You’ve probably heard of or even know what B2B referral is and what it entails. No? No problem. For the sake of the newbies, let’s start with an overview of B2B before running down the figures that matter most.
B2B, abbreviation for business-to-business, is a model that involves companies/firms selling their goods and services to other companies rather than consumers.
Referrals come into the picture when loyal customers go out of their way to suggest the services or products of a company to their peers and even colleagues. B2B referrals can take many forms including peer recommendations and formalized B2B referral programs. These referrals are a key contributor to growth which is why it is important to understand the most important figures around them.
- 83% of the customers are open to referring a business after conducting a successful purchase.
- 78% of the B2B referrals create viable customer leads for the business.
- Just 3 in every 10 B2B businesses have a formalized referral business.
- Referrals end up creating 65% of new business opportunities.
Millennial’s influence on B2B Referrals
- Millennials use their phones to perform research and they are involved in 45% of tech buys.
- 92% of the millennials use social media as a channel of communicating with the industry brands and B2B businesses should use this to an advantage to retain them as loyal customers.
- It is important for a B2B referral business to maintain a good online persona because 80% of the millennials do not purchase a product or service without reading the reviews about it.
- 28% of millennials will not purchase a product or service if their peers do not give it the stamp of approval.
The Impact of Technology on B2B Referrals
Technology influences the decision making of both customers and businesses involved in the B2B model.
- Well over 90% of B2B customers are likely to purchase from a seller who gave them an elite mobile experience while only 50% of buyers are likely to purchase from a seller whose mobile experience was not that good.
- 80% of the B2B customers use a mobile phone device at work.
- A Google research estimates that up to 40% of the revenue in B2B referral businesses is influenced by the usage of mobile phones.
- Over 50% of online searches that are conducted in relation to B2B businesses are credited to smartphones.
- The use of mobile phones reduces the time taken to make B2B purchase by 20%.
The Influence of Social Media on the B2B Referrals
- The posts that businesses make on their social media pages influence the decisions of up to 78% of the customers following them on those platforms.
- About 50% of people share information on their social media platforms about the purchases that they make.
- 43% of people are more likely to purchase a product or service from a business when a friend or family member recommends it to them via social media.
- 81% of purchasing decisions in the United States are influenced by the posts that are made by friends and family on social media.
- 58% of customers talk about their positive experiences with a brand on social media.
- 40% of customers will provide feedback on social media about a business’ products or services.
The Contribution of Friends and Customer Reviews on B2B Referrals
Online reviews by customers also contribute to the success rate of the referrals of a business.
- Customers who are referred to your brand have a 5 times more likelihood to utilize your referral programs as compared to those who were not referred.
- A potential customer who is referred to a business by a friend is four times more likely to make a purchase as compared to any other customer. In comparison, 63% of customers need to hear a company’s claim at least 5 times before actually believing it.
- 91% of customers in the United States share information about offers, discounts and good deals with their friends and family.
- More than 50% of potential buyers consult third party sources of information such as friends and family before making contact with the company’s sales department.
- 88% of customers trust the reviews they find online just as much as they trust the information they get from their friends and family.
- 7 out 10 potential customers have more trust and belief in online reviews that have been done by customers as compared to online reviews that have been performed by professionals.
Financial Statistics around Referral Programs
- 54% of B2B referrals have a much lower cost when compared to other sources of leads.
- Companies that have a formalized referral program or those that utilize referral tools such as software are 3 time more likely to achieve their revenue targets as compared to the companies that do not employ formalized referrals.
- The use of referrals holds a very big influence on the success of sales for over 55% of businesses.
- B2B referrals provide 30% more of leads that generate revenue for the business as compared to other marketing channels.
- With 85% of customers wanting to associate themselves with strong brands that have a good reputation and influence, referral programs provide marketing at virtually no cost.
The Effectiveness of B2B Referral Marketing
- In 58% of the businesses, the marketing personnel becomes very involved with marketing due to referrals while its only in 15% of the businesses where they get very involved without B2B referrals.
- 87% of sales marketing efforts are effective when using B2B referral marketing while only 42% of the sales marketing efforts are effective without.
- 67% of the sales pipeline is effective when using the B2B referral program while only 36% is effective without.
- 27% of sales officers attributes up to 50% of the new clients that they get to B2B referrals.
- 71% of sales personnel, 75% of the sales leaders and 70% of marketing personnel believe that majority of the B2B companies record a bigger conversion rate from referrals as compared to other channels.
- More than 65% of companies that have referral programs agree that referrals take a short period to generate income than other marketing techniques.
- 56% of sales team members believe that referral programs are crucial to their businesses.
- 76% of senior management personnel prefer working with suppliers that have been referred to them by someone they know.
- The use of referral marketing tools boosts the referral generation and conversion by a factor of 3.
- When business referral programs are managed by the marketing department, they are three times more likely to achieve their income targets as compared to when there is no designated marketing department managing them.
The Importance of B2B Referrals in regards to Business Outcomes
- 86% of companies that have a set up formalized referral program recorded growth as compared to just 75% of businesses without B2B referral programs.
- 68% of businesses employing B2B referrals show that referral is either effective or highly effective with respect to the anticipated business outcomes.
- A business registers an at least 16% profit from customers who are referred to the business.
- The referred customers have a 37% higher retention rate as compared to those who were not referred. They also have an 18% higher rate of becoming long term clients as compared to the non-referred ones.
- 55% of businesses with B2B referral programs show much more effective sales efforts as compared to 35% of companies without these programs.
- 82% of small businesses consider referrals to be their main source of advertisement and income.
The Impact of Word of Mouth Marketing in B2B Referrals
Word of Mouth Marketing is a form of advertising that involves a customer talking about the product(s or service(s of a business following their experience with it. B2B customers are heavily influenced by word of mouth when making purchase decisions.
- 91% of B2B referrals influence customers by word of mouth.
- 88% of the potential customers of B2B businesses seek a word of mouth assurance before making a financial decision to purchase from the business or not.
- 75% of consumers consider word of mouth as the key influencer in making purchasing decisions.
- 56% of people who purchase products or services from a business seek a word of mouth assurance from an offline platform before making the purchase decision.
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