If you’re in marketing or sales you’ve probably heard of referral marketing, but do you understand it’s value? Referral marketing is defined as leveraging the power of different referral sources – like partners, customers and influencers – to target the potential buyers those sources have relationships with in order to drive sales of your products or services. Referral marketing is a powerful tool, and one of the top rated forms of marketing. It’s important to explore its benefits for your company.
Why Referral Marketing
We know from our data, that a referral channel can deliver a higher value when compared to the standard marketing and partner lead funnels. In fact, when there is sales involvement with a referral program, the conversion rate of referral partner leads shoots up to 41 percent, while the conversion of customer referral leads increases to 30 percent. You can compare that to the industry standard conversion rates for marketing (.78 percent) and partner leads (.48 percent), and see there is real value in companies having referral marketing programs. As Shopify points out, referral marketing is so powerful because people trust the opinions of those they have relationships with, “Trust goes a long way when it comes to convincing someone to buy something. If we don’t trust someone, we aren’t going to listen to them.”
Building Your Referral Program
The first step you should take when considering a new referral program, or when revamping an existing program, is identifying and analyzing your potential referral sources. A referral source can be anyone who interacts or has a relationship with your target audience. These sources can include existing partner channels, influencers and your own customers. Companies typically run several referral programs, with each program focused on the specialized needs of the referral source. Keeping your programs targeted helps you control the message your referral sources are using about your company – the way your partners market to their influencers is likely going to be different than the way your customers market to their friends and family. You can find helpful exercises to help you build a proper referral channel here.
Once you’ve identified your referral sources and have built structure around your programs, it’s important to look at how you will be running them. Companies have a variety of ways they run referral programs. Some create their own in-house systems, some manually track referrals in spreadsheets and many of the more successful companies use referral automation software offered by companies like Amplifinity. If you’re unsure if referral software is right for you, try this ROI calculator.
Key To Success
Referrals tend to generate a higher quality of lead when compared to traditional marketing methods, and once a referral becomes a customer, they are more likely to stick with the company. In fact, the Harvard Business Review states the lifetime value of a referred customer is 16 percent higher than that of non-referred customers. Referred customers also churn 18 percent less than non-referred customers. That’s why it’s important to properly incentivize your referral sources. Did you know the average partner reward amount is $182? According to our data, 76 percent of rewards fall between $101 and $1,000, and most are paid out through either check, gift card or ACH/international ACH. For tips on keeping your referral sources incentivized and active, read our blog Referral Strategy: How to keep referral sources engaged.
If you think Amplifinity’s referral automation software might be a right fit for your company, request a demo today.
Previously Mike Garrison, referral selling expert and President of Garrison Sales Consulting and Trisha Winter, CMO of Amplifinity discussed the CEO, sales and marketing’s part in building a referral culture. Now Mike and Trisha will dive into how every employee can be a part of driving a referral culture and how that can not only helps create a predictable referral selling system that grows revenue, but goes toward increasing employee satisfaction.
How to involve every employee in building a referral culture
Trisha: Hi, I’m Trisha Winter, CMO of Amplifinity. I’ve been interviewing Mike Garrison, business coach with referral sales expertise on the concepts of referral culture. So Mike, thanks for joining me again. We’ve talked about why a CEO needs to have building a referral culture on their radar to drive revenue growth. We’ve talked about what that means for sales and to marketing. And I think a lot of people would have stopped the conversation right there.
Mike: Not us.
Trisha: Not us. We’re going to dive into all the rest of the employees. So tell me Mike, who else needs to be involved in driving the referral culture at an organization?
Trisha: That’s scary.
Mike: I agree. But you guys have seen the presentation right?
Mike: So it’s everyone. And there’s a reason why. What scares CEOs, marketing and sales about getting all the employees involved is when there isn’t an explicit referral culture – when people don’t understand the principals and values. Amplifinity employees understands the culture, it’s all about your customers and referrals. But when you get down to it I would say that this is the CEO’s challenge, because your leadership is going to make it or break it. And employees, you’re either fulfilling one of two roles. You’re either client facing or a behind the scenes support. Both sets of those employees have a tremendous impact without having to be a sales person.
Trisha: Alright. Now let’s dive into that because I’m sure there are developers out there that are absolutely frightened by that statement. But first let’s talk about client facing employees. So what can they do to both build and live a referral culture?
Mike: Are ready? This is going to sound crazy. And I might get struck down with a lightning bolt flung by all the other referral experts. If you’re client facing but not in sales, don’t ask for referrals. Looks like the internet didn’t shut down from me saying that. Here the reason why. First off, it’s kind of risky. And I would think that if you’re in customer support and all of a sudden you were required to ask for a certain number of referrals that it would perhaps be not exactly why you entered into that business. But the reason why it is risky is that whenever you ask for a referral whether you’re in the mail room or you’re a hardened outside salesperson, you’re creating an expectation and obligation. This introduces risk. So I would say that if you’re not in sales don’t take risks. Instead have fun and show appreciation. So every single person, whether they talk to a customer or anyone on the phone should be saying, ‘I love referrals.’
Trisha: And that’s easy.
Mike: It’s easy and it’s not risky. You’re not saying, ‘I took care of this software bug for you now give me a referral.’ Well what would you do if they say yes? You would have to talk to somebody else anyways. While marketing can be training employees on the core messaging, they can just say something like, ‘Anything else I can do for you? No? Just remember, we love referrals. If we can ever help you let us know.’
That is easy, automatic and it makes a difference. And here’s why. One, customers don’t feel put on the spot to give, they just feel taken care of. And number two, the ones that will refer you will really like it.
Trisha: Absolutely. And I imagine those folks could certainly communicate with sales and let them know that they did something amazing and it went really well. And then that salesperson can think about if it is time to have a conversation with that customer about what they can do together to help grow business.
Mike: That’s brilliant! And if you’re in client success and you’re able to turn a difficult situation around, don’t waste that experience. Get with your sales and marketing department. That way you have double insurance to make sure that lead doesn’t drop. That lead needs to go in your CRM and put in your sales leader’s matrix for how you develop relationships. But if you don’t have that culture of showing appreciation and capturing it, that great experience is just wasted.
Trisha: Absolutely. And you know, as a salesperson if I knew that every single customer facing employee was talking about how much we love referrals that would be amazing. Really it is just setting that mindset and developing that relationship so it makes it so much easier for sales.
Mike: Every employee can put it on their signature. As a regular employee, go to your marketing department if you’re not encouraged to say you love referrals and ask if it is okay to say it. It would be kind of bold but if you’re thinking about moving up, the mindset of how to take ownership of revenue is important. It is not about touches anymore. Your company, your job thrives on sales results. Believe it or not even a new employee can take ownership of sales and revenue and play your part.
Trisha: Absolutely. And if I were a CEO that is exactly what I would key into because I’m sitting there telling every employee that they need to be a part of driving revenue and these employees don’t understand how. And it is so simple for them to do it.
Now, that is customer facing employees. Let’s talk about that developer we freaked out with the first statement that about them having a role in referrals. What can they do Mike?
Mike: That’s right. So, if you don’t actually want to talk to people you can still help. Cause I get it. I used to play World of Warcraft. I have a little introvert in me too. But think about social media. Everyone who has a smart phone has the ability to help market. So if you want to take ownership in revenue but you didn’t want to be in sales the good news is you don’t have to. There are way if you are willing, even once a week you can make little posts about your job and how you like it. Those things are invaluable. Because guess which people are trusted more? It isn’t marketing and sales.
When a receptionist talks about how they love the culture and love referrals people believe you more.
Trisha: Absolutely. It is more authentic. Now from a social media standpoint every single employee in the company has a network that sales can tap into and there can be some support there as sales starts to build their referral culture. But it sounds like what you’re also talking about is just laying the groundwork out there within their network about the value your company is bringing to your clients and beginning to share that information so that it makes referrals easier.
Mike: Yeah! So I’m going to take the responsibility off all those in sales and marketing, and then I’m going to give you an opportunity. So if your company doesn’t value the employee this is not going to work. Like if you don’t feel that the culture where you work supports referral and is really valuing people this isn’t going to work. Time to get a new job. But if you’re at a place you love working at, that you enjoy working at, that you feel like it is doing something important even if it is tough, then you can do a couple things. Number one, on your Facebook profile put where you work and if you can link it to your company Facebook page and then like the company page. One of the craziest things is when I start working with a company and then start noticing how many of the salespeople haven’t liked the company page. So if I were a CEO I would be looking into how many of my employees like the company page and actually have done a post with it. That would be a little leadership test. This isn’t something you can mandate. The other thing is if you’re really motivated and want to help I want you to go to the people who can make it easy and less risky for you. I want you to walk over to those marketing people and ask if there is a way they can help you authentically promote the company. And then if you’re at a true referral culture oriented company the sales department will have already talked to you and told you they love referrals. And maybe they might have even asked you if you can introduce them to someone that you know. Not everyone is in sales, but everybody is in referrals.
Trisha: Absolutely. And that is fantastic advice but that wraps back around to the CEO truly driving referral culture. And every single employee needs to see the results. They need to see how much business we are driving via referrals. How many referrals are coming in the door and how many are turning into actual revenue. That’s again all part of creating ownership of the revenue objective. And if referrals are a great way to achieve that revenue growth, which we all believe, to take on that revenue strategy, it’s taking it on holistically. It is not just saying we embrace our referral strategy. It is we walk and we own and we live a referral culture. That what drives us together to go after this revenue objective.
Mike: Yeah. When you really get down to it, a referral culture values other human beings. And that’s why all the employees have to be involved. Because if you want to step to the referral culture, every employee becomes extremely valuable. Not having to necessarily do as much activity as other employees but everyone has value.
Trisha: And who wouldn’t want to work for a company like that?
Mike: Exactly? I mean, HR do you want to improve retention? Then get on board with referral culture.
Trisha: Absolutely! Awesome! Well, let me attempt to wrap up here. So we talked about who needs to be involved in referral culture. It’s not just marketing or sales, it’s all employees. We kind of broke it into two buckets, customer facing employees and non-customer facing employees. For customer facing it is as simple as walking the walk and talking the talk and saying you love referrals. Just making that a part of your everyday conversations. And with non-customer facing employees, it’s the idea that you still have a lot of power to authentically drive the value through your networks in social media and support that culture. And then of course to be talking about it and measuring and sharing those results with the entire company.
Did I sum that up well?
Mike: Yep! Killer!
Trisha: Awesome! Any last words about referral culture?
Mike: You’ve got to give a crap.
Trisha: Absolutely. And if you do there is the way to grow revenue!
As discussed in part 2 of the interview series with Mike Garrison, referral selling expert and President of Garrison Sales Consulting, building a referral culture requires sales buy-in and alignment with marketing. Here Trisha Winter, CMO of Amplifinity and Mike, dive into how marketing can drive inbound referrals and enable sales to gather outbound referral to create a predictable referral selling system that grows revenue.
How enable referral culture to flourish within marketing
Trisha: Hi there, I’m Trisha Winter, CMO at Amplifinity and joining me today for another conversation about referral culture is Mike Garrison, business coach with referral sales expertise. Thank you for joining me Mike.
Mike: Happy to be here.
Trisha: So previously we talked about why referrals are important for a CEO as they’re thinking about growing revenue in their company and how to drive that down through the organization. Then we talked about sales and what’s important to sales in driving this, not just as a strategy but as a culture. Today I’d really like to discuss marketing in a lot more detail.
Mike: I love marketing.
Trisha: I do too. That’s why we get along, Mike.
Mike: That’s because we love referrals. And what is referrals?
Trisha: Yeah. Absolutely, it is a type of marketing. It’s a type of selling. It’s something that truly bridges between sales and marketing and that’s the beauty of it as we’re all trying to get better aligned. You know, smarketing is the term we throw out there.
Mike: Referrals are the world’s first and best form of marketing.
Mike: In fact I remember a couple of campaigns that are 2,000+ years old.
Trisha: (Laugh.) It’s the genesis of it all and we’re just coming back to it now in a smart way and it’s kind of because we’re forced to. Marketers are hitting a wall with the noise out there. We are trying to reach prospects. We’re trying to break through, but things that were successful a couple years ago aren’t and all of a sudden our conversion rates are going down a little bit. And you know we keep optimizing, we’re good at that in marketing. We get the data and tweak it, but it’s just not driving the revenue growth that the CEO is demanding, and that’s why marketers need to start thinking about how they can drive a referral strategy. This means changing their thinking in a referral culture. But tell me Mike, what do you think that this truly means that marketing needs to be doing?
Mike: I would say that if you’re a CMO, or just someone in the marketing department, welcome to the good news. Because here’s the deal, word-of-mouth marketing, contrary to all of the horrible referral training that 99% of the market puts out there, all of that stuff requires your expertise. When it comes to referrals, marketers, professionals, when you embrace this culture, knock down the fences and the walls, go out to lunch with the salespeople, together you have a complete referral culture. Because if there is one things you guys know how to do, it is how to measure, it is how to be responsible, it is how to predict and forecast. You guys know this stuff, you know it is not about personality. It is about messaging and communication. And when you understand that you’re going to get excited. So when think about it from a marketing standpoint, you guys are in charge, especially if you use Amplifinity or a software that helps you get those surprise referrals at the bottom that you can’t predict but you can if you harness the right technology (life referral software). See Trisha for more information on that.
But you guys understand that you can own inbound. Like the marketing department is going to own and run the inbound marketing for referrals. You guys are amazing. That’s going to have the salespeople love you. Those inbound aren’t leads, they’re referrals. Then, when you understand that you’re role in the outbound is no long just to push messages incessantly on social media and advertising, but instead to support the salespeople with your expertise. This is talking to a buyer that the only way to speak to is being referred. Salespeople are going to need all of marketing folks to help them move that customer from a status quo, meaning they’ve listened to you and talked to you because they were referred but don’t see why they should move further down the process. That is where the marketing department can come in with all of these great marketing materials. Suddenly all that you do is being designed to specifically address that target marketing, which you marketing people are experts at.
Trisha: And I think you keyed into an important word there, and that’s target buyer. Because you can’t do anything now a days in marketing. You can’t go out there and do a general lead generation campaign unless you’re specific on who it’s focused at. But I don’t think marketing always does a great job at communicating who those people are to sales. And they’re probably the most important people who need to understand who is a fit for your solution. And that is a key part of the referral. Because you don’t want introductions for the sake of introduction. You want introduction to the right people who fit and have the need for what you’re driving. Would you agree with that?
Mike: I would completely agree. It’s one of the thing we talk about in sales. It’s like the person in the mail room will be willing to meet with you and talk to you but they’re not signing any contract. And so as the salespeople in your organization start to get referrals to the right people they’re going to need to know what to say. They can’t just talk about product. They’re going to need research. They’re going to need articles. They’re going to need to be able to bring value to that prospect before the prospect wants to look at your product. Who’s better at helping with than marketing?
And that also leads me to this marketers, you need to understand the difference between people that can refer and people that will refer. And so take that targeted marketing that you guys know, and then work with your sales department to be able to identify which of the customers are going to actually be worth the extra investment of time to be able to develop as referral sources. In addition, when you start thinking about referral channels, such as channel partners, and you start thinking about outside referral sources, as your sales people develop these relationships are going to need to be able to tap into your expertise to able to develop customized material that will go through another company or salesperson to their customers. This is something sales reps know little about. And when you create a referral culture and your CEO is involved and they’ve got the vision; when your salespeople are involved and have taken marketing out to lunch to ask them for referrals and try and get to know them, then you guys as marketer become an invaluable asset. Here you get to do what you really know how to do best – analyze data, create customized messaging, solve communication problems, ensure that what can be automated is automated and done really well, and what is personal is preserved. The salespeople have got to have the time to do the human-to-human and they can’t do it without marketing. In fact, the entire sales effort for referrals falls apart if you don’t have an automated humanized system.
Trisha: Absolutely. A referral culture is based on the idea that there is a give-get. Many times you have an operational hassle that marketing is completely in the right position to take that hassle away from sales and really align with them. I wanted to dive in a little bit more to inbound versus outbound referrals. So tell me a little bit about those two types of referral and marketing’s role in that.
Mike: I also call it reactive and proactive. So reactive referrals happen when someone remembers you and your organization and tells someone about it. Which sounds like marketing to me.
Trisha: Absolutely. If we’ve done a good job at putting out information about it and enabling people to bring us that introduction then we could get that repetitive type of referral.
Mike: Especially if you use a really good piece of software. So within the marketing department the inbound is how you are building brand awareness. The inbound is how you are consistently helping salespeople and other people, not just employees but channel partners and channel marketers, but helping to place them in a position where these referrals can happen consistently and then over a period of time you will be able to predict it and understand what is necessary and effective. And you guys measure it. So inbound is just too hard for the sales department. They just can’t do it. Then there is the way sales complains, ‘Well we get all these leads but they don’t convert.’ But when your inbound is referrals that’s a different concept. We’re not talking about little catchy emails to people that have never heard of you. We’re talking about people saying, ‘Wow, that was an amazing Facebook video. How do I get a hold of them?’ Sound like something Amplifinity can help with?
Mike: And you guys are unique in the way that Amplifinity is the only company I know that values the sales rep explicitly. And marketing, as weird as that sounds, that’s your secret. When the sales rep feels that the inbound is personalized to them you are an asset. Outbound – proactive. This is what everyone has gotten messed up on. We’ve restricted outbound in so many ways to cold calling, to emailing, and I’m not saying those are bad. I’m just all about what’s most effective and nothing is more effective than a referral if you are proactive. The proactive side of marketing is you guys can help identify and help the salespeople identify as you build relationships and be very proactive and more effective with their outbound reaches to referral sources. And then, because of your ability to gather data and assess it, you could be a coach to the sales reps and sales leaders. Here marketing leads the inbound and coaches the outbound. This doesn’t mean you don’t create great messaging campaigns
Trisha: Yeah, and I definitely agree with that. I think fundamentally as a marketer if you can approach both inbound and outbound, putting them together in a holistic solution where again you can eliminate the hassle for sales you can gets true sales and marketing alignment. It really is the first approach of its kind. It really says, ‘Hey, I truly own a revenue objective now in marketing. I can see the direct impact that I’m driving both on driving inbound referrals as well as enabling outbound referrals.’ And truly share that with sales. And that’s the biggest mistake I see on the marketing side is that when marketing decides to do a referral program they try to do it in isolation from sales. It is a big mistake. It is not just that I think it is a mistake. We do an annual study of all the referrals program run on Amplifinity, both customer and partner programs, and the results show that programs that have sales involved and alignment and connection between marketing and sales are more successful. The conversion rate from referral lead to making a purchase is so much higher.
Mike: They can find that on your website by the way. And this isn’t concepts but actual data. And for marketers, this data does not decrease your value, it enhances it. And I think the future of compensation is going to include marketing and sales together.
Trisha: Absolutely. I think once marketing starts owning that marketing objective this will become a reality.
Mike: Welcome to your new Mercedes marketing.
Trisha: Com’on bonus plan!
Mike: You know, this new world, like social selling which every marketer has heard of, is referrals. It’s not something new. And believe it or not, marketers already completely understand this. You just have to shift your mind a little bit and once you do the sales department is going to call you to ask for help.
Trisha: Absolutely. So let me sum up a little bit of the fundamentals of what we’ve been talking about:
For marketing to truly embrace the referral culture there needs to be an alignment between sales and marketing.
Referrals are a channel. And you’re setting up a channel to drive inbound referrals and enable outbound referrals. Starting way back in the beginning you’re helping sales to be educated on who they want to get as a referral.
You need to drive and apply that expertise that marketing has built up in a different way to really enable these introductions and conversations versus just thinking about data and conversions.
We’ve talked about the referral culture top down. We’ve talked about how to build it in sales, and now how to build it in marketing. Next time let’s get together and talk about the common joe employee and what their role is.
Referral software has significantly grown in adoption by businesses in an effort to amplify the good results companies already receive from more manual referral campaigns and programs. Because of this, more data than ever before is available to see not only how businesses automating referral programs are going about engaging customers to refer, but how customers are using these programs and the success different referral methods provide business customer referral programs. By analyzing this data, companies can better understand how customers interact with referral programs to turn referral marketing into a science.
What type of referral methods are companies offering customers?
Out of the six referral methods, the inclusion of these methods are the following:
77.2% include lead form
72.7% include email
44.4% include verbal referral
50% include social media
40.9% include shareable URL
18.2% include print cards
Breaking down social media, it might be surprising to see that LinkedIn isn’t the most offered form of social media. Facebook, Twitter, and LinkedIn inclusion rate are as follows:
Facebook – 50.5%
Twitter – 27.3%
LinkedIn – 13.6%
You’ll also notice that not one method is included in all the customer referral programs in the study. To better understand what types of methods to offer try surveying customers to determine how they connect with their network.
Lastly, the best indicator of which referral methods to include is the effectiveness of those methods. Which methods are your customers using the most and which are the most successful? As you’ll see here, these two ways to judge effectiveness don’t always line up.
What referral methods are customers using the most?
It is plain to see that the methods customers use to refer is directly correlated with what referral methods a company offers. But looking at what method customers gravitate toward can still give you a great deal of insight. The following show what referral methods were most used by customers:
Social media – 29%
Email – 24%
Lead form – 23%
Verbal – 13%
Shareable URL – 12%
Print cards – <1%
It is impressive that social media is the most used even though it is only included in 50% of customer referral programs. Email and lead form follow shortly after, but their inclusion rate in the programs were more than 20% higher. This order of popularity could be based off the level of familiarity and comfort a customer has with the methods provided and also how easy the referral is to make. But one thing to remember is easy isn’t always better. The use of referral methods really isn’t a popularity contest . . . it’s a conversion contest.
What referral methods are converting referral leads?
When transitioning from looking at the most popular to the highest converting referral methods, only lead form, email and shareable URL come close to where they ranked in use. The following is the rate at which each referral method converted:
Verbal referral – 32%
Lead form – 19%
Email – 17%
Print Cards – 12%
Shareable URL – 4%
Social media – 1%
One point you’ll immediately notice is that while social media came in first in use, it came in last in generating new customers with only a 1% conversion rate.
The data points to top converting referral methods having a one-to-one relationship instead of a one to many. The discrepancy between the use of social media to refer and its conversion rate can be due to the fact that it is being used as a generalized blast in social networks as opposed to referring a specific peer that is in need of the product or service. While this is good to build awareness it won’t generate new customers.
To combat it, try training customers on how to refer one-to-one on social media or explain the best use of the referral program to them.
Start visualizing customers’ referral process and discover the science behind referrals:
How Salespeople can close leads faster with referral software
B2B salespeople don’t have it easy. Take the stress of survival and the monotonous repetition of a time loop from the movie, Edge of Tomorrow and you have a sense of a salesperson’s job. While salespeople can generally deal with the pressures their job entails, the lengthening of the sales pipeline has made it increasingly difficult. A great deal of effort is spent on finding a way to speed up the sales pipeline in an attempt to increase sales productivity and therefore revenue. But the simplest solution is to improve the quality of the leads entering the pipeline. Companies that have realized this are turning to referral software to scale collection of the fastest moving leads through the pipeline.
By itself, a referral comes in more qualified and so decreases the sales cycle as a result of:
The lead being handpicked by someone who knows your product and the value it can bring.
The prospective buyer coming to you from a trusted source makes them 400% more likely to buy, (Nielsen).
The salesperson knowing the person who made the referral which gives them the ability to call them up, learn more about the prospect and get a warm introduction.
Prospects who come in via a referral tend to bring less competitors into the buying cycle as they already trust that your solution is the best choice since it was recommended to them.
By adding referral software to the mix it increases the number of referral leads that come in and shortens the sales cycle further by automating incentives, nurturing, and attribution of the referral lead. It also provides advanced customer and partner insight, along with aligning sales and marketing in one program. The sales enablement that referral software facilitates syncs up marketing and sales data and allows sales to add precision to their sales strategies to organize leads by quality and pursue them. This gives Sales the tools to close more deals faster and reduce the sales pipeline.
But don’t just take my word for it. Below are ten stats and quotes that prove referral software speeds up the sales pipeline.
Prove referral software shortens the sales cycle with 8 stats/quotes
Companies that are “Optimizing the marketing/sales relationship grow revenue 32% faster than companies that do not. As a result the most competitive sales teams are enabled by marketing, and the most competitive marketing teams are completely in sync with sales.” (Aberdeen, In Marketing/Sales Alignment 2016: Who is Agile Enough to Win?)
Pipeline acceleration strategies benefit from quicker sales cycles. Advocacy can help improve overall productivity for the sales force, enabling a much more efficient sales selling environment and helping sales close more deals, which is what they want to do,” (Bob Peterson, Senior Research Director, SiriusDecisions, How to Climb to Smarketing Success).
By implementing technology that empowers a 360 degree customer view there was, “13.2% average year-over-year decrease in (improvement in) the average sales cycle time, vs. 1.0% and 1.9% respective increase in (worsening of) sales cycles for Industry Average and Laggard respondents.” (Velocify, How Best-in-Class Sales Teams Convert More Leads).
Partnership relationship/channel management technology users report a lead acceptance rate that increased by 3.6% year-over-year compared to a decrease of 0.1% by non-users decrease, (Aberdeen, Sales Effectiveness 2015: How in the world are we going to hit our number?).
“Customer advocacy can support demand generation by increasing the velocity of identified deals. Referral deals move faster through the pipeline,” (Bob Peterson, Senior Research Director, SiriusDecisions, How to Climb to Smarketing Success).
Partnership relationship/channel management technology users report reps achieving their quota increases by 3.3% year-over-year compared to 0.4% of non-users, (Aberdeen, Sales Effectiveness 2015: How in the world are we going to hit our number?).
Everyone understands that sales and marketing alignment (or smarketing) is a good thing. But the reality is that most organizations are a ways off from the VPs of Marketing and Sales being besties. I believe if organizations truly understand the value and have a clear path to get there, it will happen. Enter the 3 C’s of Smarketing: Communication, Coordination and Collaboration.
Communication: Start creating purposeful dialogue between sales and marketing
Marketing and sales have to communicate to get their jobs done. But to start to create optimal efficiency, more detailed communication needs to happen. Organizations need to have clear definitions of what sales is looking for in a lead so that marketing can create campaigns accordingly, which is an awesome first step toward solid alignment. If you don’t yet have this, invite your counterpart to lunch and start the discussion. Bring data to review why some leads were followed up on and others weren’t. Look at new customers that went through the pipeline the fastest and keep an eye out for commonalities.
Once you have a common understanding, get it all down in writing so you have agreed upon definitions. Then make sure you can track to these stages and measure conversions from lead to sales accepted (or Sales Qualified Lead – SQL). Ideally, you’ll also have a stage in between for Marketing Qualified Leads (MQL) so that marketing can scrub out anything that clearly doesn’t meet the qualifications of what sales wants before you send the leads over the wall.
Coordination: Continually optimize the outcome of sales and marketing efforts
Once you’ve got clear lead definitions, it’s time to create a feedback loop for continuous improvement. This means getting sales and marketing leadership together on a regular basis to review results and make changes in lead definitions or even campaign spend according to the feedback. Many organizations do this on a quarterly basis as “QBRs” or “Interlocks”.
No matter what fancy name you give to these meetings, make sure both departments understand the purpose and what they need to bring to the meeting. These meetings become worthless after 1-2 sessions if it is just marketing showing data and asking for feedback from sales. BOTH sides need to come with data and be prepared to explain what the data is saying.
Here’s how. Create some dashboard reports that both teams can access for the following data:
Highest and lowest performing campaigns for the quarter in terms of SQLs, Opps and Closed Won (6 different reports)
Highest and lowest performing inside sales reps (or telemarketers) for the quarter in terms of conversions to SQLs, Opps and Closed Won (6 different reports)
Both parties should analyze this data before the coordination meeting and come prepared with feedback from their teams on why they think those were the results. Having the analysis and team input take place before the meeting (from both sides) will make these meetings more successful. As you mature in this process, you may be able to set goals for conversion rates and use that as a bar to analyze what campaigns over or under performed.
Collaboration: Get significant revenue growth by working toward the same goal
So now that you have great communication and you are meeting regularly to obtain coordination, what more could you possibly achieve? The answer is collaboration. In this stage, the lines between marketing and sales start to intentionally get fuzzy. Marketing starts doing things that fall in the sales realm and sales starts getting involved in marketing programs, otherwise known as smarketing. With smarketing, the offices of the VPs of Sales and Marketing are next door to each other and they might even report to a centralized executive like a Chief Revenue Officer responsible for both marketing and sales.
While this may sound like a scary alternative dimension, when you start smarketing, it’s totally awesome! This stage means the end to the blaming as sales and marketing are truly working together to achieve the mutual goal of growing the company. Marketing bonus plans are on revenue, not leads. There is mutual respect, because these groups are in tight alignment.
So how can a company achieve this nirvana? It’s actually a lot easier than you might think. At the heart of smarketing collaboration is sales and marketing working together on a common program. This means designing the program together, promoting it together and tracking results together. This is the essence of smarketing.
The most effective program to achieve smarketing collaborative alignment is a referral marketing program. While sales already gets that referrals are their highest quality lead, most sales folks don’t ask often enough or have a “give-get” to offer. With help from marketing through a referral marketing program, sales can not only get more referrals, but turn referrals into their most productive lead source. In fact, data from customer referral marketing programs running on the Amplifinity referral platform shows an average conversion from lead to purchase of 13%, 10X over referral industry standard and 17X over marketing lead standard according to an Implisit study.
And when Amplifinity customer referral software enables sales to take an active role in the referral process, the average conversion rate rises to 30%. This is possible through referral software that enables collaboration between sales and marketing by integrating into the sales CRM to allow marketing to create the brand message for the program and sales to help execute on it. This permits marketing to extend its lead generation team to customers or partners who can connect your message to target buyers in their networks.
Bottom line – This scalable personalized lead generation works so well because it is backed by both marketing AND sales.
If you’d like to learn how to start a referral program that encourages sales and marketing collaboration, check out the page, referral software for Salesforce to maximize the value of Salesforce and create a highly charged revenue source.
Care to further the discussion? Tweet me @Trishawinter