When a prospect is referred to us, we enjoy a sort of trust transference. The prospect has a solid, satisfied relationship with the person referring us. Their thinking is along the lines of “Bob has taken good care of us, so if Bob thinks these guys will do a good job helping us with Marketing software (or whatever your product and service offering is), we’ve probably found a good marketing service provider.”
The referred prospect is already predisposed to us: confident that we can do the job.
Like us, like everyone, the prospect’s time is valuable. There aren’t enough hours in a day. There is more to do than time to do it in. As a result, being referred can mean a fast-forward past the buyer stages of Know, Like and Trust, straight to the “Try, Buy” stages. This means a shorter sales cycle. And very likely, it means a lower cost of sales.
When we are referred, the competition doesn’t have the benefit of the trust transference. (If there is any competition.)
I am always amazed at how often being referred results in the prospect bypassing the evaluation of other service providers. I believe this occurs because of the time + trust transference effect. The person making the referral is trusted enough to substitute for due diligence and the prospect can use the time he would have spent evaluating other services providers on more business-critical activities.
You’ve probably experienced what I’ve described. Usually when I asked business owners where their closed business comes from, the answer is referrals. There may be a few deals that come from a webcast or an event they attended. There may also be the occasional deal that comes from direct mail or email marketing. But the lion’s share of closed business seems to come from referrals.
Referral become a vital part of the growing network of B2B marketing. Business are empowering themselves with other brand thus establishing a good relationship with other business and making the most benefits out of it.