8 benchmarks for creating a successful customer referral program [Inforgraphic]

We always hear how customer referral programs have grown in implementation as a result of their undeniable ability to generate quality leads that convert to new customers. But even though referral programs might appear to be wildly successful compared to your different lead generation programs, finding out how it compares to other successful customer referral programs is often more telling. This useful insight helps to understand where extra attention needs to be paid in order to optimize for success.

The eight benchmarks mentioned here comes from the new data report, The State of Business Customer Referral Programs. These benchmarks are a result of millions of customer referrals made in business customer referral programs run on Amplifinity’s referral software.

What is the average activity that can be expected from a customer referral program?

Activity is a very important metric to understand. Customer referral activity is the foundation of a successful referral program. This is what the first benchmark is focused on.

1. During the course of a year, it was discovered that 36% of customer enrolled were actively referring.

This means that 64% were inactive. Why were they inactive? A lot can depend on when a customer was enrolled. If they were enrolled in a previous year, made a referral, but where not successful they are often deterred from referring again.

To overcome this try having sales or customer success reach out and engage inactive advocates to train them on how to refer and the right type of person to refer in order to keep them engaged in the referral program.

How many referrals can a customer be expected to generate?

Once the percentage of active customers is discovered, how are those customer behaving?

2. On average:

  • 61% of customers will make 1 referral
  • 34% of customers will make 2-10 referrals
  • 5% of customers will make 11+ referrals

To try an increase the number of referrals coming from customer advocates, provide a special offer or an increase in reward with each successful referral. Driving multiple referrals from a single advocate becomes even more important when looking at the next benchmark.

3. The data found that on average over a year period a customer produced 0.87 referral leads.

This means that if a customer referral program had 1,000 advocate they would produce 870 referral leads.

However, compare this to customers who previously referred a qualified referral lead.

4. These previously successful customers produced an average of 2.5 referral leads per year.

To drive more referral leads from previously successful customers, identify these customers and have sales reach out to thank them and encourage their productivity.

How many deals are generated from customer referrals?

Now getting to the main event – the conversion rate. The average referral lead to deal conversion rate from customer referral program run on the Amplifinity referral platform was 3x greater than the industry average of 3.64%, according to Salesforce’s Implisit.

5. The average conversion rate of referral leads that turned into customers from all programs was 13%.

While this conversion rate is spectacular, it becomes even more phenomenal when looking at customer referral programs that had sales involved.

6. Customer referral programs that had sales teams play a role in recruiting customers to become advocates as well as regularly asking for referrals had a 30% conversion rate.

This conversion rate has a 17 percentage point increase over the average. To help facilitate this try training sales on when and how to ask for referrals and break standard lead routing rules. This would allow the salesperson who ‘owns’ the customer to have their referral leads routed to them and incentivizes sales to form stronger relationships with customers to increase the quantity and quality of referrals.

How do the quality of referrals compare to the quantity?

So you now know that it is important to drive a higher quantity of referral leads. But the quantity of referral leads needs to be balanced with quality. For instance, a customer advocate could easily refer daily by sending a blast referral out to their social network. And while this could look great if you are just looking at quantity of referrals made, when aligned with the percentage that turned into deals you will be sorely disappointed.

7. In a year, the top 1% of customer advocates by volume of referrals, made 22% of overall referrals which only resulted in 1% of deals.

This falls extremely short of the average conversion of 13%, not to mention the 30% conversion of referrals when sales is involved.

But what about the top 10%?

8. The top 10% of customer advocates by volume of referrals, made 54% of referrals, which only resulted in 6% of deals.

Unfortunately, when an advocate just focuses on the quantity of referrals they often sacrifice quality. General social blast lose the one-to-one connection that make referrals so powerful.

Luckily there is a way to combat this. Try coaching enthusiastic customers on what makes a successful referral. They will appreciate the guidance and the reward that comes from referring more qualified leads.

Start visualizing customers referral results and discover how to manufacture successful referrals:

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How to measure against new customer referral program benchmarks

Impactful, strategy-changing customer engagement and referral program data just hit the market this past week. This data comes from the release of the new report, The State of Business Customer Referral Programs, and the webinar, Customers: Your most important source of demand, with Lisa Nakano, Service Director Customer Engagement Strategies at SiriusDecisions. In the webinar Lisa discussed how customers need to be leveraged to impact demand via advocacy and referrals.

Based on that claim, it is interesting to investigate how customer referral programs are performing this crucial task and the success rate of referrals by companies running customer referral programs. This includes:

What is the average customer referral activity a company can expect?

In the recent study done by Amplifinity based on millions of referrals made by business customers on the Amplifinity platform during the course of a year, it was determined that on average only 36% of customers are actively referring throughout the year.  On average this was 2,106 customers making referrals out of the average enrolled in the referral program, 5,850.

customer engagement, referrals, customer referrals

While the 36% may seem low, it is important to understand that this data is over the course of year, not the lifetime of the customer. That means that this percentage can also be attributed to how long customers have been enrolled in a program. Bottom line, there are a lot of willing customer advocates that need to be reengaged with to keep them active.

How high-quality are the leads that come from customer advocates?

Many times companies assume the easier the referral method, the more a customer advocate will engage within a referral program and the more new customers will be generated. This assumption isn’t necessarily true. Here is how the different types of referral methods rank in popularity.

Most Commonly Used Referral Methods

As the chart illustrated, social media is the most used referral method even though it is was discovered that only 50% of referral programs offer it in the study. However, a referral from social media converted from lead to new customer less than 1% of the time. While referring in social media can be easy, this study showed that for business customers, a broad social blast doesn’t work for referrals. This is most likely because these aren’t one-to-one direct referrals from a trusted source. Therefore, while this type of referral is good to build awareness, it loses its power to generate demand.

The importance of that one-to-one interaction is further expanded on by Lisa Nakano when analyzing ADP’s demand generation tactics.  In the webinar, Customers: Your most important source of demand, Lisa explains how many companies today have challenges with demand generation, because no matter how many times they email prospects or create targeted nurture campaigns their prospects only trusted what their peers tell them. To combat this Lisa told listeners ADP’s solution, “They [ADP] turned to Amplifinity as their partner and used referral marketing to bring in the positive word-of-mouth and activity to feed demand.”

Looking at the opposite spectrum from social media, the verbal referral method was only used 13% of the time but was the top source of conversion with 32% of referral leads converting to new customers. It also had a higher inclusion rate in customer referral programs, coming in at 54.4%.

Trisha Winter, CMO of Amplifinity predicts the continual rise of inclusion and use of verbal referrals, “Even though verbal referrals is fourth in overall use, this is a fast growing referral method thanks to new referral program technology introduced in 2016 that allows referrals to be captured from sales and customer success via Salesforce CRM. We predict verbal referrals will climb in adoption and usage in 2017.”

A large reason for verbal referrals having such a high conversion rate besides it being a one-to-one referral is that this method includes sales which increase conversions significantly. But more on that later.

What impacts referral program conversion rates?

The success of referrals has come a long way. Previous to the study done by Amplifinity, a B-to-B referral industry standard conversion rate of 3.63% was established by Salesforces’ Implisit. But the management and automation of a customer referral program has brought industry conversion rates to a whole new level. On average, customer referrals made on the Amplifinity referral platform had a 13% conversion rate.

This is over 3x the referral industry standard determined by the Implisit study. This drastic increase in the success of referrals can be attributed to establishing referrals as a channel for demand generation as opposed to an ad hoc campaign.  By automating programs to collect referrals at scale, companies are able to remove breakage and operational hassle so marketers can refocus their efforts on the promotion and optimization of the program.

Lisa Nakano commented on ADP’s referral conversion rate, saying “They [ADP] had some very nice results with this once they started understanding what they needed to do to activate their advocacy community. Referrals became their number one source of new demand. The conversion was amazing in terms of how quickly folks worked their way through the funnel and the percentage that converted.”

How does enabling referral selling change the referral conversion rate?

The Amplifinity report showed that enabling referral selling produced even better results. On average, a referral program that enabled sales to actively recruit new customers to the program, generate referrals from customers, qualify referrals through customers, and receive a facilitated introduction from customers more than doubled the average conversion rate. In fact, referral selling increased the average conversion rate by 17 percentage points, with a 30% average conversion rate.

This helps explain why verbal referrals were the highest converting method as it is a referral method enabled by sales.

The increase in conversions that referral selling delivers is a result of it being a further extension of the one-to-one referral. By enabling referral selling and breaking lead routing rules the trust that exists between the customer and their referral, and the customer and their salesperson can also be used to connect the customer advocate’s referral to their trusted salesperson. This way, any referral from the customer advocate will be automatically sent to that customer’s salesperson.

As an example of how the power referral sales enablement can contribute to demand generation, Trisha Winter pointed to ADP, saying, “ADP has stated they have higher customer satisfaction/NPS scores for customers who are advocates with them making referrals. Because they break lead routing rules, this naturally incentivizes sales to work on that relationship with that customer and have really great engagement.”

For more information on referral selling and another take on the Amplifinity data, read the article The Best Way to Ask Your Customers for Referrals, by Mike Garrison, an expert in training sales on how to increase ROI through referral selling,

How rewarding are referral incentives to customers?

There has always been much debate over incentivizing referrals. For the most part, everyone now understands that the effort a customer puts into making the referral and following up on the referral, whether that is by helping sales qualify them or making an introduction, needs to be compensated like any type of work. The question now is, what reward amount should be offered to customers that is enough to incentivize them but isn’t prohibitive to the ROI?

Looking at the data, reward payments for the customer programs ranged from $20 – $2,500. The data was analyzed based on actual reward payments since many programs have varying reward amounts by product purchased or offer a percentage of revenue.

Overall, the most popular and most successful reward was between $41 – $100. But you shouldn’t take this to mean that a reward amount of $41 will drive referral success. In fact, the vast majority of these rewards were $100. While the overall average reward amount for customer referral programs came in at $111.

While this data might mean to some that they can provide a lower reward amount and still get results, that isn’t quite the case. Rewards must be provided to customer advocates not only as compensation for the amount of work they put into the referral but also based on the cost they are asking their referrals to spend. As the cost for a referral to buy goes up, there is more often greater success with a revenue sharing system, like Lisa Nakano talks about ADP in the webinar. While the data may show the success rate as lower for rewards above $100, that can be attributed to the natural decrease in the conversion rate of any higher priced service or product.

For another take on this new referral reward data read, Successful Referral Programs Offer Escalating Incentives to Drive Customer Engagement, by Loyalty360.

Download the full report to see more data on business customer referral programs including:

  • All the referral methods from frequency of inclusion to conversion
  • The success of higher reward amounts
  • How many referrals you can expect from each customer over a year
  • The success rate of the top 1% of advocates
  • And more

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New Data Report on the State of Customer Referrals Hits the Market

A first of its kind report, this new annual customer referral program data report sets industry benchmarks for everything from referral behavior to referral methods to rewards and conversion rates with and without sales involvement.

referral software, customer referrals, referral conversion, referral program software

Amplifinity, a leader in referral program software, today announced the publication of a new data report on customer referral programs, The State of Business Customer Referral Programs – Annual Report.

The State of Business Customer Referral Programs – Annual Report is the first report of its kind to provide detailed insight into the success of customer referral programs. The data is aggregated from business customer referral programs run on the Amplifinity platform. A sister report on partner referral programs will be released in the coming weeks.

This first annual report sets an industry benchmark for customer referral behavior, how customers are making referrals and the corresponding conversion rates. Reward types, amount, and success were also analyzed as well as the impact of sales involvement in driving referral activity.

An interesting data point for the market is the average referral conversion rate from lead to deal of 13%. This is over 3X the industry referral average and 20x over the conversion of marketing leads which is 0.63% according to a study done by Salesforce’s Implisit.

But this didn’t shock Trisha Winter, CMO of Amplifinity, “I’m not surprised that customer referrals taking place on the Amplifinity platform resulted in a higher conversion rate than industry averages. Companies that have figured out that referrals are the best way to cut through the noise and reach target buyers come to Amplifinity to enable customers and partners to drive referrals as a channel versus an ad hoc campaign.”

Lisa Nakano, Service Director for Customer Engagement Strategies at SiriusDecisions commented, “Customer engagement is no longer just about fixing broken experiences or sending surveys. When leaders begin to think about customers as their most important resource and source of competitive advantage, they realize that old approaches won’t get them where they need to go. A more modern approach is to move customers beyond just saying they are likely to recommend you to acting on that sentiment via actual referral behavior.”

Lisa Nakano and Trisha Winter will discuss the data on a live webinar June 22nd at 10:00am ET.

Another promising data point was the impact of referral selling on the success of referrals, as it showed an increase from the overall average referral conversion rate of customer programs run on the Amplifinity platform to a 30% success rate.

“It was great to see the data confirming what the referral market has been alluding to for years, that the success of referrals is very dependent on the referral being one-to-one versus one-to-many,” says Winter. “Sales is in a key position to ask for those one-to-one referrals through methods like verbal referrals. This explains why verbal referral was the most successful referral method. This concept also can be linked to why social media was the most used referral method but the least successful according to the data.”

As the first annual report, Winter believes it will be used widely to help companies improve their referral approach. “I’m glad that Amplifinity can provide this benchmarking data. It will be interesting to see how other companies running referral programs align and respond to it.”

To get more insight, download the full analysis, The State of Business Customer Referral Programs – Annual Report.

referral program, customer referral program, referral software

Originally publish on PR Web.

8 Stats/Quotes that prove referral software speeds up your sales pipeline

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?).

Prove the value referral software can have on your sales pipeline. Try out the ROI calculator now to discover how referral software can dramatically increase your sales productivity and revenue.

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Originally published on Salesforce.com

SiriusDecisions Summit 2017: It’s all about ABM

Account Based Marketing (ABM) is no longer an emerging category. At the 2017 SiriusDecisions Summit it became clear that ABM is now a foundational part of how B-to-B companies go to market. It’s not just that every ABM session was packed to the gills, nor the existence of the many vendors who play a role in the ABM process. What really convinced me that ABM was here to stay was the new Demand Waterfall that SiriusDecisions rolled out.

Demand generation waterfall, siriusdecisions summit, ABM

There are two major changes that can directly be attributed to ABM. The first major change is the addition of two new layers at the top.

Stage 1 = Target Demand: This is your total addressable market. TAM is defined by filtering down to target account attributes which include industry, company size and buying center. Lots of data vendors now sport ABM messaging to help you identify this target.

Stage 2 = Active Demand: This is a further filtering of your TAM to determine buying intent. In fact, SiriusDecisions has a new category for vendors in this space called “Intent Marketing”. This is understanding the behavior of your targets relative to online researching or experiencing an event that would cause a need for your product or service. This further refines your TAM to who might be ready to buy.

Stage 3 = Engaged Demand: This is where the old Demand Waterfall began; with inquiries. But now there is a need to map these inquiries to who they are, what they are interested in and to a buying center within your Active Demand. All individual hand raisers for a buying center are mapped together.

The benefits of the new Demand Waterfall with ABM

The remainder of the waterfall hasn’t changed much, but the top three stages alone mean a fundamental pivot for many organizations. The benefits are easy to see if you can pull it off. With this model you’ll get:

  • More focused marketing spend and better marketing ROI.
  • Tighter alignment between sales and marketing.
  • Higher conversion from lead to opportunity because business development will have more than one lead to call on within an account to convert them into an opportunity.
  • More high quality pipeline with a higher close rate.

Outbound marketing and prospecting can no longer be a volume game. It just doesn’t work anymore. And the new Demand Unit Waterfall is clear evidence of this. In fact, SiriusDecisions has eliminated the term “lead” from their vocabulary. It isn’t about individual leads anymore. It is about engaging with target accounts (or demand units) and stimulating interest. And ABM is the process to help you do that.

Since many of our blog subscribers are running referral programs, you may wonder how this applies to you. The answer is that with an ABM strategy, your high quality referral leads will sky rocket. Why? If your salespeople have a list of target accounts and you are enabling your sales team to ask customers and partners for referrals, the ask just got much more specific.

Asking if that partner or customer has ties to a specific list of companies will result in triggering an extended thought process on the part of that advocate. You might hear “I don’t have ties to ACME, but I’m pretty sure that Joe used to work there. Let me introduce you and I’m sure Joe can direct you to the right person there.” That’s more personal than LinkedIn and faster too!

ABM is good for demand generation. Period. Whether you are focusing on inbound, outbound or referrals, your efforts just got much more focused. And that will improve your pipeline.

No matter what your marketing role, it’s time to embrace ABM!

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Why referral widgets fail to create long-term customer relationships

The referral-centric approach vs. the advocate-centric approach

Marketers and sales teams alike are focusing on finding new ways to break through the marketing noise. To accomplish this, business have discovered the importance of a relationship-focused sales approach that expands on customers good interactions by using an advocate-centric referral program as a primary strategy. But like any business practice there is more than one way to go about collecting referrals and recruiting advocates. The referral-centric approach (referral widgets) and the advocate-centric approach are two methods that prioritize different types of referral interactions.

The referral-centric approach emphasizes ease of use by having the program built around referral widgets to get a one-time referral from an essentially anonymous advocate. This approach is usually considered a fair option for an ecommerce company that wants to sell their products but doesn’t care who is buying them and are not interested in generating repeat referrals or sales from a customer.

The advocate-centric approach emphasizes the advocate experience and data from your advocate as the primary importance with a fully built referral program to support it. This approach is optimal for generating repeat referrals, building long term relationships, and increasing customer engagement and ROI.

In essence, a referral-centric approach vs. an advocate-centric approach is equivalent to the comparison between a one-night stand and a monogamous relationship. Both are a form of interaction but with different intentions and very different results.

With a one-night stand you gather hardly any information because you aren’t interested in having contact with the person again. Once you achieve your desired interaction you don’t try to continue building the relationship.

However, when you are trying to have a monogamous relationship, you get their contact information, learn their name, get to know their interests, and try to understand the person you’re interacting with in order to build a successful long-term relationship that continues to benefit both parties.

When trying to decide what approach blends with your business model consider the pros and cons of both methods.

The pros and cons of the referral and advocate-centric approaches

Referral-centric approach (referral widget)


  • Referral widgets can be placed on existing sites
  • Low barrier for advocates to register


  • No registration other than email address so no advocate data
  • No way to accumulate rewards
  • No way to encourage repeat referrals from advocates
  • Requires web developer to place the widget on sites
  • Requires IT to perform security reviews
  • Ad blockers block referral widgets

Advocate-centric approach (Full referral program)


  • Full profile of advocate data and program activity
  • Can utilize reward structures that encourage repeat referrals
  • Minimal IT needed
  • Holistic view of all referral activity available for advocates


  • Registration (1st time only) is an extra step (only if not using SSO)
  • Goes to a different page to make a referral

Unfortunately, while both approaches have their pros, the discrepancies of any relationship building capabilities in the referral-centric approach removes much of a referral program’s ability to positively influence the holistic experience of customers. In addition, it creates a barrier to implement a relationship-focused sales approach which is what the referral methodology is based on and what generates referral program’s unparalleled results.

Discover how an advocate-centric approach can impact your ROI. Calculate what your advocate-centric referral program ROI can be with an ROI Calculator.

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