A B2B organization relies upon a combination of finding reliable clients and generating new sales. The more efficiently you can do these two things, the more revenue you create over time. While advertising will always matter, a referral partnership with other companies can supercharge your business development. If you work with a reliable partner, you can help each other build toward mutual revenue improvements.
One immediate advantage of partnering with a reliable partner is added flow for your pipeline. Choose a company with which you work often, ideally with a business that complements yours. Offering incentives for their referrals will boost the number of potential clients heading your way, especially if they come from someone who knows you well. When combined with your internal business development team, you can significantly bolster your growth potential.
Higher Conversion Rates
Not all traffic is created equal. When you cold call potential customers, you face a high rate of rejection, no matter how good your sales team may be. Partner referrals are different because they provide potential clients who are already interested in what you have to offer. Even more importantly, they have a recommendation in hand before they arrive, so the sale has begun well before you first speak to the incoming representative. All of this gives you a leg up on competition you might otherwise face. The result will usually be higher conversion rates, bringing in more real customers than your usual efforts will manage alone.
Lower Cost of Acquisition
High conversion rates result in a much lower cost of acquisition for each customer. Much business development work still works like the proverbial shot in the dark. You reach out to businesses that you target intentionally, without a sense of whether they feel like they need the services or products you offer. This turns into a great deal of staff time and expense on a per-customer basis. A referral partnership cuts out several steps and gives you a chance to deliver more customers with less effort.
Identifying the Right Referral Partner
To make the process work most effectively, you need both mutual trust and mutual incentives. If you work regularly with a vendor, for example, you have the potential to deliver increased revenue into each other's coffers. You should have some history of working together with similar clients, solving problems together, and communicating effectively throughout. The cash incentives you offer for referrals should serve as a motivator, but mutual business interests as the driving force will always be more effective in the long term.
You should know and trust your own business development process. A referral partnership isn't a replacement, but a supplement. Look for opportunities to work with natural business partners to expand your pipeline and supercharge your revenue.