Saturday, November 9, 2013

Brave the Realities of BRV

BRV is an acronym for Business Reference Value, a concept articulated by researchers at Georgia State University, University of North Carolina-Chapel Hill, and Texas Christian University regarding business-to-business (B2B) sales. BRV is an index of the monetary value to a retailer of a recommendation from a current business customer when seeking orders from a prospective business customer. BRV is a function of the degree of influence of the recommendation and the amount of business available from the prospect.
     To calculate BRV, the researchers gathered data from a financial services retailer and a telecommunications retailer. Blending the findings with results from other studies of B2B marketing, here are my recommendations to a broad range of retailers:
  • Give the prospective customer recommendations from only a few current customers. If you give too many, the prospect may feel a need to check them all out, delaying the purchase decision to the point where the prospect might abandon it. 
  • Use the right recommendations. Those which are most effective will come from firms matching the prospect’s characteristics. Most powerful is a match in product or service offered. Next is being in the same industry segment. Third is that the individual giving the recommendation carries out job functions in her firm similar to the functions of the individual to whom the recommendation is sent. Also important are the size of the current customer’s business and the length of the business relationship between the retailer and the current customer. The larger and the longer, the better, so if these are favorable to your case, be sure to highlight the facts to the prospect. 
  • Attend to modality and comprehensiveness. Of the methods used in the Georgia/North Carolina/Texas studies, least influential were recommendations which just invited the prospect to contact the current customer with any questions. Most effective were video testimonials. Face-to-face meetings between the prospect and the current customer were not included in the study. I’d expect these to be most effective of all. 
  • Continue to cultivate the business of referred clients. There’s only a limited relationship between BRV and CLV—Customer Lifetime Value. The proper recommendations will bring the new customer to you, but you’ll want to work to turn that new customer into a long-term shopper. 
  • When the new client signs on with you, be sure to thank the people in the business that gave the recommendation. This raises their motivation to do it again. 
Click below for more:
Cultivate Referred Customers
Stay Aware of B2B Distinctions

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