The Key to Keeping Your Referral Sources Engaged? Communication

Communication is the key to success for many things, especially a referral program. You’ve done the hard work of building your program and recruiting referral sources, now you need to keep them engaged. Here are some communication tips that can make a difference when trying to keep your sources engaged and active in your referral program.

Automate communication based on program status

A great place to start is setting up automated communication based on different statuses within your program. Once your customer, partner or other referral source is actively making referrals, you don’t want them to disengage from your program because of a lack of communication. Provide transparency, especially around the status of those submitted referrals currently in progress. By setting up automated communications triggered as the referral status changes, you can ensure that your referral sources will stay engaged while waiting for a referral to become successful.

Nurture communication based on program activity

There are a few different types of nurturing communications you can send to your referral sources to keep them engaged in your program between referrals:

  • Training Communication – If a referral source has a high number of referrals, but little or no success, send an email that helps educate the referral source on the target buyer and value proposition to ensure they are referring the right companies/people with the right message.
  • Engagement communication – If a referral source has low referral activity send an email that reinforces the product value proposition and the target buyer. You can also remind them where to find referrals and how to ask for them.
  • Educational communication – If a referral source logged in within a set number of days, but didn’t make a referral you can provide information on how to make a referral, what happens to a referral once it’s submitted and, again, reinforce the product value proposition and target buyer.
  • Thank you communication – If a referral source has a high number of successful referrals you can create a kudos campaign to recognize their efforts and encourage them to keep referring.

Regular Program Communications

Lastly, you can send out regular program communications. These regular value-added communications can keep referrals top-of-mind for everyone in your program. Topics you can focus on for these types of communications include:

  • Target buyer/persona spotlight with corresponding value prop.
  • A leaderboard of top members by referral success.
  • Tips on asking for referrals.
  • Success stories – highlight a story on how someone generated a successful referral.
  • Testimonials – get quotes on how great the program is and how easy it is to earn rewards.
  • How to earn incentives – the criteria needed and how payments are sent out.

The more you regularly communicate with your referral sources, the better engaged they will be – and engaged referral sources can help to increase the revenue generated by your referral program.

For more referral program tips and tricks, check out our blog.

How Verbal Referrals Can Increase Advocate Referrals

We all know that customers, like ourselves, want things to be easy. The more barriers you have in your sales cycle or on your lead forms, the less likely you are to convert all of those leads into opportunities. As marketers, it’s important for us to make every step of the customer journey  easy – starting at the first point of contact, all the way through to the end. According to a survey from McKinsey, making the customer journey as easy as possible increased revenue growth by 10-15%. The survey also found that an easy and effortless customer journey resulted in happier customers, as positive customer experience ratings increased by 20 percent.

Look at companies, like Amazon for example, who have perfected the easy customer journey. By giving users the option to enable 1-click purchase, Amazon removed the barriers that might otherwise stall an online purchase. How can you replicate a similar ease of use for your referral marketing program? You can start by automating and tracking verbal referrals within your system.

Verbal referrals, also referred to as offline referrals, can be difficult. When you have a customer or partner who is ready to pass you a warm introduction to someone excited about your product or service, the last thing you want to do is ask them to stop and fill out a form online or apply to join your program. Instead, you want to be able to receive that referral lead and, in the easiest way possible, be able to enter the referral into your program workflow and make sure it is tracked back to the partner or customer for proper credit. If you are currently trying to track these types of referrals manually, it’s likely the most difficult part of managing a referral marketing program.

By incorporating verbal referral functionality into your referral workflow, you can eliminate a pain point for advocates who make verbal referrals but don’t get the credit due to a lack of attribution in the existing CRM or system of record. By allowing for verbal referrals, your advocates aren’t tied to lead forms through your dedicated system. Instead, they are empowered to leverage those close connections through the power of conversation. Chances are, your advocate will thank you, and be more willing to refer leads in the future.

Listen, people are busy and time is money. We all know this. That’s why it’s more important than ever to track verbal referrals. By allowing proper attribution for verbal referrals, you are allowing the advocate to keep leads engaged and collect those verbal referrals when a lead might not have time to fill out a form. Simply put. a verbal referral reduces the amount of effort an advocate has to put forth in the referral process.

And if you’re still not convinced, listen up. By offering verbal referral functionality as part of your program, you give customers the option to simplify their referral process which, in turn, increases engagement with the referral program. If you incentivize the enrollment process, advocates making verbal referrals are automatically sent an invite to your program if they aren’t already registered. Because the advocate has already made at least one referral, they are more inclined to register to be part of your program. When that verbal referral turns from a lead to a customer, your advocate will be notified and can see their reward which will encourage future referral engagement with your program.

In summary, having the functionality within your program to track and reward verbal referrals is essential to the success of your program – so remove those barriers and increase your advocate engagement! If you’d like to learn more about how you can increase your referral ROI, check out the Amplifinity ROI calculator.

Learn How To Build A Referral Channel In 8 Easy Steps

So you are convinced of the value of referrals and you’re ready to take the first steps towards building a referral channel, but where do you start? In eight simple steps, you can build out and scale a referral channel for your enterprise company. And with the help of software like Amplifinity, you can bring referrals into your sales workflow to increase both partner activity and revenue.

Step 1: Identify Potential Partners

To start building your channel, you need to figure out your referral target market. To do this, you need to have your marketing and sales teams answer these questions:

  • What companies sell complimentary products to your same targets? These companies can include integration partners or companies selling into the same buying group. You can also identify the typical technology stacks and services that are used by your target buying group.
  • Who has influence over your target buyers? If you are selling to small or mid-sized businesses, there’s a lot of providers you can consider including people like their accountants and bankers.
  • What associations do your target buyers join or follow? Whether they are chambers or local business association, these types of groups are a great way to break into the small business network.
  • Are there purchases that typically happen in coordination with yours? For example, when someone buys marketing automation they might also purchase a content platform.
  • Are there consultant groups or agencies that advise on purchase decisions in your industry that are complementary to your product? From niche consultants to product sites, there are likely a number of different consultants and review sites that are influencing your target buyers.
  • Are your target buyers part of a franchise model? If the answer to this one is yes, it’s good to note that the franchisers have direct access and influence you can tap into.
  • Are there under-performing re-sellers in an existing partner channel? If you have an existing partner network made up of re-sellers, you can consider transitioning your under-performing re-sellers into referral partners.  

Step 2: Engage and Recruit Partners

Now that you’ve identified your potential referral partners, you need to get their attention and explain to them the value of becoming a referral partner with your business. To do this you can consider the following value props:

  • Does recommending your product or service put the partner in a positive light with their customers and network?
  • Does it help them become a trusted advisor?
  • Does your product or service add value to their other offerings?
  • Does it make their current offering more sticky for potential customers by increasing usage or value?

If you answered yes to any of the above questions, you now know how to sell participation in your program as a win-win. Just add to that an equitable incentive model with a commission or some other form of revenue sharing. The key is to drive partner action by outlining the benefits of your referral program on their business.

Next, you need to get your sales team on-board to send your value prop, and to recruit referral partners. Direct sales has an organic incentive to recruit partners for referrals because they reap the benefit of the resulting leads. So, arm your sales team with the right materials and a simple registration process. You can even get your marketing team involved in delivering recruitment campaigns.

Step 3: Enable Referral Partners

The next step in building out your referral channel is enabling your referral partners by giving them everything they need to be successful. The best way to do this is through a personal referral portal. Here are the six things you need in a portal in order to properly engage your referral partners:

  1. Multiple ways to make referrals
  2. Product content to educate and share
  3. Information on the target buyers, including personas
  4. Clear rules that state how a partner earns incentives
  5. Transparency into the referral activities and reward statuses
  6. Training materials about the program and how to make referrals

Once you have all the pieces in place on the portal, you’ll want to make sure you have a motivating incentive structure in place.

Step 4: Incentivize Referral Partners

There are all sorts of ways to incentives referral partners, but how do you know what’s right for your company? When trying to choose the appropriate reward amount, you should consider the following factors:

  • Do you want to reward higher amounts/percentage of revenue for highest performing partners?
  • Do you want to motivate repeat referrals by having an escalating reward based on the number of successful referrals within a time period?
  • Do you want to vary the reward based on deal involvement or lead stage?

The best way to checkpoint your reward amount strategy is to work with marketing to determine their cost per acquisition (CPA) of a customer coming from inbound efforts. Your referral fee should always come in much lower than the marketing CPA.

Next, you want to consider the following when structuring your reward to meet your business needs:

  • Calculation – This can be a flat bounty, a bounty by product purchased or percentage of revenue. When discussing the amount, you may want to offer different rates for different partner types or deal involvement.
  • Escalation – Setting achievement levels with higher payouts is a great way to incentivize repeat referrals.
  • Timing – If you’ve got a subscription product, you may want to consider a retention period before payout to the partner to make sure the new customer is sticky. In these scenarios, you may want to consider rewarding at multiple stages to keep the partner engaged. For instance, 25% of the reward at purchase and 75% after 6 months retention.
  • Accrual – For highly productive programs, it may make sense to accrue reward payments to reduce transaction fees and provide higher accumulated payouts.

No matter how you incentivize, it’s important that this is all manageable for you. The more you can automate your referral system, the easier it will be to handle. Partners that are paid quickly tend to be happy and more successful.

Step 5: Onboarding Referral Partners

Now that you have your recruitment, enablement and incentives all figured out, you need to create a smooth onboarding process. Here are the six key things you need to do during the onboarding process for referral partners:

  1. Collect necessary information – Things like tax form information, banking information (if needed) and basic contact information.
  2. Educate on the target buyer using personas – Referral partners need to know what types of companies, and titles within those companies, are a fit for your solution.
  3. Train on how to make a one-to-one referral ask – Have a conversation with your partners about the best times to introduce your product/service to a target buyer, and the best way to introduce your product/service.
  4. Train on various ways to input referrals into your tracking systemFocus your training on the use case and value for using each referral method, with special attention on how to make one-to-one referrals versus one-to-many referral blasts. Referral types include lead forms, verbal referrals, email, shareable URLs, social media and print cards.
  5. Discuss what happens to a referral lead once they provide it – Your referral partners need to understand your referral process and how you will be communicating with their prospect.
  6. Educate on referral success criteria, data access and any service level agreements – There’s a lot to consider when trying to determine success criteria and incentives for your program. It’s important that you have clearly defined key performance indicators (KPIs) by which you measure success, and that you are clear in your communications about those KPIs to your referral partners.

Step 6: Keep Referral Partners Engaged

You’ve done the hard work of setting up your program, and recruiting and on-boarding partners. Now you need to figure out how to keep the referrals flowing in. The key here is to make it easy for partners to make referrals, and to give them full transparency into their progress. Here are 7 things you can do to keep your referral partners engaged:

  1. Give regular status updates
  2. Give regular program and success story communications
  3. Involve your sales team to help drive referral activity
  4. Have special promotions (internal and external)
  5. Offer a coaching program to help improve the performance of struggling partners
  6. Offer escalating incentives to help encourage repeat referrals
  7. In addition to money, give non-monetary recognition

Step 7: Establish Key Metrics For Your Referral Partner Program

There are 5 key categories you want to measure in order to get the data you need to optimize and grow the output from your referral partners. Those categories are:

  • The referral pipeline – For this one, look at the number of partners, the number of referrals, the number of successful referrals and revenue.
  • Partner activity – Here, you want to look at the percent of partners that made referrals within a time period, the percent of partners that made multiple referrals within that time period, the percent of partners with successful referrals within that time period, the average number of referrals per partner and the average number of successful referrals per partner.
  • Top performers – Look at top partners by number of referrals, top partners by number of successful referrals and top partners by revenue.
  • Under-performers – To figure out your under-performers look at your lowest partners by number of referrals, lowest partners by number of successful referrals and lowest partners by revenue.

It’s important to note that you don’t want to take action on the data you collect on a daily basis. Instead, you should check it often and keep an eye out for trends or anything that falls outside of your expectations.

Step 8: Scale Your Referral Partner Program

Now that you know how to measure the success of your program and partners, it’s time to grow! To kick off growing your referral channel, it’s important to consider your goals and identify opportunities. Here are some key areas to think about when driving program growth:

  • Do I have great partners, but need more?
  • Am I limiting my growth by making my program too complex?
  • Am I incentivizing my partners enough to keep them motivated?
  • Are my partners becoming disengaged with the program?

If you do find that your partners are becoming disengaged as you try to grow your program, consider automating it (if you haven’t already). Referral program software can remove the operational hassle of tracking, attributing and rewarding referrals. Don’t let this powerful channel go underutilized because you’re still using spreadsheets!

To learn more about building and automating successful referral channels, visit our resource library.

Nurturing Your Long Tail Partners to Maximize Channel ROI

As a channel marketer, you’re likely very familiar with your top channel partners. They are the ones who engage with you often and send you referrals regularly. If your program has a number of active, vocal partners it’s possible they take up all of your time, causing you to ignore a larger more quiet (and sometimes under-performing) segment of your partner channel – the long tail partner.

The long tail partner, sometimes called a low-touch, high-potential partner or self-service partner, is a partner who rarely engages with you but still sends a few lucrative deals within any given year. While many companies view these partners as disengaged or disinterested, and therefore not worth their time, others are seeing the immense value in these partners. In fact, according to Jay McBain, Forresters’ principal analyst, companies are starting to embrace these partners and actively employ referral strategies to turn these partners into a reliable source of growth.

If companies could figure out a way to manage [these] partners even more efficiently – don’t assign a channel account manager, limit access to a rich set of expensive resources, and make all support flexible, automated, and self-service — they could rely on that annual revenue at high profits with no touching and little cost,” McBain said in an interview with Channel Marketer Report.

Companies don’t have to have a love/hate relationship with their long tail partners. By turning these partners into referral (transactional) partners, you can maximize their output while minimizing the time and cost spent trying to engage this segment of your partner channel.

Reseller vs. Referral

Companies with well developed partner programs know that reseller partners require a high investment with an uncertain return. Despite the high investment, reseller partner programs continue to dominate the industry. However, new referral marketing technology (aimed at automating the referral process) is starting to shift how companies think about their resellers vs. referrals. In fact, many companies are now finding that partnerships based on referrals are showing incredible success and challenging the status quo reseller partner programs.

Here are just a few of the benefits an automated referral partner program can bring to your company, your partners and your sales team:

  1. Quality leads: Did you know that 31 percent of referral leads from partners made a purchase? This number jumped to 41 percent when a sales team understands and participates in the referral process.
  2. Shorter sales cycles: Referral deals tend to move faster through the pipeline because they are warm, high-quality leads. In addition, your sales team will have access to the partner who made the referral and that partner can help to prequalify the lead or move the deal forward.
  3. Cost savings: Automation often results in significant cost savings. In a referral partner model, you can scale the large number of referral partners without having to add additional resources to manage, nurture and market the partner channel.
  4. Happy customers: Partners can easily meet customers’ needs with your company’s products and offerings. And because referral leads are the highest quality, partners know they will receive the attention and care they deserve throughout the buying process.
  5. Easy partner management: With an automated referral partner program, sales won’t need to manually track which partner referred whom, and what payment goes where. All of this is automated through the system so the sales team can focus on selling.

You can read more about the benefits here.

Why Automated Referral Programs Are A Perfect Fit

Investing in referral automation software, the kind offered by companies like Amplifinity, can be a great way for companies to provide these transactional referral partners an easy, hands-off way to submit deals. By providing a program that is flexible and automated, you can manage a large number of these partners for little cost with a high return.

For Jamie Mendez, director of channel marketing at IBM, making it easy for transactional referral partners to engage was vital to their program, as these partners are usually digitally-savvy. “Their expectation is they’re going to engage with you digitally,” she said in the same interview with Channel Market Report. “If you’re not up to par digitally, you’re not someone they want to work with anyway.”

That’s why it’s key, when researching referral automation software, to find a solution that fits all of your program’s needs without completely changing your existing workflow. By keeping the mechanics of your program the same, and simply automating the process, you can better automate the experience for these partners and see a better return on the deals they submit, while keeping your top channel partners engaged and happy.

If you want to learn more about referral marketing best practices, check out Amplifinity’s resource library.

The Importance of Referral Marketing

If you’re in marketing or sales you’ve probably heard of referral marketing, but do you understand it’s value? Referral marketing is defined as leveraging the power of different referral sources – like partners, customers and influencers – to target the potential buyers those sources have relationships with in order to drive sales of your products or services. Referral marketing is a powerful tool, and one of the top rated forms of marketing. It’s important to explore its benefits for your company.

Why Referral Marketing

We know from our data, that a referral channel can deliver a higher value when compared to the standard marketing and partner lead funnels. In fact, when there is sales involvement with a referral program, the conversion rate of referral partner leads shoots up to 41 percent, while the conversion of customer referral leads increases to 30 percent. You can compare that to the industry standard conversion rates for marketing (.78 percent) and partner leads (.48 percent), and see there is real value in companies having referral marketing programs. As Shopify points out, referral marketing is so powerful because people trust the opinions of those they have relationships with, “Trust goes a long way when it comes to convincing someone to buy something. If we don’t trust someone, we aren’t going to listen to them.”

Building Your Referral Program

The first step you should take when considering a new referral program, or when revamping an existing program, is identifying and analyzing your potential referral sources. A referral source can be anyone who interacts or has a relationship with your target audience. These sources can include existing partner channels, influencers and your own customers. Companies typically run several referral programs, with each program focused on the specialized needs of the referral source. Keeping your programs targeted helps you control the message your referral sources are using about your company – the way your partners market to their influencers is likely going to be different than the way your customers market to their friends and family. You can find helpful exercises to help you build a proper referral channel here.

Once you’ve identified your referral sources and have built structure around your programs, it’s important to look at how you will be running them. Companies have a variety of ways they run referral programs. Some create their own in-house systems, some manually track referrals in spreadsheets and many of the more successful companies use referral automation software offered by companies like Amplifinity. If you’re unsure if referral software is right for you, try this ROI calculator.

Key To Success

Referrals tend to generate a higher quality of lead when compared to traditional marketing methods, and once a referral becomes a customer, they are more likely to stick with the company. In fact, the Harvard Business Review states the lifetime value of a referred customer is 16 percent higher than that of non-referred customers. Referred customers also churn 18 percent less than non-referred customers. That’s why it’s important to properly incentivize your referral sources. Did you know the average partner reward amount is $182? According to our data, 76 percent of rewards fall between $101 and $1,000, and most are paid out through either check, gift card or ACH/international ACH. For tips on keeping your referral sources incentivized and active, read our blog Referral Strategy: How to keep referral sources engaged.

If you think Amplifinity’s referral automation software might be a right fit for your company, request a demo today.