According to a recent survey by TOPO, it takes at least 18 touches to connect with a single buyer. With call back rates declining and consumers becoming increasingly wary of traditional sales tactics, it’s becoming more and more difficult for businesses to reach customers.
Thankfully, there’s one sure-fire way to effectively reach prospects and customers – personal referrals and introductions. From the top of the funnel to the bottom, personal referrals are the golden ticket to success in B2B sales.
1. Customer acquisition
Personal introductions are potent from a customer acquisition standpoint. When we hear about a company via a friend or a close connection, we are more likely to trust it as compared to other forms of advertising. This is why referrals convert at a 3-5x higher rate than average. We trust our close connections not to lead us astray.
2. Customer retention
Not only do referrals increase customer acquisition, they also increase retention rates. Personal referrals and introductions are, in essence, a form of precision targeting. Existing customers know their networks well and tend only to make referrals to those individuals they believe are best suited towards a particular offering. Referred customers are thus more likely to stay with a brand for a longer time. They boast a 37% higher retention rate compared to non-referred customers.
3. Customer value
What’s more, referred customers also contribute most positively to the bottom line. Referrals, because they’ve been vetted by current customers as a good match for a particular offering, tend to have higher levels of engagement. They also tend to be more likely to upsell. A study by the Wharton School of Business found that a referred customer has a 16% higher lifetime value than a non-referred customer. Referrals are a direct route to increased revenue.