I’ve been thinking about referral marketing recently due to my own experience giving referrals to friends and family for Blue Apron, the meal kit delivery service. Clearly Blue Apron is using referral marketing to drive lead generation. But does this type of B2C referral marketing translate to B2B marketing?
The classic referral marketing program
Blue Apron’s is the classic referral marketing program where they encourage customers to get others to try the service via various incentives. Initially the incentive was the ability to give free meals worth $60 to my friends and family. More recently they upped the incentive to include savings for me if the person continued the service. Anyone connected to me on Facebook knows I’m a raving fan of the service, with or without the incentives, because I frequently post pictures of the awesome meals we make. So this got me thinking about how this type of program translates to the B2B world.
Referred leads are better leads
Of course for any referral program to work the company must be retaining customers and keeping them happy. So why bother at all with referral marketing? In the most recent Hubspot survey report, the State of Inbound 2017, respondents rated referrals as the highest quality leads. The report concluded this was likely because respondents thought these leads are more likely to convert. However, the report also acknowledged the challenge most organizations face scaling referral programs to get more leads into the sales funnel. Similarly, according to the Journal of Marketing, a referred customer has a 16% higher lifetime value than customers acquired through other methods. Intuitively this makes sense because we trust our professional peers who may recommend a company’s product or service via word of mouth, social media, or online review. The thing I wrestle with is how a B2B marketing team can make this a formal program for lead generation.