If we learnt one thing from our response to the pandemic, it was how important other people are to our wellbeing. It seems from the latest statistics that relationships for a healthy business are equally important ...
I've been reviewing these statistics in marketing and this backs up what we've always known. Being recommended and introduced to people who need or desire your services is the best way of growing your business, especially if you're offering business to business services. Here are some key statistics taken from three different sources that make the point.
Sagefrog, in their 14th Annual B2B Marketing Mix Report undertook a survey of B2B professionals servicing industries ranging from healthcare, technology, professional services and manufacturing.
They found that while digital marketing spend had increased over the pandemic (as might be expected in a lockdown), 65% said that referrals were still their top source of sales leads. It's interestingly their choice of reporting took this as a given as, to quote the report, "Personal touches are influential in gaining trust."
Hub Spot, from their survey Annual State of Marketing Report of 1,500 marketers puts social media marketing in their top spot. Referral marketing is well down in 6th place in their priorities for marketing.
This may be an artefact of the types of companies taking part, as it does not specify whether this is business to business or business to consumer. Social media is a great medium for selling volume and direct to the consumer by raising brand awareness.
The survey is also about the choice of where marketers spend their budgets rather than what the results tell us so evidence apparently wasn't part of this extensive survey. We might be witnessing everyone jumping on the bandwagon in their haste to follow the leader, in so far as "everyone else is increasing their social media presence so we'd better do so too!
Although the report clearly advocates for digital marketing, HubSpot does also explain the limitation of the approach which may go some way to explaining why the spend in social media is rising.
This approach appears to be something of a treadmill for the small business or consultancy and certainly those who are more successful use third party outsourcing to keep up the momentum. As David Fallarme of Hubspot explains, "It's a constant dynamic of re-invention".
As a marketer, you have to remember:
- Winning strategies have a lifespan
- Platform Dynamics change all the time
- There's always someone coming to copy you
"The only way to have lasting success is to keep up with the changes and master the channels that matter" says Fallarme.
Nestor Gilbert, writing in Finances Online, gives a very detailed account of the statistics drawn from differing sources that demonstrate the value of referrals. I'll quote a few pertinent to this discussion as I was particularly struck by the high rating for younger people influenced by friends rather than campaigns.
Nothing new about the power of peer pressure amongst the young, but also a clear sign for who they trust. Remember, these are going to increasingly be our buyers in the B2B world as well as consumer products:
- 82% of B2B sales leaders believe that referrals generate the best leads
- Leads from referrals have a 30% higher conversion rate than the leads generated from other marketing channels
- In terms of lifetime value, referral leads are also ahead by 16% compared to others
- Referred customers are 4 times more likely to refer your brand to others
- Referred customers have a 37% higher retention rate compared to other customers gained through other marketing channels
- As for millennials, 91% may buy a product if it has been recommended by a friend
- Furthermore, 28% of millennials will not try a product disliked by their friends
Social media, of course, plays a part in this dynamic as a support role. After all it's where the young and not so young hang out to build their relationship and share their knowledge. However, I would recommend to all those marketers that they consider lifting referral marketing up their rankings for their B2B customers.
Summing up what I drew from this dip into the wonderful world of marketing statistics, "Thus far, referral marketing remains invaluable to businesses, especially those that operate on digital platforms whether partially or fully. Referral marketing, however, is just part of the bigger picture of marketing."
More on other approaches to marketing your services another week.
If you'd like to learn more about referral marketing then do give me a call on 07970 638857 and let's have a chat and see how I can help you.