Do Referrals Work?

Yes.  Most sales professionals already know this, but the statistics below show how powerfully referrals can grow sales.

As Mike Hanley, CISO of Cisco, said, personal introductions through peers or colleagues are the most reliable ways to meet with a CISO to talk about problems you want to solve. It’s a good idea to ask for a personal introduction through either venture capitalists we know or a friend or colleague in our network of CISOs.”

According to research done by Heinz/Influitive:

  • 84% of B2B decision makers begin the buying process with a referral. 
  • Companies with established referral programs show conversion rates that are 71% higher.
  • 59% of companies with established referral programs have higher lifetime value clients.
  • 69% of these companies report faster closing cycles.

According to SocialMediaToday.com:

  • 78% of B2B Marketers say that referral programs generate good or excellent leads.
  • 60% of marketers say that referral programs produce a high volume of leads.
  • 54% say that referral programs have a lower cost-per lead than other channels.
  • Marketers rate referrals as the second highest source of quality leads.

What makes B2B leads so effective? 

It turns out that B2B Decision makers value the recommendations of people they trust when buying, and they listen to these recommendations.

Since the referral has come from a colleague they know, there is already a greater sense of trust.  The referral is a warm lead.  This can produce a shorter sales cycle, less effort, a much lower client-acquisition cost, and even a longer lifetime value of the customer.

Referral sales are powerful because they require very little financial spend, and instead, they produce valuable warm leads.

It only makes sense to systematize the referral process.

B2B Referral Program Best Practices

There are two kinds of referral sources:

  • Referrals from existing clients
  • And referrals from colleagues

 

Here are referral strategies for both groups.

How to ask existing clients for referrals:

How to ask colleagues for referrals:

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