Not Tracking Referrals? You're Leaving Money on the Table!

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Hello, everyone, and welcome back to another episode of the Account Experience podcast. And today we're continuing our mini series on B2B benchmarks. And this week we cover one of my favorite topics, referrals.

In this episode, we dive deep on.

How companies are utilizing or not utilizing referrals in their experience programs. And the numbers, quite frankly, are shocking. So without further ado, let's dive on in.

I'm here as always with my co host, Kerry T. Self. Say hello, Kerry.

Hello, everyone.

And today, guys, we're going to keep going on this benchmark series. So we got a lot of great feedback from all of you. You're really digging the benchmarks. So we're going to with these micro bits of benchmarks. And today we have a really interesting one. So the question we asked roughly a thousand respondents, do you track referrals as a result of your experience program? And when we kick this out, we have expectations, right, because we preach this stuff often and saying how you need to tie revenue to your experience data. And a big part of that is referrals. And let me just walk you guys through the stats here. So again, do you track referrals as a result of Your Experience program? 62% responded say they do not track referrals at all as a result of their experience program. That is a crazy stat that blew our minds. And so we have to talk about it today. Kerry, what are your thoughts, my man?

We end the podcast right here and we go out there and bang a drum. Yeah, like you, I think we were all kind of shocked. You know, not only do we preach and teach, but we live this and we know this, you know. So let's think of it this way. You're running a company and all of our missions as company owners or people, part of organizations, is to grow the business. I've yet to hear a company that says, no, no, no, our goal is to maintain right where we're at for our whole lives or a slow decline is what we're targeting. Right. It's about growth. And retention is great. I'm not here to say it's not a bad thing, but retention is only going to give you 5 or 10, maybe 15%. If you're running a phenomenal, phenomenal program, you might get 10%, 15% growth out of it. New business is good too. Don't, don't get. That's great too. You're going to bring in some business from there. But where companies really take off from and what we build all this on is the referral and we'll talk a little bit. Why. But people recommending your business to other people without us saying anything else should be the single biggest, most important focus of how to grow your business. And not just grow it, but grow it probably quickly and with probably the biggest upswing, if you can. And the fact that 62% of the people that filled this out said they don't even track it at all.

Yeah, it's crazy. I mean, especially looking through our lens. So again, we'll share this stat. And I've shared it in a previous episode. I believe anywhere between 20 and 40% of our new business every single month comes as a result of a referral from an existing customer or an existing promoter. That, again, you guys want to grow faster. I mean, could you imagine. And this is organic, right? Like, we're not paying money to get these. We're surveying as we preach and we're getting a promoter response, you know, nine or a 10. And all we're doing is simply saying, hey, you said you would recommend us. Do you have anybody in mind? And it's really that simple. But. And you can, you can add a process into this experience program to capture these systematically and process them and great. That's probably step like 10. Step one is just follow up, like close the loop with them. Say, hey, you're a promoter. Have anybody in mind? It takes two seconds via email. And if you're scaling it out over a thousand data points, yeah, you're right, it might take a little bit longer. But at the same time, 40% of our new business is as a result of a referral. Not only that, and this is the thing that really gets me as a marketer. I look at a ton of data. Marketing is obviously very data heavy these days. And the one thing that jumps out at me about these referral segments or these referral customers is that they close faster. So they're about half the time to close. They close for more money, on average, roughly 50% more. And they convert higher. And they convert higher. Like almost twice. No, it was three times higher than any other source. Inbound, outbound, whatever it is, three times higher.

So only the only asterisk I'll put on there, Ian, though, they expect more from you, though they do. That is I need to at least say that you're running a risk here. And maybe I'm going to get to this question eventually from you because I want to know why you said it's, it's this easier. The first step. And I'm going to ask you, why do you think people are afraid of it? I think this might be part of it. But that type of customer that comes from a referral probably expects a lot more than someone who comes in cold or somebody that comes in just from any other type of lead.

They expect more. But you also have an obligation to make sure the relationship is handled properly to the referrer. Right? So there is a double sided. I know it's a confusing concept, referrer referee, you know what I mean? It's probably the. I don't know what we're going to call it, but anyways, the person that suggested this other person could use our software. So it's a really important concept to not only like communicate to the original referrer, but follow up with the referee. Because the expectations on both sides are like you said, much, much higher. Because they're not only putting their reputation on the line and saying, hey, you know what, these guys can maybe use your services. You can mention my name. I mean, because that's really what's happening is we get that information, we say, hey, so and so mentioned that you guys can maybe use us. You know, are you, what's your situation? Do you think you would benefit from xyz? So it's interesting, right? I mean, there is that elevated expectation. So you're right. There is a risk if you go too quickly. But at the same time, to answer your original question, why aren't people doing it? I don't know if people know. I think they expect things to just happen when they think that. Like running this net promoter system or an account experience program that promoters will just automatically promote for you because that's in their title. Right, but we just have not experienced that to be the case over on our side.

Well, I love the fact that you've taken it and I applaud you for this, Ian. I mean, it's not just a score. I'm sick and tired of people saying net promoter, score, score, score. That's one small element to this. And part of a good net promoter system is the referral, right? We literally call it a promoter for a reason, because they're willing to promote you. I've been a promoter myself. I personally am proud to be a promoter for products and brands that I love. Put me on a call, let me do some training, put me on stage. I kind of get a kick out of that, right? It feeds it, it makes me a better customer. I get that benefit on the backside of that. So yeah, there's a benefit to me as the referrer, right? But bringing people into that we always love. Think about it this way. You go out to a restaurant, you love it, it's really great. Right? You're very selective who you tell because you don't want them to come and ruin a good thing. You don't want to let anyone down, but you also want to make sure you save that for that. It's that special thing you give away where on the other side, if you're not so happy or you had a bad experience, you frickin tell everybody. Right? You just, you're outside with a sign like don't come here, you don't know, oh, where are you going? No, don't eat there. You know. And I think it plays so well into this net promoter system because you're literally, you're empowering your promoters to grow your business for you and then they get a benefit too. So it's interesting you talked about that. We, and I'm glad you said that too. We have a responsibility to both the referrer, to thank them, to reward them, to acknowledge their service to us as part of our sales team now. Almost. Right. But we also now have a higher expectation to keep that promise to that new person that comes in. And yeah, there is a little extra effort, but aren't we willing to do that for higher sales, more profit, easier onboarding in a sense? I mean, the payoff is there.

It's huge.

Yeah, yeah. So not knowing is. Let's go back to that. So not knowing, wow. Okay. That would probably be number one on the list, right?

62%. They don't track referrals as a result of the experience program. Yeah. So again, repeating that stat, 62%. So that's majority by far. And it's interesting, right, because there's a ton of examples out there of companies that have just skyrocketed growth as a result of referrals. Like Dropbox, like Tesla, like Bearfin. There's a ton of B2B examples out there. But I think taking a step back and it's maybe the question that everybody's asking is like, how do you actually get them to refer? So sure, you have to ask, but like how do you actually get them to do it? And I think that stems back to having that original contract up front with new clients. So like when you bring out a client and you have a program up and running, there has to be a conversation that occurs where it's literally saying, we survey. And this is very important to us. This is how we improve our business and better serve you as customers. This is very Important to us. We need your feedback. This is also how you get your response rate up, by the way. So two birds with one stone. But you make sure that they understand that not only do you expect them to respond, but if they're a promoter, you're going to call on them to fulfill their oath. As Aragorn had said. Oh, God. Nerd alert.

Earn your promoter badge. No, but, Ian, it's a good point, right? How bad are we in business about not setting expectations up front? We're scared to. We're scared to tell somebody, these are the rules, or this is what we're going to expect from you because we're so afraid that that might damage things. So what we do is we leave them in this place where they're creating their own reality and expectations. You know where they really get pissed off is six months down the road when you go to them and ask them to refer someone, or you go to them and say, we need this from you. Or this is. They're like, what do you mean? Why didn't you tell me this at the beginning? And so I do think getting over that initial fear and saying, look, this is our charter, you know, of what we expect from you as a good customer, right? This is your responsibility as a good customer. This is our responsibility of delivering great customer service.

This episode of the Account Experience podcast is sponsored by CustomerGage, the leading B2B account experience software that ties revenue to your experience data in real time to help you make better account centric decisions that drive revenue growth. Quick question.

What do you guys think is the.

Number one reason B2B experience programs fail? Believe it or not, it's lack of C suite buy in. In Customer Gauge's research with mit, they've found the quickest way to align yourselves.

With the C Suite is to actually.

Align with what they care about most, which is revenue. That's why CustomerGage is literally built from the ground up to maximize and track the revenue contribution from your experience program in real time. Companies like dhl, Anheuser Busch, Heineken, uh.

Yeah, we get a good amount of.

FreeBear1 login, IronMountain, H&R Block, SuperOffice and SugarCRM are already using Customer Gauge to maximize their growth by tying their programs to revenue. And with over $10 billion worth of account revenue actively being managed in Customer Gauge, yeah, that's billion with a B, they're the leader in the space. But maybe even more interesting, they found.

That once you get alignment with that.

C Suite, the needs of these B2B practitioners or the program champions are evolving too. In such a complex account environment, it can be really tough to measure and act on feedback quickly across multiple departments, divisions, or even locations. Luckily, Customer Gauge has you covered there as well with account native features that easily help you not only measure the feedback for multiple stakeholders in an account, but act on that feedback in real time. Because at the end of the day, if you're not empowering your frontline staff with the right insights to address customer issues, you're going to be dealing with the churn issue. It's not a matter of if, it's really a matter of when. CustomerGage helps you distribute this experience data across your entire organization, regardless of department or regardless of location, regardless of the vision, all in real time. No manual spreadsheets or a team of analysts are needed. CustomerGage's mission is to help B2B companies harness the power of account centric growth to drive meaningful change in their businesses. And that's a powerful thing. If you want to see Customer Gauge in action, go ahead and check out CustomerGage.com and get a demo of account experience today. You won't regret it.

If you have a customer and they don't understand that there's like a very big importance put on the survey program or the account experience program and they maybe don't give like transactional feedback on a certain thing or they're holding something in and then you ask them to be a promoter and it's. They're going to say no because they didn't really get a chance to express that frustration initially. So it can kind of work both ways. Is that if you make sure that it's very clear upfront that you want your feedback good and bad. Because they could be a promoter, but they could be really pissed off about one specific transaction. Right. You know what I mean? So like overall, the relationship survey is a promoter, but transactionally maybe it's like a two from a certain thing. And if they don't, you guys don't know that. It could really affect a lot of things downstream, like referrals, which again, I'm going to, I'm going to say something pretty bold here, Kerry. This should be the number one goal.

Of your program, I think. I think you're thinking the same thing I am, but go ahead, go.

This should be the number one goal of everybody's program, is to generate referrals and new, new business as a result of referrals. Because not only does it make more money, you grow faster, but again, it goes Back to our CX gap that we've talked about multiple different times is like if you don't have the C level buy in, your program is going to fail because they don't want to continue to spend money on this thing. So the way you show your value is you generate more revenue new business through referrals as a result of your experience program and you tie it back to your experience program and you show management that you show the C level that then everybody is crystal clear on. All right, wow. This thing is like a pretty kick ass growth lever for the company. So it's just so important, man. I'm gonna, I'm calling it. It's the number one goal of every program, I think.

Well, first off, when you said that, you know what sparks in my mind is that conversation happening in a gym. This is not a made up story. But we literally couple people go to work out, one person's raving about what customer gauge did for them. And that simple promoting, that referral that happened led to one of our fastest sales onboard relationship. It just rockets that through the system. And I'll be bold, Ian here. I'm going to build onto your bold statement and I would say, you know what, I think you need to start with your promoters. That's definitely your safe group to go to. But I'm going to say something else a little bit bold here too because I've been talking about this a lot. I think your next group of referrals, this is, this could be printed in red. This could be actually controversial in the NPS industry, but I think are actually your detractors. Well, let me tell you, I think passives are indifferent. I think passes are driven by one simple thing. It's money. Can you get me a discount? Does it work? My boss is nagging me. Whatever it might be. I think there's this passive group in the middle. It works. They're not necessarily leaving you right now, but if something better comes along, they probably are out. I strongly believe if someone's going to hit you with a detractor score and then give you loads of feedback of why they're a detractor, they care, their expectations are through the roof. They expect a lot. And for some reason there was a disconnect. Like you said, it could have been transactional. We didn't handle that support ticket so well. It could be product. Wow. I really thought it did this. And after our meetings I learned that it doesn't do this. How did you handle that? But I really think the next group that Companies need to go after. Maybe there's a whole other podcast. It probably is, but is that detractor group? I think that's your next referral base because a. I think they're the easiest to make into promoters, not the passive. I know this sounds nuts. I would say leapfrog that. I think your detractors are your next promoter group, I think. And I think with that, it becomes referral.

Yeah. And I think an important piece to call out that you brought up is like, there's. There's a difference between a detractor that just gives like a two and then says nothing and somebody that gives you a two and then goes on a rant about everything that you need to change. I think that that's what you're talking about is the person that cares enough to give you the detailed feedback. And what would happen, let's say, if you addressed every single one of those and fixed a lot of their issues, all of a sudden that passionate person takes that passion and puts it towards being a promoter. Like you said, man, it can very easily swing the other way if you just listen and adjust your tactics as a result of their fear feedback. So I think I'm with you, man. I mean, that's. It is a very bold statement to say that you should ask your detractors for referrals, but I do think that there is something there where, like, you want passionate people to advocate for your product. It doesn't really matter if they're a detractor if they're a promoter just yet. You need to basically capture that passion and apply it. And you can do that through a referral program. But it's important to know where they're at. And like you said, if they're a detractor, you try to address their objections and then ask them for a referral once you do. You know what I mean? Like, that's the type of thing where I think it could definitely benefit the program.

Yeah, I agree. And I think passion is it. Right? I mean, if you're going to put your reputation on the line for anything or anyone, passion has to be there. I mean, that's bold. Not everyone has that in them. So I think activating referrals is so important. So let me ask you a quick question before we wrap here, because I know we're doing these micro sessions, but I would feel like we would be doing a disservice if we didn't end this or at least wrap up with a couple of ideas. And I'm gonna turn this around. On you a little bit because I've read the content. We've got some really good suggestions. I mean, one of my favorite ebooks we put out was our referral line. I really genuinely walked away with like, holy crap. I don't know anything about referrals after reading it. But I'm a company, I've got limited resources. I'm just getting a net promoter system off the ground. I'm starting to break my silos down and I'm starting to activate my promoters now. I've determined, you know what, let's. Let's take Carey and Ian's advice. Let's go after a few of these. What are some easy ways to activate those referrals?

Yeah, great question. So there's a million. So we won't get into, like a big list here, but if you. So getting into your question. So you're smaller, you don't have a ton of resources. I would say as a marketer, not surprising to anybody, but I would rely on some good marketing. So literally, your people are your biggest asset. Right. So, like, rely on your employees to create something that gets people excited about referring. Right. So that can be a funny video that just asks in a very clever way that makes people want to go out of their way and do it or pass it around the organization. You can do something like that where it actually is very effective. You can lead with your CEO asking for a referral and basically saying, hey, like, we asked you when you came on as a customer to refer us if you became a promoter. And I'm coming to cash in on that. Not in that type of work, you know what I mean? But also, there's some really great things you can do from the product side. So if you have a SaaS product or if you have a service, you can offer some free, free feature access or services. If they do a certain amount. One comes to mind is Verifin. It's one of our customers. They did a B2B referral rally where literally they asked all of their customers for referrals and they had a big rally where it was a race to see who got the most referrals. There was big prizes at the top and the second tier and the third tier. But overall, it created excitement around the referral program, but drove a ton of external referrals that they then turned into business, obviously. So excitement, I think, is a big thing. You can create organically without a ton of money and do it right. I mean, obviously there's paid ways to do it. You can bribe people to give cards. I mean, there's, like, limitations on that from a corporate giving standpoint in the us but excitement. For me, it always comes down to excitement or capitalizing on the happy moments. And that was like a big thing for me too, was like, don't ask for a referral six months after they became a promoter. Ask. Ask it right in the moment when they're like just Cloud nine, happiest they're ever going to be. That's your moment. And there's a small window there. And if you don't capitalize on that window, it's going to be really difficult to pick it back up. Not saying it's impossible, but like everything in marketing, if you don't. If you don't get it at the right time, these things tend to go away. I mean, it's. It's a weird thing that not a ton of people factor in, but, like, timing is a lot of the world piece, I think, too. So, yeah, those are my two. I don't know if those are too broad, but, I mean, I could go on a rant about, like, all the different things, but those are two really quick ones.

Let me summarize. And this is what I'm hearing. This is what my takeaway would be then. Number one. And you've used you. Actually, I was counting how many times you use this word. I think you're up at like 40. Ask. This is right. We used to teach this in sales all the time. We used to say, if you're not asking, you're not selling. You can show, you can tell. You can show, you can tell you're not selling. You gotta ask. Eventually you have to ask. And I think there's the internal. That ask for the referral, then there's the ask for the sale. I think the second part of this is shaking the stigma that sales is a bad thing. I think that's another reason. And I like the way you did it. Build excitement, have fun with it, make it a rally. It's like if you have something that's really good, it's going to make someone's life really good too. This is going to help your pain. This will ease your pain. How would a good human being not want to give that to another human being? So I think there is that shaking sales as being a bad thing. If you're giving a good thing away. You know when sales becomes bad, when you're selling me shit, when you're selling me crap, when you're selling me something just to make a few dollars.

Yep.

Don't activate those as referrals. Guys. Don't go out there to do the money grab because you're going to be in a deep pile of shit in six months to a year. That's the reality. What you need to do is I'm doing this for the right reason. I have something you can't live without. Or you felt a pain that I felt. Let me give this to you. So that would be my two things you got to ask. Shake the stigma of sales being. It's a good thing to refer.

Boom. And on that bombshell of a sound bite, we're going to end here today, guys. Thank you, Kerry, for joining me. These have been a blast. So the micro sessions, we'll keep them up for a little bit longer. We have a couple of really cool guests lined up in the next couple of weeks as well, which we're really excited to get on board for you. But this is the Account Experience Podcast. Thank you again for listening, guys, and thank you for subscribing and sharing with friends. Talk soon. Sam.