Referrals from happy customers are the Holy Grail of B2B marketing.
Customer referrals are more likely to turn into customers, be happy with your products and spend more over time. According to the American Marketing Association, word-of-mouth referrals are approximately 2.5 times more effective at acquiring customers than other forms of advertising.
So, what is the best way to generate more word-of-mouth referrals for your business?
- Offering direct incentives, such as gifts and discounts
- Inviting customers to join a VIP program where they can preview products, interact with employees and give the company direct feedback
- Giving customers public recognition, such as thanking them or sharing their content on social media
Incentives #1 motivator, but not sustainable
The study found that over half of the respondents would be at least somewhat more likely to give referrals if they were offered any of the above incentives.
Direct incentives were the strongest motivators. Almost 40% of the respondents said they’d be much more likely to give a referral if they were offered an incentive. Meanwhile, 42% of the respondents said an incentive would make them much more likely to write a review.
“When we ask vendors what programs work the best for them, direct incentives come out on top,” says Jay Ivey, Managing Editor, Software Advice. “Offering an incentive doesn’t require a lot of time or resources and can help you get a rush of reviews quickly.”
However, Jay also notes that relying solely on direct incentives won’t help you build an army of advocates for the long-term. “Incentives may motivate customers to do things for you, but it takes more than a free gift to make them true advocates for your brand.”
Social recognition motivates younger customers
As Generation Y starts to dominate the workforce, the motivations of your advocates may change. According to the survey, 44% of respondents between the ages of 18-34 would be much more likely to give a company they love a referral if they received recognition on social media. Meanwhile, only 16% of respondents over 55 are motivated by social recognition.
Jay recommends learning more about your customers’ social media habits. If they are active on social media, then responding to their posts and sharing their content might help you get more referrals and reviews. Help them build their personal brand while they help you build your business!
Use a combination of incentives to drive the most engagement
The survey found that direct incentives, customer engagement programs and social recognition all drive customer referrals and reviews.
“When we looked at demographics, we saw that different types of advocates (e.g., younger customers vs. older customers) respond to different incentives,” says Jay. “That’s why the most successful B2B advocacy programs use all three of these tactics.”
Jay suggests segmenting your advocates into groups and custom-tailoring incentives that will engage each group. You can even create advocate personas to help you learn more about your advocates and create attractive incentives.
Customer referrals and genuine reviews can help you attract more high-quality leads and turn them into customers. However, your recommendations must address all of your customers’ top concerns.