By Andrew Brown
Purpose and Motivation
A “referral” is a “referral”, right? Not quite…and, you know it.
After all, you’ve seen some referral sources bring you and your business some great opportunities and others that well, to be frank, have been duds. But, how do you make sense of the solutions used to you establish, manage, measure, and optimize referrals?
To help you decide which, if any, is right for you (or right for you now), we’re going to explore the differences between solutions that aim to bring you customers who are consumers (i.e. B2C) and those bringing you customers that are businesses (i.e. B2B). And, as we outlined in the first article of this four-part series, we’re going to distinguish these two often confused approaches in bite-sized chunks.
To begin, here we’re going to focus on two key dimensions: the core purpose of these solutions and the primary motivations underlying referral activity.
The Core Purpose
B2C and B2B referral programs share a common goal: to increase sales. However, the focus of how that increase is achieved differs drastically. B2C referral programs look to grow sales by increasing “word of mouth” – that is, targeting the frequency and breadth of coverage that a product or service receives in online/offline conversations and publications.
In contrast, B2B referral programs focus on helping you achieve a sustainable increase in sales while shortening your sales cycle. This is achieved largely by eliminating the most expensive and time-consuming hurdle in your B2B sales efforts: the costs of building brand awareness and recognition.
The Primary Motivations for Referral Sources to Refer
B2C referral programs are built on referral sources having one over-riding motive to actively refer: receiving some sort of financial reward. That reward can be in the form of a fee, a credit, or a coupon. As a result, B2C program technologies build in rewards and/or gamification functionalities. The secondary motivation for referrals is assumed to be being recognized as an opinion leader or influencer (hence, the term “influencer” used to sell many B2C referral program technologies).
However, the motivations in B2B referral programs on the other hand are far more nuanced. These programs recognize that your referral sources are spurred into action in part due to their position and/or title within and organization(s) combined with personal motivations that extend beyond a formal organizational role. To make matters even more complicated, the motivations for your B2B referral sources to act evolve over time – reflecting their home, career, and life aspirations. The result: an effective referral program must acknowledge and address the unique motivations of each of your referral sources.
In part 3 of this series, we’ll continue to help you determine which referral-related offerings could be right for you by digging into other key dimensions of influencer marketing solutions.Specifically, we’ll delve into measures of success and referral readiness.
Andrew Z. Brown is author of the Amazon #1 best seller “how to” guide, “Get Referred: How to Increase Sales Velocity, Volume, and Value.” He is also President of Bridgemaker Referral Programs.
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