Building a Referral Partner Channel: Step 3 – How to enable referral partners

The next step in building your referral partner channel is to ensure that you are enabling referral partners with all of the information and capabilities they need to be successful. Right after registering, the referral partner should be sent to a personal referral portal that enables them to get all the information they need from you to make a referral, provides them the mechanisms to make referrals and transparency into their referral and reward stats.

Deliver referral partners a personal referral portal with:

  1. Multiple ways to easily make referrals
  2. Product content to educate and to share
  3. Information on target buyer including personas
  4. Clear rules for earning incentives
  5. Transparency into referral activity and reward status
  6. Training materials on the program and how to make referrals

1. Provide multiple ways to easily make referrals

According to, The State of Business Partner Referral Programs – Annual Report, there are six methods that partner programs utilize to make referrals with varying degrees of use and success (see chart below). Poll your partners to determine the ways they connect with their network/your target buyers. For instance, which social media channels would make sense to offer? Minimally, you’ll want to offer Lead form, shareable urls and a way to collect verbal referrals as staples for your program. These are the most successful methods at driving leads that turn into new business. Here are the six referral methods:

  • Lead form – A form filled out with contact info once your referral partners have had a conversation with prospects to qualify them.
  • Verbal referrals – If direct or partner sales teams are involved in recruiting referral partners and collecting referrals, make sure you have the mechanism to collect this information and input it into your referral system to be tracked.
  • Email – Provide emails preloaded with your value proposition that a referral partner can then personalize and send to their contacts.
  • Shareable URL – Provide the ability to create a personal, trackable referral link that partners can place on their LinkedIn profile, business website, email signature, blog post or in a direct text message.
  • Social media – If your referral partners are connected to your target buyers via social media, then give them the tools to share your value proposition in social media. The more functionality you can provide to allow them to post/message to an individual, the better results you’ll get.
  • Print cards – A printed referral card with the personal url/tracking code on it can be a great way to bring offline conversations on line. With the value proposition already on the card, this can be an excellent leave behind for face-to-face encounters.
partner leads, partner referral program, partner network, referral partners
Most used referral methods by partners, The State of Business Partner Referral Programs – Annual Report

2. Give them product content to educate and to share

The best way to ensure that your value proposition is reaching the referral is to lock it into the referral methods. Additionally, you’ll want to provide key content pieces that your referral partners can share as well as content to educate your partners enough to qualify for fit and make the recommendation. Don’t overwhelm, just provide the key staples in simple, easy to digest format. At bare minimum, provide a pdf overview as well as an explainer video.

3. Clearly define your target buyer and provide persona profiles

The quality of referral leads are only as good as the information you provide your partners on who you want in your pipeline. Right on their personal referral portal you’ll want to give them the following information:

  • Target company profile: Industry, size, relevant technographics, any known triggers for needing your product or service.
  • Key personas within the target company: department, titles, job responsibilities, role as influencer, buyer, champion, etc.

Make this information easy to access – I recommend on the portal homepage – and easy to understand (use graphics and videos).

4. Provide clear rules for earning incentives

The best way to get activity from referral partners is to make them very aware of the value they get in making the referral. Yes, this may help position them as a trusted adviser and allow them to add value to existing customers, but fundamentally this comes down to the referral fee. Referral partners need to clearly understand the incentive and any hoops they need to jump through to earn it (I’ll cover incentive models in the next article in the series). Blatantly advertise the incentive on their personal referral portal and spell out any rules so that there is no confusion or argument over achievement. And if you’ve got a specific SLA or stretch goal, show them where they are on their way to achieve it.

5. Provide transparency into referral activity and reward status

The last thing you need is to be fielding emails and calls from partners wondering where their reward is. Enable all of the referral tracking to flow in real-time to their personal referral portal. Also, send an email when a referral changes status so that your partner is aware. The data in their portal should include:

  • All referral activity – Who they’ve made referrals to and which referrals are still open, have been accepted or rejected.
  • Referral status – Once a referral is accepted and qualified, make sure they can see the progress through the pipeline so they can help support the process.
  • Successes – When a referral makes a purchase, notify them of this via email, but also show this in their portal as well as the incentive earned.
  • Reward fulfillment – Provide the details on the payment of rewards earned.

6. Provide training materials on the program and how to make referrals

I cover training in a future article for onboarding referral partners. But fundamentally, there is no way you will be able to personally train each referral partner. Make sure you include in their personal referral portals training videos/materials on the following:

  • The rules for earning incentives
  • The target buyer profile – including personas
  • How to make a one-to-one referral ask
  • The ways to input referrals into tracking system
  • Info on what happens to a referral lead once they provide it
  • How to access referral activity data and reward fulfillment status

Use technology to enable referral partners

Using technology to enable referral partners is key to getting the scale needed to impact company revenue. Make sure the technology you select makes it as easy as possible for you to deliver these capabilities and information to your referral partners. Additionally, make sure it is white labeled and integrated via SSO into your web properties so that it is a seamless experience for your partners.

Once you’ve got the key enablement pieces in place, you’ll want to build a motivating incentive structure for your partners. Discover best practices for structuring incentive models and fulfillment for referral partners in the next article in this series.

Previous articles in this series:

Step 1 – How to identify potential partners 

Step 2 – How to engage and recruit partners 

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 referral partner programs outperform resellers

The success of partner programs in B2B companies is highly variable. Many companies try various approaches, but what starts as a promising opportunity, often ends in unmet expectations from both companies in the partnership.

After all, the idea of extending lead generation reach and sales coverage without adding headcount is appealing. And although partnering is a great model in concept, the execution is very difficult. The reality is that you are constantly trying to train and onboard Partners in order to make sure that they understand the differentiated messaging and sales techniques necessary to effectively sell your product. In addition, servicing the relationship post sale introduces an entirely different set of challenges such as how to nurture customer relationships to deliver a continued revenue stream.

Putting it all together is  an extremely big task and one that takes a significant amount of resources to achieve success. But thanks to new referral marketing technology entering the market, we are starting to see a shift in partner strategy. Specifically, partnerships based on referrals are starting to show incredible success and are challenging the traditional mindset of resale oriented partnering.

Resale = high investment with uncertain return

With reseller partnerships you are faced with the development of detailed contracts that cover all aspects of a complex relationship. But, that’s just the beginning. Once the partnership execution begins, you’re faced with the task of onboarding and training the Partner’s marketing and sales teams and the difficult task of maintaining mind-share as other priorities of the Partner inevitably surface.

Success requires the same time and budget as direct selling efforts, but often with worse results. Why? Because Reseller Partners don’t see your product as the primary way to achieve quota. They aren’t looking for opportunities for your product. Instead, your product is simply an afterthought until an obvious need is exposed by their Customer.

Also, consider the end Customer‘s perspective. Do they have to go through the Partner as a middleman to get support? Are they getting the same care and nurturing as your direct-sale Customers? When the time comes, will they be an Advocate for your business and provide the word-of-mouth recommendations that are so vital to the success of your business? The answer is probably not.

Referral partner programs have challenges too

Referral partnerships have existed for centuries. With this model, instead of a full reseller arrangement, you use Partners primarily as a way to extend lead generation. As Partners come across situations where a need for your product is identified, they refer the lead to you. Your team then engages in the relationship, takes the driver seat on the sales process and ultimately, makes the sale. This fixes a few key issues with the reseller model. You now have a much simpler contract (if any) and you don’t need to deeply train the Partner on how to sell your product or service

However, a few problems remain with referral partner programs and a few new ones arise as a result.

First, you still need to have a way to stay top of mind with your Partners. You also need to make sure you have a simple way to track, incentivize and manage this relationship. For example, how does the Partner stay informed of the status of the referral so they can help the opportunity progress?

And, relative to incentives, will you pay the Partner per lead or when a sale closes? If it is only when a sale closes, how do you trigger the event so that you can fulfill the reward and ensure the partner get’s compensated quickly and correctly?

The reality is that much of this is done manually and that limits the output of a Referral Partner.  While Referral Partners can produce great in-market leads they are difficult to scale.

Because both models have strengths and weaknesses, I see companies trying to do a bit of everything, with limited success.

The rise of referral partner programs managed at scale

The advent of software to manage referrals has tipped the scale strongly in favor of referral partnerships. With the ever increasing pressure to generate ROI from your partnership efforts, my advice is to get there and get there fast.

Here is my take on how automated referral partner programs can benefit all parties involved while being a consistent generator of high quality leads.

Benefits of automated referral partner programs to your company

  1. Quality leads: This one is pretty obvious. You already know that referrals from Partners are great leads, but with referral marketing software you get a consistent flow at a larger scale than ever before. In fact in a recent benchmark study 31% of referral leads from partners made a purchase. This number increased to 41% when sales was involved in the referral process.

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 2. Shorter sales cycles: It’s a proven fact, referral deals move faster through the pipeline. It isn’t just that they are higher quality. Your sales team also has access to the Partner who made the referral so they can prequalify the opportunity and enlist their help in making the sale.

Improved customer experience: From first contact with your product through the entire customer journey, you are now in the driver’s seat to achieve customer success. This makes for a great customer experience, but it also means that your customers can be leveraged later to give you positive mentions in social media and refer your product to their peers. And that means more high quality leads.

4. Cost savings: With automation comes significant cost savings. In this model, you can scale the number of Referral Partners without adding headcount because everything from operational management, to nurturing communications, through to reward fulfillment is automated. Additionally, you no longer have the resource-intensive training nor the co-marketing costs from the Reseller Partner model.

5. Better data: With all of your referral partner programs activity managed with referral marketing software and integration into your sales CRM (e.g Salesforce), it is easy to see direct ROI from Referral Partners and prove the incredible value of the channel.

Benefits of automated referral partner programs to your Partners

  1. Added revenue/income: Depending upon whether you structure your program to reward the partner entity, the Partner Advocates (typically Sales Reps) or both, the outcome is the same. Your referral program provides an easy way to get rewarded for relationships they already have.
  2. No hassle: With nurture emails and a personal web page, Partners can see their referral activity and reward status. The result is that the Partner feels informed and views the relationship with your company as low friction. And when Partners have confidence in your system, they’ll refer more.
  3. Happy customers: Partners are able to easily extend their offering to your product or service to provide solutions that meet the Customer’s needs. And referral leads are the highest quality, so Partners know they will receive the proper attention and care during the buying process.

Benefits of automated referral partner programs to your sales team

  1. Fast leads: No one is more appreciative than Sales of referral leads. They can skip the emailing and calling to try to get a prospect. The Partner has all the information needed to get the opportunity generated and can even help Sales drive it through the pipe.
  2. No new systems: With all of the referral data in the sales CRM, Sales doesn’t have to learn a new system. With fast access to referral lead and Partner Advocate information in the system they use every day, they are more productive.
  3. Easy Partner management: What Sales doesn’t want is to have to track which Partner referred whom and fight for them to get paid. With all of this done for them, they can focus on what you want them to – selling!

Benefits of automated referral partner programs to your Customers

  1. Need resolved quickly: When a need is identified by the Partner, it can be resolved quickly with your product or solution without the Customer having to go through the hassle of blindly scouring the internet for the right product to buy. This saves them time and hassle.
  2. Work with a trusted advisor: Another reason referral leads move quickly through the pipeline is that the interest started with a recommendation from a trusted source (the Partner). Customers who get a recommendation from a trusted source are much more likely to buy.
  3. Great support: Since the entire customer relationship is managed by you, referred Customers get the same great support that you provide all of your Customers.

Turn your partner relationships into revenue

Because of the benefits to all parties, savvy Channel Managers are making a transition away from Resellers to referral partner programs managed with  software specifically made to handle these kinds of relationships. With a low cost automated system you can maintain or reduce  the cost of your channel team while simultaneously growing the direct revenue coming from the channel.

Discover how powerful referral marketing software could be for you with the ROI calculator (Warning: May cause your referral partner program to drive revenue at an extreme speed).

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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:

referral strategy, referral sources, partner program, sales enablement

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:

referral sources, referral strategy, strategic partner program, referral partners, referral partner program

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:

referral strategy, referral sources, referral partners, referral partner programs

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.


referral software, referral program, referral strategy, referral marketing, referral partner program, referral sources

Referral strategy: Ideas to recruit and motivate referral sources

Once you have identified your referral sources, you’ll need to construct a referral strategy for recruiting and motivating your sources. If you have an existing relationship with your referral sources (like customers or existing partners) then sales can help recruit. If there is no relationship with the referral sources, a formal marketing campaign may be in order to attract referral sources to your program.

However, even if you create the most thorough recruitment campaign, it won’t be very successful if it isn’t motivating.

To ensure your program is motivating, start by creating a strong value proposition.

6 questions to create a strong referral program value proposition

Successful referral programs have a win-win for the company and its referral sources. To lock onto the most motivating value proposition, consider these six questions about your referral sources.

  1. Does recommending your product/service put them in a good light?
  2. Does it help to be perceived as a trusted advisor?
  3. Does your product/service add complementary value to their offering?
  4. Does your product/service make their offering stickier by increasing usage or value?
  5. Does a customer having your product/service help them make more money through value-add services or offerings?
  6. Will the referral source be motivated by a financial incentive?

To assist you in turning the answers to these question into a value proposition, download the worksheet. Additionally, take a look at recommendations on Developing a Compelling Channel Partner Business Proposition from SiriusDecisions analyst Stephanie Sissler.

In regards to question six, we know that most (if not all) referral sources expect a financial incentive. We then must ask ourselves – what level of incentive motivates a specific referral source, and will provide a high ROI?

Your strategy for calculating referral incentives

To start calculating a motivating incentive for a referral source, you’ll need to calculate the cost per acquisition (CPA) of your inbound marketing efforts using the following formula.

Take a year of your total marketing spend and add it together with the total cost of marketing resources during that year. Then divide this by the total number of new customers generated by marketing that year. This is your CPA. Use this number as the maximum threshold for your incentive to maintain a high ROI.

In the SiriusDecisions whitepaper, Keys to Engaging Referral Partners, they find that typical referral fees fall between 5% and 25% of first year revenue.

To see what fits your company, take the average first year of revenue from a customer and multiply it by 5%, 10%, 15%, 20% and 25% to see what the incentive amount would be. If any of them are greater than your current CPA you can remove it from the mix. Ideally, the incentive will be significantly lower than your CPA.

The other option is using a flat bounty. Try using the calculated incentive amount from the above equation for direction.

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

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

When you are done calculating your incentive, you can test your program ROI using the free referral ROI calculator.

Lastly, to see how reward structure 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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How to improve reseller productivity with a referral program

Reseller and agent programs are undergoing heavy scrutiny from CEOs. Searching for revenue growth, CEOs want to know if the channel can provide it, yet they are also noticing that traditionally strong resellers are struggling. This means Channel Chiefs are looking for ways to prove the value of this important channel to market.

The answer is to layer on a referral program.

There are some big advantages to running reseller and referral programs in tandem that lead to a more productive channel and corresponding revenue growth. Here’s my list of the top 5 benefits of running a referral program alongside a reseller model.

Top 5 use cases and benefits of running reseller & referral programs together

  1. Make the referral program a qualifying step for resellers – This allows you to validate that a potential reseller actually has access to your target buyers and influence on their purchasing decisions. Once a referral partner meets your requirement for successful referrals, you can then go through the certification process knowing it won’t be a waste. Additionally, by participating in the referral program, the partner has already gotten basic training on your target buyer and value proposition.

Key Benefits:

  • Saves time/resources in certifying only productive resellers.
  • Saves time/resources in training resellers on the target buyer and value propositions.
  1. Use the referral program to attract potential resellersReferral programs are an easy way to begin to form a relationship with potential resellers that is less risky for both sides. The partner can quickly find out how easy it is for them to work with you and find in-market buyers without spending their time on certification that might not pan out.

Key Benefits:

  • Recruit more partners (and potential resellers).
  • Provide partners a great impression of how easy it is to work with you.
  1. Use the referral program to identify potential resellers – Many referral partners start as programs for individuals to sign up for. This is particularly true if you have a territory model for your direct sales team and they are recruiting influencers in their territory to become referral partners. Understanding the referral performance of these partners can lead to identifying potential companies to form managed relationships with – either as a referral or resale partner. This saves time and money in going after the right partners since they have a proven fit for your business model.

Key Benefits:

  • Provides data to demonstrate which companies would be profitable resellers.
  • Saves time and money searching for new resellers.
  1. A referral program makes it easy for resellers to refer – There will always be times when a reseller identifies a potential buyer but isn’t in a position to make the sale due to conflict of interest or lack of the right skill set or solution. Having a solid referral program that is easy for resellers to use allows them to clearly make a referral and get rewarded for it instead of fumbling with deal registration exceptions.

Key Benefits:

  • Reduces exception handling for tracking non-resell contributions.
  • Gives resellers confidence they will be fairly rewarded for non-resell activity.
  1. Transition underperforming resellers to referral partners – Products and buyers change and sometimes resellers can’t make the transition. Running a referral program alongside reseller provides an outlet to move underperforming resellers to referral partners. This allows you to still get great leads from them, but save money on recertification that doesn’t produce closed deals.

Key Benefits:

  • Provides a low-cost way to still get revenue from struggling resellers.
  • Saves time and money to recertify underperforming resellers.

If you are running a reseller program without a referral program, you’re missing out on significant revenue and time savings for your team. Beyond the value of your reseller model, referral programs can also be a way for you to get revenue from non-resell partners in your ecosystem. Technology partners, integration partners, services providers, consultants, implementation partners, etc. all interact with your target buyers and could all be making referrals to your offering if enabled to do so. There are so many benefits to adding a referral partner program to your channel – make it a priority this year.

And to see how referral partner programs are driving revenue for companies, download the benchmark report, The State of Business Partner Referral Programs.

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