Most advisory councils and analysts covering the referral marketing industry focus primarily on how the channel performs in a B2B context. Until now, we haven’t come across any B2C-specific third-party analysis detailing the conversion impact of referral versus other types of marketing channels.
In 2014, Audience Audit was commissioned to conduct small business trend research, through surveys and interviews, from 408 of its client’s customers and 429 external panel participants. In total, the respondent group consisted of 78% entrepreneurs operating on a B2C model. The survey asked questions about career motivations and challenges for small business owners. In the most recently released 2015 report, Audience Audit reveals additional insights from the same respondent group in how these small business owners face challenges specifically related to sales and marketing.
Business owners shared that they focus heavily on marketing strategies that generate tangible results. Referrals were cited by 62% of respondents as one of the three most effective marketing strategies.
This analysis falls in line with studies conducted in the B2B space on how referral is the best converting marketing channel. Last year, Implisit, a company that keeps prospect and customer data updated in your CRM, analyzed hundreds of clients’ pipeline to determine referral is the best converting channel. BrightLocal, a creator of SEO tools for small businesses, surveyed 700 customers to determine referral is the most effective at bringing in new leads and customers.
Recently, we published two case studies highlighting B2C customer successes. Plastc Card launched a pre-order campaign that generated $5.2 million in sales during the first week. Referrals represented 37% of total revenue, and that figure continues through today. Pura Vida Bracelets attributes 12% of weekly sales revenue to referral marketing.
Thus far, third-party B2C referral marketing analysis has been presented through surveys and interviews. We have yet to read a comprehensive study on actual conversion rate performance for B2C marketing channels, which includes referral. However, whether reviewing the small business B2C survey results, scanning conversion rate analysis conducted for the benefit of B2B companies, or reading our client’s success stories, one can easily infer that referral marketing works well for business models of all shapes and sizes. No matter the company, customers will advocate for your brand if you delight them properly.
At Talkable, we’re just starting to develop our voice in the referral marketing space. Empowered by the confidence that our clients express when using our platform, we’re innately curious on how to share the value of referral with prospects and current customers. We’re interested in supporting third-party research to understand B2C conversion rates of referral versus other marketing channels.
As we identify new sources and publish our own analysis, we’ll post findings here. Subscribe to our blog and stay tuned for the latest on referral marketing.