How to build a B2B referral marketing program from scratch
By Laura Ojeda Melchor|5 min read|Updated Nov 13, 2024
A referral marketing program is centered on one core goal: getting your current customers to recommend your product to others.
In return, either:
The referrer receives a reward
The referred customer receives a reward, or
Both the referrer and the new customer receive a reward
A referral marketing program counts on two things. First, a customer's satisfaction with a product. Second, the existing trust between that customer and their friend or business connection.
When satisfied customers recommend your product to decision-makers who trust them, your company stands to benefit significantly.
For B2B companies, referral marketing is one of the least expensive and most profitable ways to win new customers.
Customer acquisition costs (CAC) for referred customers are typically lower than that of customers acquired through other means.
Businesses don’t have to spend as much time or money building awareness or nurturing cold leads, and instead can rely on existing customers to pre-qualify and nurture warm leads on their behalf.
Is B2B referral marketing a good fit for your business?
B2B referral marketing operates a little differently from a B2C referral campaign. .
Instead of causal recommendations between friends and family, B2B referrals carry greater weight.
This is because B2B typically has:
Longer sales cycles
Larger purchase values
More stringent due diligence processes
Industries with strong client-vendor relationships do well with referral marketing.
Think software, financial services, consulting, and manufacturing industries, for instance. These sectors thrive on trust and proven results, just like B2C relationships do.
But even B2B companies outside these sectors can see ROI from referral marketing campaigns.
The proof is in the numbers. Data from 2015 shows that B2B businesses with strong referral programs enjoy 87% sales effectiveness, compared with 42% for B2Bs without referral programs.
Plus, their sales pipelines are 67% effective, compared with 36% for companies without referral programs.
These higher conversion rates are likely due to the built-in credibility that comes with a recommendation from a trusted peer.
How to create a successful B2B referral marketing program
We'll guide you through the steps to get your B2B referral program up and running.
Step 1: Define your program goals
The first step is to clearly define your referral program’s goals and its target audience. Are you focused on driving new leads, increasing conversions, or deepening customer loyalty?
The clarity and focus you whittle down here will help shape your program’s design.
Step 2: Identify your target audience
Ask yourself this question: "Which customers are my company's best advocates?"
You probably want to avoid recruiting your newest customers. They haven't had a chance to build up a strong foundation of trust in your brand yet.
Plus, it can feel too pushy to ask brand-new clients to advocate for you before you've delivered the full benefits of the services or products they've purchased.
Instead, look at the loyal customers who've seen measurable success with your product.
Focus on customers who have left glowing public reviews, given positive feedback, or continued to purchase your product or service for months or years.
When you focus on high-quality referrals, you improve your chances of getting qualified leads.
Step 3: Choose the right rewards
Choosing the right incentives is essential to the success of your program. In B2B, rewards can range from monetary rewards, account credits, or gift cards.
Consider giving incentives to both parties: the referrer and the new customer. For instance, Gusto, a payroll and HR platform, offers a double-sided incentive.
The referrer receives a $300 Visa gift card, and the referred business gets a $100 Visa gift card upon signing up and running their first payroll.
Deciding which incentive makes the most sense for your customers and your business depends on a number of different factors: if your product is expensive but has high profit margins, a limited-time discount may make sense.
If customer lifetime value (LTV) is especially high, it may make sense to include a high-denomination reward as part of your referral program, like Gusto.
Look into which incentives similar companies offer as part of their referral programs for benchmarks on incentive amounts and incentive types that make sense for analagous company profiles in your industry.
Step 4: Create a friction-free referral process
Nothing's less motivating to referrers than a complicated referral process.
To keep engagement high, make signup as simple as possible. For example, Google Workspace’s referral program is user-friendly and attractive because it offers cash rewards.
It takes three quick steps:
Fill out a quick, 1-page form and get a referral link
Share the link with your network
Get cash rewards for each successful signup—anywhere from $8 to $23 per signup, depending on the plan they choose
Make sure your process requires minimal steps and allows referrers to track their impact. The fewer barriers, the more likely your customers will actually participate.
Step 5: Promote the referral program both internally and externally
Once your program is in place, you need to effectively communicate the program to employees, existing customers, and prospects.
Encourage employees to spread the word to clients. Externally, use email, social media, and customer touchpoints to increase awareness of your program.
One of the easiest ways to get customers excited is to post exactly how much your referrers can earn for their efforts.
On Google Workspace's referral program landing page, you can see that each referral earns you the following:
USD $8 per user for Business Starter signups
USD $15 per user for Business Standard signups
USD $23 per user Business Plus signups
You can earn rewards for up to 100 users per plan signup. So, if you get a Business Plus client with 25 users on the account, that’s a $575 reward.
The program caps out at 200 total users per year. This gives referrers plenty of opportunities to earn while making sure there are reasonable limits on Google’s end.
B2B referral marketing examples
To give you a better sense of what B2B referral marketing programs can look like, here are a few of our favorites.
MainStreet Financial Planning’s Client Referral Program. Clients get a $25 TisBest gift card to donate to a charity if their referral becomes a client.
Salesforce's Consulting Partner Program. Partners who refer qualified leads through the Partner Community get financial rewards. Referrals must meet specific criteria and convert to closed sales opportunities. Payment is issued if the partner is in good standing, with eligibility depending on country and partner tier.
PayPal Developer Referral Program. U.S. and Canadian developers can earn $500 to $2,500 per merchant referral that meets transaction volume thresholds within 60 days. To participate, developers need a PayPal Business account and must agree to program terms. Commissions are paid quarterly.
Poke around on the web for examples that directly relate to your business, and use them as inspiration when making your own B2B referral marketing program.
Key takeaways
B2B referral programs can drive profits without spending too much of your time, effort, and budget. Keep these key tips in mind as you go forward:
Programs should have a straightforward referral process that makes it easy for users to participate
Target the program toward clients or partners most likely to refer qualified leads
Choose rewards that align with what participants value.
Tremendous supports flexible reward options, which means your company can offer digital rewards that appeal to different audiences. From gift cards to charitable donations to monetary rewards, we can do it all. Our seamless integrations with CRM and marketing platforms make it easy to keep track of referrals and rewards distributions.
Book a demo today to see how we can help make your B2B referral program a success.
Updated November 13, 2024
