expert advice in real-time, as well as hosting virtual and in-person events for relationship building.
After joining and seeing the value of the group, our members were naturally recommending Partnership Leaders to their colleagues and peers in the space. We knew there was an opportunity to grow this word-of-mouth marketing, but needed a scalable solution that fit our brand.
We had heard of Friendbuy for powering referral programs for other more direct to consumer types of businesses, like Disney and AWAY and Athletic Greens. But what we didn't know was that it was a powerful tool that could power a B2B referral program that would fit Partnership Leader's goals like a glove.
What Are B2B Referral Programs?
We know that B2B businesses have a unique opportunity to harness the power of advocacy and reap the benefits of a well-structured referral program. Referral programs, commonly known in the B2C space for incentivizing existing customers to refer new customers, can help B2B businesses fill their pipeline too.
So let's take a step back and look at what a B2B referral program is.
In its essence, B2B referral programs encourage and incentivize existing clients, customers, or internal teams to recommend the company's products or services to other businesses within their network. This capitalizes on the trust and credibility that people have cultivated within their industry, making their referrals highly influential in the decision-making processes of potential new clients.
In fact, Friendbuy has seen that referred customers often have a 5x higher conversion rate compared to non-referred customers.
There are a few key components of every referral program:
1. Your existing audience
This is the audience that you incentivize to refer. It could be your existing clients or your partners.
2. Your referrer and referee incentive
Your referral incentive is the offer that you make to encourage your audience to refer. You might incentivize them with a gift card, or company swag, or an invite to that cool event you're planning. Whatever it is, it better be exciting enough to encourage people to spread the word.
As a best practice, you should have an offer for both the referrer and the referee. For example, if someone refers their colleague to Partnership Leaders using their referral link, and the referred colleague signs up, both parties get a $50 gift card. This helps ensure everyone is invested in closing the deal - the referrer will make sure the referee takes action, and the referee is excited to sign up and get their $50 gift card.
3. Reward automation
Issuing rewards for referrals without delay is really important if you're looking to scale word-of-mouth. The last thing you want is to get someone excited about their gift card ... and make them wait five weeks to get it. I'll talk more about the importance of automating your referral rewards later on.
With these elements in mind, let's move to the benefits of having a B2B referral program.
The Benefits of Starting a B2B Referral Program
There are four key benefits of incorporating referral programs into your B2B marketing arsenal.
It's a Low Customer Acquisition Cost (CAC) Channel
Referral programs are a highly cost-efficient customer acquisition channel for B2B businesses. Instead of investing time and money into outbound marketing campaigns or paid ads, referral programs leverage existing customer networks to attract new prospects.
By incentivizing loyal customers, partners, and internal teams to refer potential clients, you tap into a vast pool of like-minded, high-quality leads. These referred prospects are more likely to have a genuine interest in the products or services offered, reducing the need for extensive lead qualification processes.
It Generates High Lifetime Value (LTV) Customers
Converted referred leads often have higher lifetime values. When you give customers, team members or partners the chance to refer people they know and reward them for it, they are more engaged and connected to your brand. And, when someone is referred, they feel like they have an "in" and are more likely to become loyal, long-term clients.
B2B Referral Programs Drive High-Intent Opportunities
Referral programs are a powerful driver of high-intent opportunities for B2B businesses. When a satisfied customer or partner refers a potential client, they are endorsing your brand's credibility and value, instilling trust in the referred prospect.
Referred prospects bring that trust and interest into the sales cycle, expediting it and reducing the time and effort required to close deals.
Turn Customers and Prospects into Long-Term Advocates
As I mentioned before, referral programs are not limited to customer referrals alone. When setting up your B2B referral program, think creatively about the audiences you already have and how you can incentivize them to help you hit your goals.
For example, consider how you can best incentivize your partners to refer new leads. Go beyond just the representative you work with on the daily, and consider their sales and customer success teams. If you make your referral program known and widely accessible to those teams, they'll be personally incentivized to refer clients to your business. Say your partner's account executive is in a sales cycle, and learns that a prospect is looking for a service you provide. They'll be excited to recommend your business with their referral link, as they'll ultimately receive the reward if that prospect books a demo.
Beyond just the incentives, the referral process ultimately turns your partners and customers into your brand advocates. That kind of loyalty and brand recognition creates a stickiness that will help you sustain organic lead flow for the foreseeable future.
What Most B2B Referral Programs Are Doing Wrong Today
As I was researching referral software for Partnership Leaders and outlining what would make it successful for our team and audience, it became abundantly clear how other brands are missing the mark today.
Problem 1: Manually tracking referrals
In the B2B world, referral programs typically include manually recording a referral and eventually, manually rewarding the referrer.
Problem 2: B2B Referral Software is Outdated and Doesn’t Match Your Brand
Many of the softwares we came across were outdated and didn’t have the ability to customize widgets to perfectly match your brand, the way that Friendbuy could.
Those are both significant problems because:
1. It isn't scalable - you don't want your team spending time in an outdated spreadsheet, trying to track down who referred who, if the deal closed, and who needs a gift card.
2. It ruins the referrer and referee experience - in so many ways. First, without having a clear referral landing page or widget, someone might want to refer business to you but have no way of knowing how to do so. None of us want to do things that aren't easy, so you should make referring high-intent leads to your business ridiculously easy. Secondly, we all love instant gratification. If you leave rewarding your referrers and referees to a manual process, it's likely that there will be delays in sending their rewards, or they might not ever get it due to human error. Delaying or messing up the rewarding experience is a surefire way to have people stop sending you leads. And finally, having a referral program that isn't on brand impacts your credibility and image.
B2B Referral Program Examples
Now that I've covered what's wrong with most programs today, let's look at how to set up your referral program for success with examples.
Step 1: Match Your Customer Journey
At Partnership Leaders, it was really important for our referral program to look amazing. We wanted it to look and feel like an extension of our brand, as I'm sure all businesses do.
Check out the below - we worked closely with the Friendbuy design team to create a dedicated referral program landing page that seamlessly fits with the rest of our site design.
We link to this landing page in all of our referral program promotions, which I'll cover next.
Step 2: Referral Program Awareness & Accessibility
Shockingly enough, in order for people to refer business to you ... they need to know you have a referral program! All jokes aside, driving awareness of your referral program to your customers and partners is essential to start encouraging them to refer. Even if they don't refer on the spot, letting your audience know you have a referral program, and reminding them every month or so, will keep it top of mind. That way when they are ready to share your brand with someone, they'll know where to go and what the reward they'll get for making the intro.
When we launched our program, we heeded Friendbuy's advice and announced our program to members with an email blast and social media post.
Step 3: Offer Double-Sided Incentives and Game Your Sales Cycle
As I mentioned before, it's important to incentivize both the referrer and referee. For example, our Give $50 Get $50 CTA you saw above is a double-sided incentive. Some B2B businesses opt to only incentivize the referee - for example, book a demo through a partner and the new client gets one month free. But when you incentivize the referrer as well, they're more likely to continue to send people your way.
To take it a step further, you can do double-sided incentives throughout the sales cycle. For example, let's say Asher refers Sam to sign up for a demo, and they both get a $50 gift card. Then, if Sam actually signs a contract, both Asher and Sam get another $150 gift card. This way, both parties are invested in not just making the intro, but closing the deal. And it gives your sales team a leg up - let's say Sam goes quiet and stops replying to sales outreach for a while, your team could ask Asher to follow up and help bring the deal back to life.
It's important to consider your cost-per-acquisition when choosing your incentives. For example if you know that on average it costs you $200 to acquire a customer, then take that budget and split it between the referrer and referee incentives. And keep in mind that Referred Friends often have a 3-4x higher lifetime value compared to non-referred customers, so acquiring that customer with a similar or lower CPA than you normally have will continue to pay off.
Step 4: Automate Rewards and Fraud Detection
Save you and your team the headache of manually tracking and sending rewards for referrals. Implementing a referral program with a tool like Friendbuy means your referrers and referees will receive their rewards quickly, without you having to lift a finger. It will also help protect you against referral program fraud, as it automatically ensures referred friends are new customers, accounts for cancellations, and prevents self-referrals.
Why Partnership Leaders Chose Friendbuy
If you're a business leader looking to implement a beautiful, easy-to-use, automated referral program, I can't recommend Friendbuy enough. There are four things that set Friendbuy apart from other B2B referral software providers.
Stunning Design and An Intuitive User Experience
Creating a sense of pride in everything Partnership Leaders does is paramount. We needed a referral program that not only functioned flawlessly but also looked modern and visually appealing. Friendbuy's design team worked closely with us the entire time, and we couldn't be happier with the result.
Exceptional Customer Support and Project Management
Our customer success manager and onboarding contacts at Friendbuy played a crucial role in getting our program set up. They didn't just focus on getting us launched, but getting us launched in a way that we could continually optimize and scale over time.
Fully Automated and Hands-off Referral Program
Our program is now running on cruise control. When someone refers, their reward is sent right away, and everyone is happy.
Running Multiple Campaigns with Flexibility
Friendbuy's platform allows us to run multiple referral campaigns simultaneously. Apart from our evergreen referral program of Give $50, Get $50, we also introduced a campaign encouraging our members to refer a friend to attend our conference, Catalyst. That just shows the flexibility of their platform, as we're able to have multiple campaigns, each driving different company goals, live at the same time.
If you walk away with one tip from this entire article, it's that creating an efficient referral program is easy with the support of a best-in-class referral marketing platform and team. If you're ready to fill your pipeline with high intent opportunities, reach out to the Friendbuy team here.