• by Jack Loechner , Staff Writer @mp_research, December 10, 2015

Many intuitively believe that referrals are the best leads to generate new business more efficiently, but what impact do formal referral programs have on sales pipeline growth and revenue acceleration for B2B organizations? Intuitive, with HeinzMarketing, surveyed B2B professionals from across North America, including sales, marketing, operations and executive leadership to help answer that question.

According to the study, referral programs make sales and marketing efforts more effective: More than half of those with formalized referral programs ranked their sales efforts as highly effective, compared to only 35% of those without referral programs in place. Another 51% of companies with referral programs rated their effectiveness at maintaining sales pipelines as very effective vs. just 32% of those without referral programs. 

For companies with referral programs:

• 70%+ are on pace to meet or exceed their 2015 revenue goals
• 50%+ ranked their sales efforts as highly effective, compared to only 35% of those without referral programs in place
• 51% rated their effectiveness at maintaining sales pipelines as very effective vs. just 32% of those without referral programs

Referral programs generate more revenue, says the report. Although only one in three B2B organizations have a formalized referral program today, those that do enjoy significantly higher sales, lower acquisition costs and far better relationships between the sales and marketing organizations. 

Including professionals from the front lines to the C-suite, the research uncovered striking findings about the impact of referral leads on the sales pipeline and revenue growth. Referrals close faster, at a higher rate, and with greater lifetime value than other types of leads, says the report.

This study found that the most successful organizations:

• Have a formal referral program in place
• Have referral programs managed primarily by marketing
• Use tools or software designed specifically for referrals

Formal referral programs driven by marketing are key to:

• Greater lead volume
• Lower marketing costs
• Better sales forecasts
• Letting salespeople focus on what they do best: sell

For companies with referral programs:

• 69% report faster time to close
• Twice the increase in referral lead volume over 12 months
• 22% of respondents use some type of tool or system to increase referral leads
• 59% report higher lifetime value
• 71% report higher conversion rates

Keys To Higher Performance (Less than one quarter of companies have these in place!)

• If Marketing manages the program, the company is 3X more likely to achieve 2015 revenue goals
• If Formal tools are in place, the company is 3X more likely to accelerate creation and conversion

Concluding, the report suggests that these findings provide specific, actionable tactics for an organization to begin increasing volume, velocity and conversion of referrals in the business:

• Community: Do your customers exist together only on a spreadsheet, or do you foster an environment in which they can learn from each other, interact, and make the coordination of “asks” and referrals easier?
• Customer channels: Most referral “programs” rely solely on random acts of email. What broader, multi-media channels can you leverage to engage your customers?
• Content: Surround your customers with value-added content, and get them involved in creating interactive content for and with you
• Context: Find significant points of particular interest along the customer journey, and be specific about the people in your customers’ network from whom you want a referral
• Collaboration: Though the most effective referral programs in this survey were managed by marketing, it is a complete, integrated process and partnership between sales and marketing that works the best
• Infrastructure: Put tools and process in place to make referrals more consistent and easier to manage, as well as faster/easier to distribute among the appropriate sales resources for follow up 

For additional information from Heinz Marketing, please visit here.