Our friends over at Software Advice, an evaluation company for lead generation software buyers, shared some findings that we found very compelling. Thought we’d share!
Software Advice research uncovered some interesting findings regarding referral marketing:
From a survey of 200 B2B marketers (mostly senior-level),
- 88% of respondents use referral marketing software to facilitate demand generation efforts
- 60% of respondents receive a high volume of leads
- 54% of respondents cite referral marketing as having a low cost-per-lead
78% of marketers say referral marketing produces “good” or “excellent” leads
“When evaluating the quality of leads by channel, 78 percent of marketers singled out referral marketing (also known as “advocate marketing”) as producing “good” or “excellent” leads.
This is consistent with Gartner Research Director Hank Barnes’ claim that B2B buyers are increasingly turning to peers, professional communities and B2B review sites (such as Software Advice) to inform buying decisions.”
Gartner: Referral marketing ‘should be moving towards the top of the heap in terms of marketing investments’
“Notably, referral marketing did not place particularly high on the chart, despite how many marketers say it produces a high volume of good leads at a low cost-per-lead.
This supports Barnes’s claim that referral marketing has not traditionally been “at the top of the heap in terms of marketing investments,” but that “it should be moving towards that point.”
Check out the following graph, which shows lead quality and quantity:
“Referral marketing was cited as a channel that offered a high volume of excellent, low-cost leads—yet it fell in the middle of the pack in terms of planned future spending. As such, businesses that currently have a simplistic or limited process for nurturing brand advocates should consider investing in more sophisticated tactics, such as B2B loyalty campaigns.”
Our conclusion: Referral marketing is highly effective yet still underutilized
We’ve definitely seen and heard a lot more about referral marketing in the past year, with players like Shopify and ConversionXL writing lengthy blogposts about it. This is a great development– referral marketing works staggeringly well, for both retailers and consumers. But there’s still a long way to go before the customer referral takes its proper place at the helm of marketing itself.
That’s what we at ReferralCandy are helping to work towards.
Read the full Software Advice study here! B2B Demand Generation Benchmark IndustryView | 2014