A referral marketing program, or brand advocate program, can be a powerful tool in your marketing arsenal when you do it right. It’s a feel-good situation for everyone around: 69% of companies with referral programs close deals faster, while customers trust a whopping 92% of brand recommendations made by people they know.
Unfortunately, lots of businesses don’t get the ROI they could be getting from referrals because they lack a systematic referral program. Another key challenge is the confusion between affiliate marketing and referral marketing — so let’s dive into that, first.
Affiliate and Referral Programs: What’s the Difference?
Though the terms are often used interchangeably, affiliate and referral marketing are actually two separate beasts. They both drive revenue to the business using a third-party (the affiliate, or the referrer). However, they have a few key differences:
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As you can see, while affiliate marketing is another effective way to grow your B2B sales, it requires a bit more forethought and formality than referral marketing. Because referral marketing can help you achieve more ROI faster than a full-fledged affiliate program, we’re focusing on referral marketing in this piece.
Now, let’s get to the essential steps to a killer referral program.
#1: Ask at the right time.
Oftentimes, businesses are inclined to ask a client for referrals after a project has ended, or when that client relationship is drawing to a close. Though this can work, you’ll have a ton more success if you ask for a referral at the moment a client is happiest with your work.
This could be early in the client relationship — maybe they just called you to share a success they had after using your product. This could be years into an enduring client relationship, when you’re meeting for coffee to catch up. The point is, don’t wait until things have fizzled to ask for referrals. Most people are more than happy to rave to their loved ones about a product or service that rocks.
#2: Know your target market.
Imagine your longtime landscaper asks you for a referral. You’re extremely happy with the flower garden they just planted, so you’re more than enthusiastic to recommend them to everyone you know. So you ask the landscaper what kind of customers they’re looking for, and they tell you: “anyone with a yard.”
Obviously, not everyone with a yard needs or wants a landscaper. And now, you’re thinking about everyone you know who lives in a house — how can you narrow that down to a few friends or family members?
But if your landscaper said something along the lines of “high-income homeowners who love flower gardens,” you’re likely to call several specific people to mind immediately.
If you don’t know your target market, there’s no way you can expect your client to get it right — and one hundred unqualified leads are as good as none.
#3: Give your clients a referral template they can modify.
Your clients are doing you a favor when they’re referring others to your business. And while most people are more than willing to put in a good word for you, it’s not always easy for them to know exactly what to say.
One way to overcome this is to provide a referral email template for your clients. Here’s a couple templates you can steal and modify to fit your business. (Imagine that you’re Earl, founder of Earl’s Crossfit. You’re asking two different customers, Jamie and Erin, for a referral):
Referral template to send to an old client (Jamie), for their use:
Dear [Joe],
Hey there, I hope you’re doing well! [Jane], meet [Earl]. I’ve been working with [Earl’s Crossfit] for [3] years, and I’ve had a really great experience. I thought you might want to learn more, so I’ve attached this [brochure] here for you and CC’d [Earl] so you two can talk.
Sincerely,
Jamie
Referral template to send to a new client (Erin), for their use:
Dear [Joe],
I just finished talking to [Earl] from [Earl’s Crossfit], who I recently hired to help me with [training for a triathlon]. I’ve already seen some results and I thought you might like to talk to [him], too, so I’ve CC’d him here.
Sincerely,
Erin
#4: Offer marketing materials that your referrer can share with their network.
Don’t make your client do all the legwork in explaining why you’re so awesome: let your best brochures, whitepapers, one-pagers, or even your website do the talking for you. Not only does this ensure your future prospects are getting the right messages about your business, but it also makes it way easier on the referrer.
Now that you have the four key steps to launching a B2B referral program, don’t wait: start asking your best customers for referrals right away. There’s an incredible domino effect to this marketing tactic, and all it takes is a bit of honesty and directness from you to stoke the fire of word-of-mouth networking.