Referrals: The marketing strategy all high-performers start with

The level of marketing maturity in B2B technology and consulting firms transcends two ends of an incredibly wide spectrum. At one end, you have high performers making a clear and tangible contribution to revenue growth. On the other hand, you have marketers running around like headless chickens, reacting to internal requests to perform the most basic of marketing functions - with zero impact on sales.  

If you would describe your own marketing activities as more reactive than high-performing, then it's likely because there is no clear strategy. It's really easy to see the signs. The marketing function will be constantly spinning wheels, jumping from one tactic to the next. There will be a high turnover of people, it will operate in a silo with limited involvement with sales and there will be an obvious frustration from above with the function as a whole.   

In high-performing marketing teams, it's almost the opposite. 

If you want to turn around an under-performing marketing function, it will typically require you to go back to basics. And a lot can be learned from firms who excel in marketing. Top-performing B2B tech and consulting firms all have one thing in common. Central to their marketing efforts will always be some form of strategic referral system, which maximises word-of-mouth and partnership opportunities to their fullest. 

Fundamentally, they don’t feel awkward about the referral concept and see it as a much broader, essential business strategy that reaches far beyond personal networks.

Referrals aren’t all accidental or solely from clients

Referrals are a funny thing. 75% of small to mid-sized B2B businesses claim over half of their new business comes from referrals, according to a survey conducted by author, John Jantsch. However, 70% of the same survey participants said they do absolutely nothing to encourage more referrals. 

This is backed up by Forbes, who state that only 3 in 10 B2B companies have a proactive referral programme in place. 

The problem is most people know referrals are the best source of sales-qualified opportunities, but have been conditioned to believe they can only happen by accident. The same people will likely conclude that referrals only come from existing customers too. 

Not the case. On both counts.  

There’s also a commonly-shared view that once you reach a certain size, you usually hit a wall, as word-of-mouth and referrals start to plateau. While this will certainly happen at some point, most people tell themselves they are at this stage way too early. 

If you are still taking a completely reactive and passive approach to referrals, then it’s clearly too soon to say you’ve plateaued.

Where do your best opportunities come from?

Referrals are especially critical for tech and consulting firms who ‘sell’ their expertise to solve complex client problems. These engagements are typically high profile, high risk and therefore of higher importance to the buyer. This means, as we’ll touch on later, that familiarity and trust are paramount and need to be built early in the sales process. Without a tier-one brand behind you, this can be hard to achieve with non-referral-based opportunities.

If you were to look at the source of each of your current sales-qualified opportunities, it would be a big surprise if less than half came from referral sources.  

So the obvious question is, if referrals are your best source of qualified opportunities, why isn’t your marketing function focused on systemising your referral process? Why instead are you carrying out other forms of marketing that won’t have the same level of impact on sales? 

If you don’t have a formal referral system, it’s probably for one of two reasons (or possibly both). You are uncomfortable with the idea of asking others to recommend your business, or you don’t know how to implement a modern referral programme that works.

How to kickstart the referral conversation

The ‘ask’ is often the biggest issue holding firms back. Asking a client for a referral out of the blue can feel a little like begging for business, so it’s awkward if done off-the-cuff. It is unlikely to yield great results if done randomly, unless your client knows of someone who needs your help there and then. But there are certain moments of truth when you’ll have the ideal opportunity to bring up the conversation, such as at the end of a successful project. 

But a strategic referral programme should focus on more targets than your personal network and existing clients. Strategic partnerships with other businesses that are not competing with you, but have the same target market should be a key part of your referral strategy.  

To kickstart the referral conversation, you need to take a more considered and personalised approach to each of your referral targets and focus on what’s in it for them. 

When developing your reasons to engage in a conversation, you should work off the basic premise of why people refer. Most of us do so because we know someone who needs help and we are confident enough to recommend the right solution. It feels good to make a referral, so any additional incentives should build on that emotion too.

Most importantly, when you have someone who’s agreed to refer you, there needs to be a systematic follow-up to ensure the initial conversation isn’t forgotten. Through more referral conversations and a consistent follow-up, you’ll start to see an increase in sales-qualified opportunities.