5 referral partner program benchmarks to measure against [Infographic]

As a result of the changes taking place in the partner ecosystem, it has become of paramount importance to analyze how partners and their relative programs are performing in order to meet and adjust to mounting growth objectives. With that in mind the success of a referral partner program was analyzed in order to create benchmarks that can help companies make informed decisions about their partner programs.

The five benchmarks evaluated were analyzed by a third party and comes from partner referrals made on referral partner programs run on the Amplifinity platform, reported in The State of Business Partner Referral Programs.

1. The average activity that can be expected from a referral partner program

Referral partner activity is the foundation of any successful referral partner program. Therefore, it is important to establish a standard to measure against.

According to the data, on average 69% of referral partners are actively making referrals during the course of a year. Of course this does mean that 31% weren’t active but in any partner program there is going to be lulls and churn. The fact that 69% referral partners are continuing to send qualified referrals to a company a very positive activity level compared to other partner programs.

This could be a result of referral partner programs having a lower barrier to entry which makes it easier for partners to participate and submit leads.

2. The average number of referrals a referral partner will make

Based off the average percentage of active referral partners during the course of a year, it’s important to determine how much activity you can expect from these partners.

The data analyzed showed that on average:

  • 45% of referral partners will make 1 referral
  • 47% will make 2-10 referrals
  • 8% will make 11+ referrals

How often referral partners make referrals throughout a year has a large impact on a partner referral program’s success. With almost half the referral partners making multiple referrals during the course of a year, partner referral programs are already in a good place to help meet growth objectives. But to increase this even further, referral partners need to be engaged with and nurtured. Try reaching out on a regular basis to keep the referral partner program top of mind for referral partners.

3. The average number of referral partner leads

The number of leads that are generated per referral partner are directly correlated with the number of referrals made. Therefore, it is reassuring to see that over the course of a year a referral partner can be expected to generate 4.6 leads. This rises to 6.7 if the referral partner has previously had a referral turn into a lead. The increase from previously successful referral partners is a result of the referral partner understanding not only the type of referrals to make but the referral demographic.

To help referral partners who have made referrals but haven’t had any converting to a lead try coaching them on the target buyer and ways to refer. You can also identify the partner who have had success in creating referral leads and reach out to congratulate them and encourage continued productivity.

4. The average partner referral conversion rate from lead to deal

While all the previous data is extremely valuable in order to make sure you are getting optimal engagement from referral partners and that you are getting the highest amount of referrals turning into leads, it all really comes down to if they are turning into deals.

The good news is that the data shows that partner referrals are one of the highest converting sources of leads with a 31% conversion rate from partner referral lead to deal. This outstanding conversion rate can be attributed to the fact that referral programs run on Amplifinity referral software are formal programs that educate partners on the target buyer and automate the process.

This conversion rate increases by 10 percentage points when sales is involved, coming in at a 41% conversion rate. The increase seen here comes from these programs having the ability to manage their sales team to objectives for recruiting partners to the program and collecting referrals from partners.

5. The amount of new customers coming from each partner

When looking at the overall referral partner lead flow on a referral partner program, 863 partners were actively making referrals out of the average number of 1,250 partners enrolled in the program during the course of a year. These 863 partners on average provided 1,231 new customers. This means that on average in a year’s time you can expect every one partner to generate 1.42 new customers.

However, when adding sales into the equation your number of new customers gained per referral partner rises to almost two.

Start visualizing the partner referral flow and discover how to create successful partner referrals:

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Data: How companies are driving deals through partner referral programs

The partner landscape has been going through momentous changes due to the onset of the cloud and consequently the change in target buyer. Therefore, it has become a necessity to diversify partner relationships in order to meet growth objectives. One way companies are doing this is by establishing partner referral programs to:

  • Qualify resellers as referral partners to prove productivity and fit
  • Generate leads from ISVs and other individuals who would never be resellers
  • Get value from resellers who can’t transform to SaaS delivery models but can still be leveraged as referral partners
  • Diversify partners and increase revenue generation through referrals


Based off referral partner data from actual companies’ partner referral programs during the course of a year, benchmarks were formed on:

What is the average referral activity a company can expect from partners?

Kathy Contreras, Research Director for Channel Strategies at SiriusDecisions commented, “Partner referral programs can be used in any industry and offer a way to motivate and reward partners for identifying and registering new leads. This type of partnership [referral partners] provides the opportunity to align with organizations that have strong relationships with a supplier’s target buyers, but are not interested in or qualified to resell the supplier’s offerings (e.g. suppliers that provide collaborative solutions, systems integrators, consultants, influencers, etc).”

In the recent study done by Amplifinity based on partner referrals made on the Amplifinity platform during the course of a year, it was determined that on average 69% of referral partners are actively referring throughout the year.  The average program contained 863 partners making referrals out of the average 1,250 enrolled in the partner referral program.

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The remaining 31% of referral partners enrolled were not actively referring.

How high-quality are the leads that come from referral partners?

Partner referral leads are one of the highest quality partner leads. What makes partner referral leads so high-quality are their one-to-one interactions. But not all partner referral methods necessarily enable that type of interaction. Therefore, it is interesting to compare the most used partner referral methods to their success in driving deals.

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Most Popular Partner Referral Methods

As the chart illustrates, a lead form is by far the most popular way for partners to refer. This is logical since partners have a higher comfort level with lead forms as a result of it being a common business practice for partners. When looking at how lead forms converted for partners it is no surprise that it came in as the second most successful in terms of generating deals with a 37% conversion rate from partner referral lead to deal.

But if lead forms have the second highest conversion rate what is the highest?

Surprisingly, print cards have a conversion rate of partner referral lead to deal of 67%. However, this must be taken with a grain of salt since print cards were used less than 1% of the time by referral partners. This is another method that emphasizes the value of that one-to-one referral from partners.

Social media comes in as a far second in terms of popularity, with the data showing that not one partner referral coming from social media converted to a deal. This brings to the forefront the assertion that it is the one-to-one interaction that makes partner referrals such high-quality referral. While social media referrals can be done one-to-one it is more often used as a general blast.

“The data supports the concept that channel marketers already know – personalization improves conversion,” says Trisha Winter, CMO of Amplifinity. “The same goes for referrals. Social media, which is typically used as a one-to-many referral method was the second most used but had no success. Partner referral programs need to enable one-to-one referrals with methods like print cards, lead forms and verbal; which had high success rates.”

What impacts partner referral programs’ conversion rates?

The average success of deals coming from partner referral on the Amplifinity platform is 31%. On its own this conversion rate is remarkable, but when compared to the overall industry average created by Salesforce’s Implisit of 0.48% it almost becomes unbelievable.

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However, this drastic increase in partner deal conversion didn’t surprise Winter, “It didn’t shock me that the success rate of leads created from partner referrals run on Amplifinity was so much higher than partner lead industry standards. When companies have the ability to enable partners with target buyer information while automating referral tracking, communications and incentive fulfillment it’s easy to see how referral volume and quality would skyrocket.”

Another factor that impacts the conversion rate is the fact that many partners will only bring a referral forward when a prospect has already become interested in the product or service. Attribution can additionally happen at the opportunity stage, which inherently inflates the success rate.

How does enabling sales involvement change the partner referral conversion rate?

While a 31% conversion rate is amazing by any standards, the Amplifinity report showed that enabling sales involvement in the partner referral program drove up the conversion rate even more. On average, a referral program that enabled sales to actively recruit partners to the program, generate referrals from partners, qualify referrals through partners, and receive a facilitated introduction from partners, increased the conversion rate to 41%.

What type of compensation is being offered to referral partners?

Compensation is very important when it comes to any partner program. Within the compensation structure lies the motivation for partners to make referrals. So what type of compensation is used most to motivate partners?

    • 60% of programs offer checks
    • 20% of partner referral programs offer gift cards
    • 20% of programs offer bank transfer

The most common compensation amount paid out to referral partners was between $101 – $1,000 with 76% of partner referral programs paying between those amounts. This large variance can be due to the percentage of revenue a partner referral program pays out and the cost of the product or service the partner is referring.

Download the full report to see more data on business partner referral programs including:

        • Most offered referral methods
        • Most successful referral methods
        • How the top 1% and top 10% of referral partners perform
        • Average referral pipeline
        • And much more

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New data: How companies are using referral partner incentives [Infographic]

Partner incentive amount and type always seem to be in question and I can understand why. The partner incentive is the motivator and continual base driver of partner deals. Therefore, the type, amount and structure are very important decisions. In recognition of this, data on referral partner incentives was analyzed to determine the most popular incentive type and amount offered to referral partners to help direct referral partner strategy.

This data was analyzed by a third party and comes from referral partner incentives fulfilled by referral partner programs run on the Amplifinity partner referral program software, reported in The State of Business Partner Referral Programs. Here are the findings.

What type of referral partner incentives are companies providing and why?

There are many different types of referral partner incentives. Referral partner programs run on Amplifinity used three different types. This is how the usage came out:

  • 60% used checks
  • 20% used gift cards
  • 20% used bank transfer

Checks had the highest usage with 60% of programs fulfilling on them. Checks were typically used when a referral partner program had variable reward amounts or offered a percentage of revenue to referral partners.

The 20% that used gift cards typically offered this type of referral partner incentive when they had a “bounty” reward structure.

Bank transfer tied with gift cards at 20%. This type of referral partner incentive was utilized when the partner program was paying out high amount regularly and wanted to group the incentive payments. This is also used when international payment are required in order to handle currency exchange.

What is the average referral partner incentive amount companies offer?

The other aspect of referral partner incentives that is even more deliberated on than referral partner incentive type is amount. Partner marketers and channel program managers need to ensure that the incentive is high enough to provoke action and keep the referral partner program top of mind but low enough so it’s still is less than the average cost per acquisition of marketing leads.

According to the data, the average referral partner incentive amount overall was $182. Here is the incentive amounts breakdown.

  • 14% fulfilled on incentives that were greater than $1,000
  • 76% fulfilled on incentives from $100 – $1,000
  • 10% fulfilled on incentives from $40 – $100

The maximum incentive paid out to a single referral during the course of a year was $8,463. This variance in the amount of referral partner incentives can mostly be due to the structure of the incentive being a percentage of revenue and the different costs of the product or service the partner referred.

Start visualizing how to offer motivating referral partner incentives that entice referral partners:

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How to realign your partner model and SaaS company with referral partners

Partner and agent models are extremely profitable. Partner types like resellers and referral partners help companies get greater sales coverage in a less expensive and more efficient way than a direct sales model. But for SaaS companies it can be more complicated. Among the disruptive ripples that SaaS made was the scrambling of traditional partner models. This is a result of many reseller partners not being able to handle the more supportive and relationship-based customer model required by SaaS products, technical road blocks, and the constant product updates that a more agile subscription service has. So with all of this change you may be asking . . .  What does the partner model look like for SaaS moving forward?

The following are 4 changes that will impact the SaaS partner go-to-market strategy.

1. The position of ensuring customer success moves from the channel partner to the company

With the on-premise model partners took care of the technical implementation of a product but it was then up to the customers to facilitate their own success beyond that. With SaaS removing those technical barriers and instituting reoccurring revenue model, the emphasis is now on the continued building of a relationship and success of the end-customers. SaaS applications have allowed companies to become extremely agile which doesn’t align as well with the rigid reseller model. These partners aren’t necessarily focused on customers after the original sales and many are having trouble conforming to the new SaaS delivery model. These changes make it harder than ever to be successful as a reseller and for SaaS companies to grow revenue from the partner channel.

Based on these challenges, more SaaS companies are moving customer success in-house.

Suggestion: Although current resellers and distributors may not be as effective as they once were, they are still in a position to increase your revenue generation and provide coverage. Try enabling them to submit targeted leads that are picked up by your sales team. They can then assist in the sales process and still be rewarded for their efforts. This is the referral partner model which allows you to maintain and increase sales coverage while delivering the customer support of a direct sales model.

2. SaaS companies will have a dedicated team to meet customers rising expectation

Another large factor for customer success moving in-house is the rising customer expectation that they expect their contact to fulfill. Resellers are becoming less dedicated and more polyamorous than ever before. They often don’t have the time or resources to provide that type of support that SaaS end-users need.

That means when something goes wonky as it always does in one instance or another a customer will require a quick to instant response time. Depending on the type of product and its role in a business it could impact a company’s success or stall its ability to move forward. This means that the fix needs to be applied as quickly as possible.

Suggestion: When a customer comes from a partner referral as opposed to being sold by a reseller it ensures a quicker response time since they don’t have to wait for the reseller to have enough time to contact the company, understand the solution & institute a fix. Try assigning a dedicated customer success rep to an account to ensure the providing of proper communication and information in a timely manner to help control the situation and fix the issue.

3. Agile product updates require continual training

One of the beauties and challenges for a SaaS company or product is that they can easily institute product updates quickly and seamlessly. This allows companies to provide more customized products and services while continually improving it. However, this also requires the continual training of resellers on the in-depth technology requirements, benefits, drawbacks, how to use it and how it can apply to different customer types.

This means that resellers need to be able to set time aside to continue to understand product updates at an expert level. This is the only way they can try to provide the consultative services that customers expect goes along with SaaS products and services. Unfortunately many reseller don’t have the time to keep training or provide the consultative services that enable customers to benefit the most from using the product or service.

Suggestion: Instead of providing continual in-depth training as you would with the reseller model, the referral partner model allows you to update partners on new benefits, its capabilities, restrictions and uses in a succinct, high level format. Try assigning a sales or success rep to update referral partners regularly so they can correctly relay the benefits to qualified leads but don’t have to have a deeper understanding to sell the product or ensure the success of product updates.

4. More referral partners and less partner monogamy

While we have already said referral partners are an alternative route (and smoother route) for SaaS companies than other traditional partner models, we must take into account that partner monogamy is no longer reliable. As a channel account manager at a large company releasing their own SaaS product said in a confidential interview, “You have to have a way to manage a partner that is there for just one deal and no more. Everything you’ve done before is kind of thrown out the window.” Expanding on this he explains that, “One day they might work on a deal with you and the next they will have moved onto a deal with someone else.”

Suggestion: A referral partner program can help manage and scale partner referrals while allowing SaaS companies to continue to expand coverage areas and generate revenue from the channel. Try implementing one to draw sustainable revenue growth from your partner ecosystem while removing the challenges that SaaS products and services create within the channel.

To understand referral partner program performance benchmarks from companies like yourself, download The State of Business Partner Referral Programs.

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Referral Strategy: Create an onboarding process for your referral sources

After identifying your referral sourcesdeveloping a recruitment strategycreating a sales enablement plandeveloping a plan to enable referral sources, and constructing a referral incentive strategy, you can start to fashion a referral strategy that enables you to create an effective onboarding process for your referral sources.

To build an onboarding plan, you need to first determine what information should be collected at registration for different referral source and the training they need to succeed.

5 ways to determine your referral strategy for your registration process

Throughout the life of your referral program, you will need to collect different information from referral sources at different times. To figure out what information you need to collect at registration based on your referral program structure, answer these five questions.

  1. Are you using the referral program as your partner database?

If yes: Collect all required fields at registration, like email, address, and phone number.

If no: Connect your registration and program to your CRM/PRM with SSO and prefill this information.

  1. Are you paying your referral sources via electronic funds transfer?

If yes: Collect the appropriate bank information.

If no: Validate the address or email is correct for a check or electronic gift card.

  1. Do you want to approve referral sources before they join the program?

If yes: Collect the key information you are judging their approval on. This could be a check on access to your target buyer, a sample of existing clients, or the ability to commit to an SLA.

If no: No additional information is needed.

  1. Is a salesperson (direct or channel) involved in the relationship with the referral source?

If yes: Provide a way to select their salesperson during registration so that performance can be tracked and reported by salesperson.

If no: No additional information is needed.

  1. Do you expect that the majority of referral sources will earn the taxable limit of $600 during the calendar year?

If yes: Collect the tax information at registration. If the referral source is inside the U.S. this would be through a W-9. If the referral source is outside the U.S. this would be through a W-8.

If no: Establish a process where if they reach the taxable limit, the appropriate tax information is triggered for collection before further payments are made.

Once these decisions are made you can construct your registration form to collect this information.

To help guide you, download this worksheet, along with the five questions worksheet.

How to build a training plan for your referral program

Another important part of onboarding referral sources is training them. Depending on what type of referral source you’re enabling, this training may be as easy as providing content on your target buyer or as in-depth as laying out the different value propositions each type of buyer will respond to and how to identify them. Depending on your referral source’s knowledge of your business, you may want to just put the information in your referral program portal so they can access it whenever they might need a refresher.

When considering the different training you should provide, think about it in relation to who the trainer will be or if it would be self-taught, the delivery mechanism for the training, if there is a specific date(s) it should occur or if it is ongoing, and if the training is a requirement or optional.

Here are a few types of training you can consider offering:

  • Target buyer and buying personas
  • Referable product(s) and value props
  • How to make a 1-to-1 referral ask
  • What happens after you submit a referral – process and communication
  • How to earn incentives – criteria and payment

To help construct your training process, download the exercise or download the entirety of, The Referral Guidebook, to create an all-inclusive referral strategy.

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Referral strategy: Developing a sales engagement plan

Once you have identified your referral sources and developed a motivating recruitment strategy, you’ll need to start thinking about how to align your referral strategy with sales. The sales team has the potential to have a monumental impact on your referral strategy if they have the right tools. In fact, two recent referral benchmark studies found that sales enablement increased the conversion rate of partner referral lead to purchase from 31% to 41%, while the conversion rate for customer referral leads increased from 13% to 30%.

But how do you go about achieving this?

The first action you need to take is deciding whether your direct or indirect sales team needs to be enabled so you can then create a step-by-step plan for them to drive referrals. Remember, sales can play a massive role in recruiting referral sources and collecting referrals so this is a necessary step to increasing your revenue from referrals.

Should you involve direct or indirect sales in your referral strategy?

When trying to decide on whether to enable your direct or indirect sales team to drive referrals, think back to when you identified your referral sources and divided them into different individual programs.

Your different referral programs can fit into three different program structures. Determining what structure fits each program will help you decide what type of sales team you should enable as part of your referral strategy. Here are the three program structures to build your program around.

Direct to Individuals

Here an individual such as a customer, influencer, small agent, small business or employee would refer business directly to you.

Use case: A business services company targeting SMBs knew that small businesses referred locally. They created a program to enable customers to make referrals of other businesses and another program to allow small business accountants to refer their clientele. Direct sales manage these relationships on a local/territory level.

When you are trying to enable this type of program ask yourself this question:

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To and Through a Strategic Alliance

Here you create a program for a consultancy, system integrator, software vendor, bank, service provider, agency, association or another type of strategic partner, that is co-branded and co-managed by you and your strategic alliance to enables their employees to refer business to you.

Use case: A merchant payment systems provider had strategic alliances with large commercial banks so they created a dedicated referral program for each bank. Bank employees were in a position to recommend the merchant system to their SMB merchant customers. To ensure success, the programs needed to be branded and integrated into the bank’s systems. Marketing manages these relationships.

When you are trying to enable this type of program ask yourself this question:

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To and Through a Partner Network

Here a company has a platform that supports different programs for each managed partner such as consultancies, agents, system integrators, software vendors, software providers or agencies, where the managed partner can enable their employees to make referrals.

Use case: A B2B software provider had managed relationships with other software vendors and digital agencies who sold into their same customer base. They created a referral program that offers incentives to the corporate entity as well as the referring employees. These incentives varied from company to company based on their arrangement. Channel sales and marketing together manage these relationships.

When you are trying to enable this type of program ask yourself this question:

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To help guide you, try downloading and filling out the full worksheet.

Now that you have figured out what sales team you need to enable, you’ll need to develop your referral strategy in more depth to engage them.

A 10-step checklist for building your sales engagement plan

Using this 10-step checklist, you can get your sales team the tools and structure they need to be successful in making referrals part of the go-to-market strategy.

  1. Meet with your head of sales to determine the level of involvement.
  • Your deliverable – Commitment from sales leaders for driving recruitment and referrals.
  1. Work with sales leadership to set activity goals.
  • Your deliverable – Create objectives by the salesperson. Have them be accountable for a specific number of referral sources and referrals per month/quarter/year.
  1. Work with sales leadership to determine any changes to the sales incentive structure.
  • Your deliverable – Make any changes to sales compensation based on if they meet recruitment and referral goals.
  1. Work with sales operations to enable sales with tools to drive recruitment.
  • Your deliverable – Add the ability to invite CRM contacts with pre-filled registration.
  1. Work with sales operations to enable sales with tools to collect referrals.
  • Your deliverable – Add the ability to input verbal referrals in the CRM and to “own” referral sources for reporting.
  1. Work with sales operations to provide referral status transparency.
  • Your deliverable – Add the ability to see who made the referral on each lead record and to click into the referral history of that partner.
  1. If you’re using a direct sales team: Work with sales operations on lead routing rules.
  • Your deliverable – Change lead routing so that any referral lead that comes from a source that a salesperson “owns” gets routed to that salesperson.
  1. Work with sales operations to get sales leadership reporting.
  • Your deliverable – Create dashboards in your CRM that track recruitment, referral leads, referral opportunities and successful referrals by salesperson/territory/etc.
  1. Run a pilot rollout with one sales group.
  • Your deliverable – Get feedback to improve the process as well as data and testimonials to show the success of the program.
  1. Rollout the referral program to your full sales team with training and an internal campaign.
  • Your deliverable – Train the sales team who is actively recruiting and collecting referrals.

Or fill it out right on this page for your own knowledge.

After looking through your checklist, if you need help enabling sales with any of these functions, see how a sales enabled referral program can help.

Lastly, to see how referral sales enablement fits into your overall referral strategy, download, The Referral Guidebook to get all 20 exercises to build your referral strategy into a revenue generating channel.

 

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