Referrals have evolved from a simple approach to a strategic channel used by companies to dramatically increase revenue. New data from companies running these types of referral programs show that an average 13% of customer referral leads and 31% of partner referral leads make a purchase. As a result of the increased complexity of referrals and the potential to drive greater revenue from them, many more considerations must be taken into account when designing a referral strategy. As you start to design your referral strategy, before brainstorming any other referral program ideas, consider the referral sources that could be a part of the program.
While you might already have an idea of one referral source who could drive or is currently driving referrals to your company, there may be some that you are missing.
“With 65 percent of b-to-b organizations including indirect channels and partners in their go-to-marketing strategy and an additional percentage looking to the channel for additional revenue growth, the channel is critical to the future success of a growing majority of b-to-b organizations across multiple industries,” said Kathy Contreras, Senior Research Director of Channel Marketing Strategies at SiriusDecisions. “The ability to leverage referral partners for that growth offers a great opportunity, especially as referral programs offer expansion beyond the typically targeted partners; this can offer many organizations a new or expanded route-to-market.”
Along with partner types like strategic partners, ISVs, integrators and many more, partners can be any influencer of your business. These influencer could include agencies and consultants that are able to identify a need for your product or service in others. In order to not miss out on generating revenue from any referral source, gather your sales, marketing and channel teams, and use these two steps to pinpoint who your referral sources are.
Step 1: Referral ideas to identify new referral sources
To identify all of your possible referral sources, get input and referral ideas from the different departments inside your company. Use these nine question to get direction:
1. What companies have a complimentary product that sells into your same target buyers?
- Referral strategy tip: This could be integration partners or just companies selling into your same group of buyers.
2. Who do your target buyers interact with professionally?
- Referral strategy tip: If you are selling to SMBs, there are many trusted advisers to consider, such as their accountants and bankers.
3. What associations do your target buyers belong to or trust?
- Referral strategy tip: Local associations and chamber groups are often a key way that small businesses network.
4. Are there any purchases that typically happen in coordination with yours? If so, what are they?
- Referral strategy tip: When someone buys marketing automation, they may buy a webinar platform. Or when someone buys VOIP telephony they may buy a video conferencing platform.
5. Are there any consultant groups or agencies that are typically engaged in advising on a purchase decision in your area or a process that is complementary to your offering?
- Referral strategy tip: From niche consultants to goliaths, there may be players that are influencing your target buyers.
6. Are your target buyers part of a franchise model?
- Referral strategy tip: If so, the franchisors have direct access and significant influence worth pursuing.
7. Do you have existing resellers that are struggling with performance?
- Referral strategy tip: These resellers could be transition to referral partners.
8. Do you spend a lot of effort certifying new resellers only to have them underperform?
- Referral strategy tip: A referral program can be a qualifying step for a reseller. This ensures they produce quality leads before the time is spent to make them a reseller.
9. Do your customers have access to your target buyers in other companies?
- Referral strategy tip: Customers can be partners too.
To help guide you, try downloading and filling out this worksheet along with the necessary departments.
Or fill it out right on this page for your own knowledge.
Step 2: Group your referral sources into programs
Following the identification of all your potential referral sources you will need to group them into programs. This will be based on whether or not your referral sources are individuals or companies where employees will be the referral source. It is very important to think about the language and incentives that will drive each referral source. If a referral source needs a unique incentive or branding, this might justify creating a separate program for that referral source.
For instance, a customer might be incentivized by a flat bounty such as a gift card while a partner may expect a percentage of revenue paid through electronic transfer. By grouping referral sources by their messaging and incentive, you ensure the creation of a program that will deliver the most ROI.
If you can’t take on more than one program at a time prioritize your programs by:
- Whether or not you have an existing relationship with the referral source
- How fast it would be to get the program to market
- The potential impact on revenue
Download the worksheet to help with this step or download the complete Referral Guidebook with all 20 exercises to help you build a revenue generating referral channel.