B2B referral programs are the "word-of-mouth" marketing of the digital age, driving significant revenue with phrases like "link in bio" and "click below". This powerful strategy can take your business to new heights, thanks to its ability to reach new customers and markets. So, what exactly is a B2B referral program, and why should you be using one?
Throughout this guide, we'll cover everything you need to know about building a wildly successful B2B referral program. It's simple: when we work together, we grow faster together. A referral program can become one of the most important parts of building your larger partner ecosystem.
Are you ready to learn how a B2B referral program can revolutionize your business growth, lead generation, and customer experience? Let's dive in!
👉 What you’ll find:
- The major benefits of a B2B referral program
- Key B2B referral program stats
- B2B referral program examples
- How to build a B2B referral program
- How to choose the right incentives
- How to ask for referrals
- How to automate and streamline your program
What is a B2B referral program?
A B2B referral program is simply an arrangement where your business rewards another business or individual for recommending your products or services to their network of business customers. It's all about leveraging the power of trust and existing relationships to reach potential customers who might not have otherwise found you.
Recent data shows that B2B referral programs are on the rise, with businesses recognizing the immense value that trusted recommendations can bring. Building a referral program empowers B2B marketing and sales leaders to tap into the lucrative $21.1 billion global influencer market, enabling them to meet their buyers right where they are.
This exponential growth indicates that the word-of-mouth economy is here to stay, providing limitless opportunities for influence and growth.
B2B vs B2C referral programs
B2B = business to business and B2C = business to consumer, but while the core building blocks are the same for these different types of referral programs—rewarding partners for bringing new business your way—there are a few other key differences between B2B and B2C referral programs. The same goes for direct to consumer (D2C) referral or affiliate campaigns.
In B2B referral programs, the relationships are often more strategic, with long-term partnerships forming the backbone of your program. Moreover, the decision-making process in B2B buying decisions is more complex and longer, often involving multiple stakeholders. This makes the personal trust and credibility offered through a referral even more valuable.
B2B referral programs vs affiliate or influencer programs
Like referral partners, affiliate and influencer partners also drive business your way through their networks. These types of partners are similar in many ways, and the terms are sometimes used interchangeably.
Historically, though, affiliates and influencers have usually operated on a solely commission basis and relied heavily on their online presence. On the other hand, referral programs often rewarded partners not just for the initial lead, but also for continued support and added value.
How you interact with, name, and compensate these partners will vary depending on your business and industry, too. And, the definitions are becoming increasingly blurred nowadays when technology solutions are making referral and affiliate tracking easier to manage and track.
For example, Impartner's referral tools now give B2B influencers like affiliate partners, referral partners, or hybrid partners the capability to utilize personalized URL links across any online platform. B2B companies can bring any partner type into their ecosystem and incentivize them to deliver new business in a way that meets modern marketing and existing business workflows.
🔎 Discover more: Learn more about affiliate vs. referral partner programs in our full post!
What are the benefits of a B2B referral program?
Implementing a B2B referral program can have multiple benefits for your business, from significantly amplifying your reach to adding a layer of credibility to your offerings.
In general, these are the major benefits of building a B2B referral program:
- Save time: By outsourcing internal sales to a group of B2B referral partners, you can significantly reduce time spent on your team to source new leads.
- Expanded reach: By leveraging the networks of your referral partners, a B2B referral program can significantly amplify the visibility and reach of your business.
- Enhanced trust and credibility: Referral partners can vocally and loudly vouch for your business, adding a layer of trust and credibility to your products or services. This can increase your business's appeal to potential customers.
- Increased sales: With the added credibility and trust from people they trust, potential customers are more likely to consider your products or services for their needs. This is especially important for B2B SaaS referral programs which ask customers to make large, long-term investments into your product.
- Cost-effective lead generation: Referral programs utilize the power of existing relationships to generate leads, often making it a cost-effective alternative to running extensive marketing campaigns.
How successful are B2B referral programs? Key stats
Again, building a referral program empowers you to tap into the $21.1 billion global influencer market. Other major statistics underline the power of B2B referral programs:
- According to Nielsen, 88% of global respondents trust recommendations from people they know more than any other channel.
- Exploding Topics notes that 86% of B2B buyers say word-of-mouth is the most influential factor in making purchase decisions, and 68% of B2B professionals say they use word-of-mouth as a key information source multiple times per week.
- In a survey of tech vendors, TrustRadius found that referrals were the most effective B2B marketing tactic.
These stats can't be ignored. In a time when over 50% of people in the U.S. take no action at all on mobile or online banner ads, referral programs allow you to meet consumers where they are most open and receptive to advertising.
With such impressive figures, it's clear to see why more businesses are harnessing the power of referral marketing.
The best B2B referral program examples
Seeing is believing, and there are many successful B2B referral program examples to draw inspiration from. Large companies like Salesforce, Dropbox, and Slack have all leveraged the power of referrals to grow their businesses exponentially.
- Salesforce: As one of the world's leading CRM providers, Salesforce operates a successful referral program that offers existing customers or partners a certain amount for every referred lead that turns into a Salesforce subscription. This approach encourages Salesforce's customers to bring in more business, making it a highly efficient method of attracting new clients.
- Dropbox: This referral program is a classic example of success. By simply offering additional storage space as a reward for both the referrer and referee, Dropbox saw its signups increase by a whopping 60%. This model made referrals a win-win scenario for both parties and contributed significantly to the platform's user base growth.
- Slack: The company effectively leveraged word-of-mouth referrals at its launch. Early adopters were so impressed with the platform that they began sharing it within their professional networks, contributing to Slack's rapid growth. Slack's referral program created advocates out of its customers and allowed it to scale up its user base.
- HubSpot: Their partner program allows agencies and service providers to earn commissions for referring new customers. Not only does this B2B referral program foster a sense of community among marketers, but it also drives new customer acquisition for HubSpot.
The effectiveness of referral programs is not exclusive to large corporations, though. The beauty of referral marketing is its scalability and adaptability. Businesses of all sizes, across various industries, can tailor their referral programs to suit their unique needs and objectives. The fundamental principles remain the same: provide value, incentivize, and nurture relationships.
Looking at these successful examples, businesses can glean valuable insights into creating and managing their referral programs. From Salesforce's monetary rewards to Dropbox's clever use of additional storage space, there is a multitude of ways to incentivize referrals that align with your business offerings.
How to build a B2B referral program
Harnessing the power of B2B referral programs has never been more critical. As we noted earlier, an impressive 88% of people trust recommendations over any other form of marketing.
With such undeniable potential and in an era where traditional advertising tactics are losing their sheen, referral programs are your key to engaging customers effectively. Now is the perfect time to explore the steps to build a successful B2B referral program for your own business.
This is how to build a successful B2B referral program:
- Set your overall strategy and objectives
- Identify the best B2B referral partners for your business
- Find the right B2B referral program incentives
- Learn how to ask for B2B referrals and partners
- Automate training and tracking for your partners
- Optimize your program based on data
1. Set your strategy and objectives
The first step in building a successful B2B referral program is to clearly define what you hope to achieve. These objectives could range from increasing customer acquisition to improving customer experience, boosting brand awareness, or driving more sales. It's important to be specific in your goal setting to effectively measure the success of your program later on.
For example, if you are a SaaS company, your objective could be to boost annual recurring revenue (ARR) by increasing new subscriptions through referrals. Alternatively, if you're a consulting firm, you might want to focus on expanding your network of high-quality leads in a new industry.
🔎 Discover more: Easily set up and onboard your new referral partners, with our free referral partner agreement template. Download it now!
2. Identify the best B2B referral partners
Referral partners typically fall into a few different categories, and finding the right ones for your business will depend on your industry, target audience, and specific objectives. In general, though, referral partners often include:
- Satisfied customers: These are people who love your products or services and are likely to recommend you to others. They often provide the most genuine referrals because they have personal experience with your business.
- Business partners: These can include suppliers, vendors, or other organizations you have a working relationship with. They have a vested interest in your success, and they're often willing to refer potential customers to you.
- Industry influencers: Influencers are individuals who have built a substantial following in your industry. They can be bloggers, social media personalities, or industry experts who can leverage their platform online and at speaking events to recommend your business to a wider audience.
- Value-added referral partners: Traditionally, value-added resellers (VARs) would sell a supplier's product as part of a larger offering, adding their unique services or features. However, as clients often prefer to sign contracts directly with suppliers, many companies have shifted their approach, transforming VARs into Value Added Referral Partners (VARPs).
With VARP relationships, customers get the best of both worlds. They can work directly with the vendor while still reaping the benefits from the value-add that the partner offers. This process typically includes the VARP sending a referral to the supplier, the supplier working directly with the end customer, and the VARP providing value-added services to the end customer.
For a software company, this could mean engaging with IT consulting firms or implementation specialists as VARPs. These partners could provide value-added services like customized implementation, ongoing support, and specialized training to end customers, while the software company maintains the primary relationship with the customer.
In each of these scenarios, the ideal referral partners are those who have a strong affinity for your products or services and a network of potential customers who could be interested in what you have to offer. Identifying and nurturing these relationships can be a powerful driver of growth for your business.
3. Find the right B2B referral program incentives
After identifying potential partners, it's time to determine your reward structure. The incentives you offer can significantly impact the motivation and willingness of your partners to refer others. The best B2B referral rewards are those that provide real value to your partners, and they can be either monetary or non-monetary in nature.
Monetary incentives are typically quantifiable and often take the form of commissions or discounts. Commission rates can vary widely depending on the industry, nature of the product or service, and the lifetime value of a new customer.
On average, B2B referral program commissions range anywhere between 5% to 25% of the initial sale, but it's essential to strike a balance that offers an enticing reward to the referrer without significantly eroding your profit margins.
For example, a cloud services provider could offer a discounted rate on their services or even credit towards future services for each successful referral. Similarly, a B2B SaaS company might offer a percentage of the initial contract value each time a referral converts to a paying customer. Alternatively, a flat rate per successful referral could be a simple, transparent incentive that's easy to understand and manage.
Non-monetary incentives aren't directly tied to cash but still hold significant value for your referral partners.
These might include:
- Exclusive content
- Expanded features
- Early access to new products
- Priority customer support
- Increased visibility through features on your platform or marketing channels
For instance, a marketing automation agency might offer their referral partners access to exclusive marketing content, free participation in premium webinars, or consulting hours with their experts. A software development company might grant early access to beta versions of new software or additional product licenses.
In the end, the most effective incentives will align with the interests and needs of your referral partners while also supporting the goals of your business. It's a delicate balancing act, but when done right, it can lead to a highly successful B2B referral program.
Impartner's automated referral payment process makes it easy to manage your deal registration process. Learn more below!
4. Learn how to ask for B2B referrals
Approaching customers or partners for referrals, or to be a part of your partner program, requires a balance of tact and clarity. Asking for referrals should also be a consistent, ongoing process rather than a one-off effort.
Once you've identified a few potential partners, explain your referral program to them. Highlight the benefits they can gain by participating, such as receiving discounts on future purchases, getting early access to new products, or earning exclusive content or rewards.
A personalized approach can also increase the chances of your request being positively received. For longstanding customers or partners, refer to the positive experiences they've had with your company and how those could be beneficial to others in their network.
Don't limit your referral requests to a single communication channel. Use a combination of email, phone calls, in-person meetings, or even social media to reach out to your potential referral partners. The choice of channel can depend on the nature of your relationship with the partner and their communication preferences.
Finally, whether a referral partner has made a successful referral or not, always express gratitude for their time and continued support of your business. This helps to maintain a positive relationship and keeps the door open for future referrals.
🔎 Discover more: Finding the right partners is a complex process, which is why we built a full guide on how to do so. Learn how to find channel partners to grow your ecosystem here!
5. Automate training and tracking for your partners
To enable your referral partners to more effectively promote your product or service, provide them with the necessary resources they'll need to sell your products. This could include training materials, marketing collateral like brochures and banners.
To track program success and incentives for your partners, it's crucial to set up an automated solution to create and track personalized referral links. With a referral program platform, like Impartner, you can save time, automate your key tasks, and drive greater partner engagement with:
- Personalized referral links: Each influencing B2B partner gets a unique link assigned to them which will lead to an automatically co-branded landing page you manage.
- Deep tracking: Any end user who arrives at the customized landing page and completes the lead generating form will be tracked based on the source link, giving credit to the right partner.
- Progress visibility: Leads information is synched into our partner relationship management system, generating a lead for you to follow up on, while also automatically tracking the referral for the partner.
Impartner gives you and your partners visibility into the progress of every deal, further driving partner co-selling and marketing at scale. Learn more about how Impartner can help you build your referral program.
6. Optimize your program based on data
Based on your setup of automation tools, you'll be able to establish a process for regularly tracking and analyzing the performance of your referral program. This will allow you to identify areas of improvement and adjust your strategies as necessary.
The most common key metrics to track include:
- The number of referrals
- Conversion rates
- Customer lifetime value (CLV) of referred customers
- Overall ROI of the program
Once you have this data as a starting point, you can dig in to find the types of partners who are driving the most value, and capture ways to improve your program strategy over time.
🔎 Discover more: Find even more tips and metrics to track your partner program success here!
It's time to build your B2B referral program
A B2B referral program can be a powerful tool to drive growth and increase your brand's reach and credibility. By leveraging the power of IRL and online word-of-mouth marketing, you can reach a wider audience, forge stronger relationships, and ultimately, boost sales.
With the right approach, the right partners, and the right tools, a referral program can become a game-changer for your business. From creating personalized referral links to tracking progress, Impartner offers an end-to-end solution for managing your B2B referral program.
From partner training and certifications to communications, referral tracking, and performance compliance, Impartner handles it all and more with best practices and automation built-in.
Need to build your B2B referral program? We’re ready when you are.