Referral programs — I am starting to see them more and more, and I am really intrigued by the concept of incentivizing a person outside of your company to essentially sell your product/services and generate qualified leads for your business.
Take RueLaLa for example, a B2C internet retailer. Their referral program states that if any members refer their friends to the site, and the friend buys something for the first time, the referrer receives a $10 credit. You better believe that I sent the link to my friends and family (18 new leads for RueLaLa to be exact), and have enjoyed the benefits of the credit incentive. RueLaLa – they’ve enjoyed the benefits of my referrals perhaps even more than me. I referred my fashionable aunt last fall, and let me tell you, she buys about $300/a month from the site. It’s a win win for everyone, except for maybe my uncle when he sees his bank statement.
Another example: a local Boston spa that I recently visited has an outstanding referral program. For every person you refer to the business who books (and attends) an appointment, the referrer gets a $50 credit. Again, I’ve reached out to dozens of people to refer to this business, and I’ve received hundreds of dollars in credit with this spa. I’ve joked with my boss, Managing Director at OpenView Venture Partners, Brian Zimmerman, saying that I could be this spa’s new VP of Sales in a heartbeat.
That being said, my big question of the week is — can B2B technology companies enjoy the same success as B2C companies with these great referral programs?
My guess is yes, but I’d love to hear from my followers with some specific examples. Referral programs with great incentives tap into some sort of human instinct:’what can I get out of this’?…it’s pure genius. Get your customers to promote your business and give them a very small cut for a closed deal they generate. That small cut will be worth it in the long run if you consider the lifetime value of your customer.
I’m hoping that the data from the survey will provide some interesting referral program ideas for our expansion stage portfolio companies who are all aiming to scale their business by executing innovative lead generation strategies.
Here is the link to the Survey:
I will share the results next week. The most innovative incentive program concept left in the survey will win a $25 visa giftcard!