Did you know that over 80% of B2B decision makers start the decision-making process with a referral? The fact is, leads that come from referrals convert faster, have
The fact is, leads that come from referrals convert faster, have low cost of acquisition, and have higher customer lifetime values than any other leads.
But when is the right time to add a formalized referral marketing program to your sales and marketing process?
In this short video, I outline when to start thinking about referrals and the keys to building a successful referral marketing program.
First, you need to have an awesome product. This probably means you’ve reached product-market-fit. So, what does product-market-fit look like?
“Product market fit means being in a great market with a product that satisfies that market” — Andreessen Horowitz
If you’re a B2B SaaS company, product market fit will be when your bank your customer base is growing and you’re having to hire a lot of new employees. You’ll see a pretty low churn rate and you’ll also be getting a growth through word-of-mouth already. The problem is, you don’t have a way to track the impact of all that word of mouth. You probably have a manual system using Salesforce or some other CRM.
Without the right data and automation, you’re losing revenue and insights into how to scale your best channel, referral marketing.
You’ll need the right software that allows you to track your referral program’s performance and you’ll need to start thinking about the best rewards to incentivize your customers to refer their friends. The best rewards that we’ve seen at ActionWins align the rewards structure with your companies pricing model and with usage of your products.
What if I haven’t found product market fit?
If you don’t feel like you have product market fit but think referrals could still be a great way to get more customers, then I suggest running some quick experiments before integrating a referral marketing software with your product. Try sending a targeted email to your existing customers and offer them an incentive to refer their friends. Measure the conversion rate from referral to new customer. If you get a good number of referrals, then you can start thinking about a more integrated formal process. I always like to look for the fastest and cheapest way to test a channel before diving in.
If you’re a SaaS company and looking to drive customer and revenue growth, feel free to reach out to me. I’m happy to review your sales funnel for free and help however I can.