B2B sales are taking longer to land, the reason for this is the sales are complete and bespoke with many decision-makers involved or influencing the decision. If there was a way to shorten the sales cycle would you be interested?
The relationship of buying and selling is based on trust! If you want to accelerate the trust quotient, then get referred.
“According to Digital Intelligence Today tells us that consumers are 92% more likely to trust recommendations by people they know.”
2014 B2B Buyer Behaviour Survey conducted by Demand Gen Report found 72% of respondents turned to peers for relevant content when researching B2B purchasing decisions.
The value of a customer is not in the initial sale which may only cover the acquisition cost, but it is in the longer term repetition of purchases when the acquisition cost reduces to the cost of maintaining the relationship or sales enablement investment cost. The longer term relationship is measured in the lifetime value (LTV).
The longer a customer continues to purchase from your company, the higher their lifetime value becomes. Customer support representatives and customer success managers, all play vital roles in solving customer problems and offering recommendations that enable customers sales and enhance loyalty. Learn more about calculating LTV.
Even the lifetime value of a customer does not include their ability to influence other buyers outside of their company to buy.
In the Harvard Business Review article: The One Number You Need to Grow, Fred Reichheld wrote: “the value of any one customer does not reside only in what that person buys, but in what they are prepared to tell others about you can influence your revenues and profits just as much.”
True LTV must include a measure of your customers’ referral power or referral value. According to Reichheld, the referral rate is positively related to a company’s profit growth.
A study by Matt Heinz, he found that:
- 60% of companies with a referral process experienced faster close rates
- 59% report higher customer lifetime value, and
- 71% report higher conversion from contact to a customer.
In addition to this, research conducted at Wharton School of Business found that the time it takes a referred customer to leave a company is 18% slower than the average.
If you do not have a solid referral strategy, you are leaving high potential revenue on the table. Given that 92% of your customers trust peer recommendations and the ROI of a referral is significant because it reduces the purchase cycle and sales acquisition cost it seems negligent not to invest in a referral strategy. Referrals are said to be one of the most powerful forms of marketing for the least investment.
The 3 Must-Have Prerequisite of the Scale Your Sales Referral System
- Create exceptional customer experiences at all touchpoints in the customer journey.
It does not matter if you are looking to secure new customers, referrals or maintain existing relationships, you must have an exceptional customer experience, that all your customers benefit for extraordinary moments from inception to payment and service. Identify your most valued customers
- Identify your most valuable customer accounts
Scale Your Sales Productivity Model, priority and Profile modules, focuses explicitly on segmenting customers to profile and select your most valued customers, the top 20% that deliver the 80% of value. These are the customers that fit a criterion that you what to grow in number, order value and volume and perfect for your referral programme.
- Find the specific unmet customer requirement
Scale Your Sales Productivity Model, Profile and promise modules, take your most valued segment of customer accounts and deep-dive the level of customer preferences and specific character, wants and needs. The better you understand the personalities within your customer account, the better you can service their unmet requirements.
8 Steps to Create Your Scale Your Sales Referral System:
- Priorities your most valued customers with the relationship quotient, this is the measure you give to the value of the relationship you have within the customer company.
- Identify your existing customers who meet the referral profile. Assess which of these individuals are most likely to refer and which have an engaged and relevant relationship network and the ability to add value but currently lack the relationship with your supply company.
- Customers that came through recommendation are more likely to continue to refer. Interview the referred customer to discover how the recommendation came about and what actions secured and relationship.
- Identify if there is a circle or individual with significant influence on the decision-makers or the purchase. Is there an influencer you have neglected or that you need to build a relationship?
- The Net Promoter Score Questions are great ways of assessing your current most valued customers propensity to refer on. ‘How likely is it that you would recommend this company to your friends and acquaintances?’
- Develop a referral system of relevant strategies around the specific needs of the customer accounts and individual preferences.
- Track and monitor the progress of your referral strategies and solicit regular feedback.
- Keep influencers and referees as partners in the referral process with regular updates and thank you.
Do not skip on the prerequisite if you want a referral system that keeps on delivering long-term results. If you have highly engaged customer relationships with your most valued customers and an exceptional customer experience and apply the Scale Your Sales Referral System, then your lifetime value and revenues are set to accelerate.
Take a look at the Scale Your Sales programme and download the FREE report 21 Reasons Your Strategic Account Sales Don’t Scale in the footer below.