Do B2B Referral Programs Work?
Using a referral program in a B2B environment is much different than B2C referrals, since there’s typically a longer sales cycle and multiple stakeholders in the buying process. That makes it even more important for B2B companies to take advantage of referral programs. Two-thirds of sales professionals report that leads that come from customer referrals are the highest-quality leads they get, according to HubSpot. Research has also shown that referrals have higher conversion rates and a higher lifetime value than other leads.
READ MORE: Tips for Building a Successful B2B Referral Program
Trends show that B2B referrals have become only more valuable in recent years. Nearly half of B2B technology vendors say customer referrals were their most successful marketing tactic during the pandemic, Statista reports.
However, for a B2B referral program to work, the rewards must be worthwhile, whether you’re offering them only for the existing customer or for both the referrer and the referred. Here are some examples of popular choices for incentives.
- Physical gifts. Giving physical gifts, often branded with your logo, is one possible reward option. But it’s difficult to choose a gift that everyone will find useful and compelling, so it may not be appealing enough to work as an incentive to submit referrals. Also, shipping gifts can be time-consuming and expensive.
- Cash. Cash rewards can be an enticing incentive for B2B referrals, but they also aren’t very personalized and are hard to distribute. Even worse, if any mailing addresses are incorrect or rewards are lost in the mail, you end up wasting your budget and angering customers.
- Product upgrades. Another option is to offer a free upgrade to a premium or higher-level version of your product as a referral incentive. For instance, you can give away a one-year subscription. Hopefully, the customer will then continue paying for the paid version once their reward comes to an end. But this option makes sense only for certain businesses, plus you can offer only one reward for the first referral, so there’s no incentive to refer others.
- Discounts. If you can’t or don’t want to offer the full upgrade for free, discounts are another option for referral programs. But recipients typically prefer to get a reward instead of a discount, especially when the product is not something that is purchased very often, like a software license that’s renewed only once a year. An instant reward can be sent and enjoyed immediately.
- Charitable donations. Another referral reward option is a charitable donation. You can donate to a charity on the client’s behalf, but it’s even more personal if you use a rewards tool that lets them choose the organization they’d like to help. Offering a donation option boosts your brand image and helps you build up emotional connections with customers and leads. Donation rewards are also ideal for those who cannot receive a monetary reward or are uncomfortable with accepting one, such as government officials or doctors.
- Gift cards. Gift cards are an excellent choice for referral rewards because they’re flexible, affordable, and popular among recipients. There are lots of choices to pick from, so you can find options to suit your market. You can also choose different values to suit your needs, and they come in different currencies for overseas clients, too. Digital gift cards in particular give the freedom of choice to the recipient, and they are also easy to send, receive, and use.
BHN Rewards offers an impressive choice of gift cards that are perfect incentives for B2B referral programs. Check out our full catalog!
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