Beyond Magic: Making Your Client Referrals and Testimonials Work Harder
007 – June 2013
Most agency and B2B-firm bosses appreciate fully the power of their client referrals and recommendations. Such positive ‘advocacy’ often delivers warmed-up prospects – half-inclined to buy. In some cases, it contributes up to 50% of converted new business.
And it certainly beats the hard slog. All those cold-calls. Expensive pitches. And, worst of all, those bible-size procurement tenders.
So wise managers work on advocacy. They apply popular techniques such as the ‘net promoter score’. They cultivate loyalty and goodwill (http://therightthingtodo.co.uk/index.php/2012/07/hunters-got-us-into-this-mess-will-farmers-get-us-out/). They cherish their advocates’ willingness to encourage friends and contacts privately over a drink or two. But, best and most powerful of all, they seek to achieve open public advocacy. That is published testimonials delivered via print, website, conference or collateral.
Now stir in the ripple effect of social media distribution. And settle back…
Magic or Model?
But (interesting but) how and why exactly does this testimonial ‘magic’ work? Which carefully-crafted testimonial has greatest resonance and works hardest? What, if anything, could deliver more?
Is it just a case of ‘any reference is a good reference’? Or is there a secret ingredient: personality or brand; client size or value; intrinsic newsworthiness; or the techniques and results reported?
The answers come in a new concept: ‘Business Reference Value’ (BRV). A new study (*), founded on some serious number-crunching, will help you unpack the magic. And compute, analyse and apply the hard cash value of your testimonials.
The study tracked the BRV mechanism over a six year cycle. It explored its impact on conversions and profitability. And it found four major drivers of BRV. They are the:
- Size of the client firm (generally the larger the stronger the impact)
- Length of relationship reported (the longer the stronger)
- Media format employed (generally the richer the better e.g. video over audio over written case-study) and
- Congruency or relevance to the prospect (generally the closer the better).
Typically size and relationship longevity lead. But they do not dominate. They add up to about 31% of the impact while media format delivers a potentially amplifying 14%. Interaction effects between drivers chip in 9%. Meanwhile congruency – the largest single effect – contributes 17%.
For many this last finding will be intuitive. No matter how fabulous the brand, washing machines (say) will simply have less resonance for a fashion prospect than another fashion brand.
True, but the relationship is more subtle. Within congruence, matching prospects to (1) a similar service or product client certainly has the largest individual impact. But it is enriched (2) by industry association and, further, (3) by role alignment with the advocate. As a prospect, as social influence theory predicts, we want to hear from someone like us. Someone just like us. So, for example, the mid-ranking marketing manager will – by far – prefer his own industry/own product peer to the glamorous if alien global VP from another sector.
Perhaps most intriguingly the study indicates that BRV is playing a steadily growing role in a prospect’s decision to adopt and buy. Speculatively, it’s a case perhaps of an increasingly virtual social community re-imposing itself over complexity and distance.
The lesson? Construct, maintain and constantly build a comprehensive portfolio of references. Recognise that – for someone somewhere – even the dullest sounding reference may count. And count significantly. Deploy and target them carefully in each case. Seek total congruence on the ‘less is more’ principle.
Next start to build up a tracking mechanism for your referrals. What works, when and how. What yields most.
So, yes, referral (BRV) is the major asset wise managers always knew it was. But it doesn’t just happen. And it’s certainly not magic. You can deploy it and target it actively and precisely in your business development toolkit.
(*) Kumar, Petersen and Leone (2013).