Imagine: Your team has done great work for Joe. Whenever you are asked to provide a reference, you give them Joe’s number because you know Joe will gladly share his experience. Joe raves about you to everyone, all the time. How do you translate that into dollars? What is that worth? Well, it is definitely worth something. It is presumably worth an increase in my win ratio on the new business. Whereas you might have won one out of three jobs in the past, with Joe’s referral, you may win one out of two. You should attribute to Joe’s lifetime value some of the income from the next project you are going to win, thanks to his help. He is practically an outsourced member of your sales team, and best of all, HE pays YOU!
However, these opportunities to create value in your relationships only exist if you can retain existing clients. Nobody is a referral right out of the gate.
The Power of Word-of-Mouth Marketing
Positive comments from a peer or colleague are far more powerful than any marketing positioning, tag line, or brochure statement. The problem is that we cannot control word-of-mouth marketing.
Or can we?
We have spent over a decade researching how word of mouth affects B2B buyers, and the one constant predictor is the strength of the relationship that drives word of mouth. In a recent study of over 2,000 cross-industry high-value B2B buyers, we found the clients with whom you enjoy the strongest relationship— those that consider you to be their Trusted Advisor— say 150% more positive comments on what you are doing well or should continue to do than do your weakest relationships. Say 50% fewer negative comments regarding what you should change or do differently:
What does this mean, though? Positive comments are nice, but does word of mouth really translate into revenue? Yes! In that same study, we found that across multiple B2B industries, the average share of spending increases from 24% to 41% as relationship strength increases, with a 71% improvement in revenue just from building Trusted Advisor Relationships. Basically, loyalty matters.
How does each of your buyers describe you and your team? Whether they are raving fans, lukewarm, or outright antagonistic, the ball is in your court. You have the power to change the negative perceptions and strengthen the positive ones.
What quality do you think is most important in a referral relationship? Comment down below! After that, follow us on Linkedin at “Encompass-CX” for more blog posts and other updates.
Co-written by Alexis Audeh