Referral strategy: Create a plan for enabling your referral sources

Now that you have identified your referral sources, developed your recruitment strategy and created a sales enablement plan, it’s time to create a referral strategy for enabling your referral sources.

Once a referral source has registered, they need to have access to a portal that not only gives them the functionality to refer, but provides them with all the information they need to make an informed referral.

To do this, start by developing your target buyer profile if you haven’t already.

Developing a target buyer profile for your referral strategy

A key component in enabling your referral sources is ensuring they understand your target buyer profile. Creating this kind of content means first breaking down the traits of your target company into straightforward categories. Let’s start with these six steps.

Step-1: Layout how big your target company normally is. This involves listing the typical revenue range of your target company and the number of employees they normally have.

Step-2: List the industries you most commonly target.

Step-3: Name the type of offering your target companies normally have. This could be:

  • Simple products
  • Simple services
  • Complex products
  • Complex services

Step-4: Figure out what your target company’s typical go-to-market model is. For instance:

  • Brick & mortar
  • eCommerce
  • Direct Sales
  • Resellers/distributors

Step-5: Figure out if there are any key technologies a target company uses or offers.

Step-6: Evaluate your different target companies’ presence relative to competitors. Are they small, medium or large? And are the companies you’re targeting experiencing declining, sustaining or growing revenue?

Once these questions are answered, you can move on to breaking down the key traits that define the buying unit or department of your target companies.

For this, focus in on who the buying department is and ask yourself these six questions about that department:

  1. What are their key needs and challenges?
  2. What are their goals?
  3. What situation/behavior is a signal of need/intent to buy your solution?
  4. What alternative solution are they using today?
  5. What is the value your solution offers relative to the status quo?
  6. Who are the key titles involved in the purchase and the role they play?

Answering these question will help to ensure that you are enabling your referral sources with all the information they need. If you need further help, try downloading and filling out the full interactive worksheet to construct your in-depth target buyer profile.

Create training content for your referral sources

Once you have created your target buyer profile for your referral sources, there are still a variety of different enablement resources that you can provide through your referral software portal. This will ensure your referral sources can communicate the right message to a target buyer and make proper use of your referral program. Here are the different types of content you can create:

  • Product description – Write a description of the product or service you want your referral sources to refer.
  • Value proposition – Develop content that will help a referral source communicate the specific value of the product or service that applies to each individual target buyer.
  • Customer-facing product info – Offer content that the referral source can share with target buyers to grow their interest and get them to agree to a meeting.
  • Incentive rules – Create incentive information that informs referral sources on how they can earn incentives and grow their incentive.
  • How to make a one-to-one referral ask – Not all referral sources will know the best ways and time to ask for a referral. If you are including social media in your program, it is especially important to reinforce the ways it can be used to make a one-to-one introduction versus an awareness blast.
  • How to ensure the referral gets entered – To avoid any lost referrals, provide information that reinforces the different ways referrals can be entered into the system and tracked.
  • What happens to a referral lead – Referral sources want visibility into what happens after they make a referral. Provide them with an overview of the process – who the lead gets routed to, how it’s handled, what happens if it is unqualified, the various points at which they will receive updates on the sales process progress and what happens when the referral makes a purchase. This includes how and when they are going to get paid.
  • How a referral source can access their data – Referral sources need transparency into the status of their referrals and rewards earned/paid. Let them know how they can access this information so you don’t get calls wondering what happened to a referral.

To help guide you through this portion of referral source enablement, download the full worksheet or download the all 20 exercises from, The Referral Guidebook, to create a revenue generating referral channel.

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Referral Strategy: Identifying potential referral sources in 2 steps

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.

20 tweetable customer referral program stats

More and more companies are automating their customer referral programs through referral software to grow their lead generation at scale. To understand how these companies referral programs are performing,  20 tweetable stats are provided. These stats come from the data report, The State of Business Customer Referral Programs. The data from this report was based on millions of referrals made on companies’ customer referral programs run on the Amplifinity platform.

The power of referral programs for lead generation

1.

The verbal referral method is used 13% of the time and has the highest conversion rate (32%). Click to Tweet

2.

Lead form referrals are used 23% of the time to refer and have a 19% conversion rate to deals. Click to Tweet

3.

Email is used to refer 24% of the time and has a 17% conversion rate to deals. Click to Tweet

4.

Social media is the most used referral method (29%) but is the least converting (1%). Click to Tweet

5.

Print cards are used to refer less than 1% if time but has a 12% conversion rate to deals. Click to Tweet

6.

The shareable URL referral method is used 12% of the time but only has a 4% conversion rate. Click to Tweet

7.

Customer referrals converted 3x (13%) more than the referral industry standard (3.63%). Click to Tweet

8.

Customer referrals with sales involvement increase deal conversions to 31%. Click to Tweet

9.

61% of customers make 1 referral. 34% make 2-10 referrals. 5% make 11+ referrals. Click to Tweet

10.

Active customers produced an average of 0.87 referral leads/year. Click to Tweet

11.

Customers with previously successful referrals produced an average 2.5 referral leads/year. Click to Tweet

12.

Top 1% of customers making referrals made 22% of referrals resulting in 1% turning into… Click to Tweet

13.

Top 10% of customer making referrals made 54% of referrals resulting in 6% turning into deals. Click to Tweet

14.

52% of customer referrals reward with gift card, 29% checks, 9.5% bill credits and 9.5%… Click to Tweet

15.

52% of referrals reward with gift card, 29% checks, 9.5% bill credits & 9.5% swag. Click to Tweet

16.

6% of referrals with rewards 1,001 - $2,500 converted to deals. Click to Tweet

17.

5% of referrals with rewards $101 - $1,000 converted to deals. Click to Tweet

18.

13% of referrals with rewards $41 - $100 converted to deals. Click to Tweet

19.

The average customer referral reward amount among programs was $111. Click to Tweet

20.

82% of referral rewards were between $41 - $100. Click to Tweet
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8 Stats/Quotes that prove referral software speeds up your sales pipeline

How Salespeople can close leads faster with referral software

B2B salespeople don’t have it easy. Take the stress of survival and the monotonous repetition of a time loop from the movie, Edge of Tomorrow and you have a sense of a salesperson’s job. While salespeople can generally deal with the pressures their job entails, the lengthening of the sales pipeline has made it increasingly difficult. A great deal of effort is spent on finding a way to speed up the sales pipeline in an attempt to increase sales productivity and therefore revenue. But the simplest solution is to improve the quality of the leads entering the pipeline. Companies that have realized this are turning to referral software to scale collection of the fastest moving leads through the pipeline.

By itself, a referral comes in more qualified and so decreases the sales cycle as a result of:

  • The lead being handpicked by someone who knows your product and the value it can bring.
  • The prospective buyer coming to you from a trusted source makes them 400% more likely to buy, (Nielsen).
  • The salesperson knowing the person who made the referral which gives them the ability to call them up, learn more about the prospect and get a warm introduction.
  • Prospects who come in via a referral tend to bring less competitors into the buying cycle as they already trust that your solution is the best choice since it was recommended to them.

By adding referral software to the mix it increases the number of referral leads that come in and shortens the sales cycle further by automating incentives, nurturing, and attribution of the referral lead. It also provides advanced customer and partner insight, along with aligning sales and marketing in one program. The sales enablement that referral software facilitates syncs up marketing and sales data and allows sales to add precision to their sales strategies to organize leads by quality and pursue them. This gives Sales the tools to close more deals faster and reduce the sales pipeline.

But don’t just take my word for it. Below are ten stats and quotes that prove referral software speeds up the sales pipeline.

Prove referral software shortens the sales cycle with 8 stats/quotes

  • Companies that are “Optimizing the marketing/sales relationship grow revenue 32% faster than companies that do not. As a result the most competitive sales teams are enabled by marketing, and the most competitive marketing teams are completely in sync with sales.” (Aberdeen, In Marketing/Sales Alignment 2016: Who is Agile Enough to Win?)
  • Pipeline acceleration strategies benefit from quicker sales cycles. Advocacy can help improve overall productivity for the sales force, enabling a much more efficient sales selling environment and helping sales close more deals, which is what they want to do,” (Bob Peterson, Senior Research Director, SiriusDecisions, How to Climb to Smarketing Success).
  • By implementing technology that empowers a 360 degree customer view there was, “13.2% average year-over-year decrease in (improvement in) the average sales cycle time, vs. 1.0% and 1.9% respective increase in (worsening of) sales cycles for Industry Average and Laggard respondents.” (Velocify, How Best-in-Class Sales Teams Convert More Leads).
  • Partnership relationship/channel management technology users report a lead acceptance rate that increased by 3.6% year-over-year compared to a decrease of 0.1% by non-users decrease, (Aberdeen, Sales Effectiveness 2015: How in the world are we going to hit our number?).
  • “Customer advocacy can support demand generation by increasing the velocity of identified deals. Referral deals move faster through the pipeline,” (Bob Peterson, Senior Research Director, SiriusDecisions, How to Climb to Smarketing Success).
  • Partnership relationship/channel management technology users report reps achieving their quota increases by 3.3% year-over-year compared to 0.4% of non-users, (Aberdeen, Sales Effectiveness 2015: How in the world are we going to hit our number?).

Prove the value referral software can have on your sales pipeline. Try out the ROI calculator now to discover how referral software can dramatically increase your sales productivity and revenue.

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Originally published on Salesforce.com

Quick Tip: How to better qualify resellers

If you have a reseller program, you know how much work it takes to get resellers qualified, trained and enabled. It’s worth it if they add to your revenue stream. But what happens when they don’t? They promised you that they had access to your target buyers and that their team was on board. Unfortunately, there isn’t much you can do beyond call it a sunk cost and move on to the next potential reseller. If this is a far too frequent scenario for you, it may make sense to consider a new approach to qualifying potential resellers – a referral program.

Ryan Morris, principal consultant at Morris Management Partners found in his research that “Everybody is churning, and yet [resellers] tend to churn and ramp and onboard very slowly, because there’s a lot of false starting.” 

By establishing  referral partner programs, you can both enable lower tier partners to be productive for you while also using it as a proving ground for potential resellers. Before you spend the time training and certifying, make sure they actually have connections with and influence over your target buyers by having them supply your sales team (or another reseller) with leads. Track these leads to a purchase and compensate these referral partners with a bounty or a percentage of revenue of the deal. Once the potential reseller reaches a threshold of successful referrals within a set time period, they will earn their right to become a trusted reseller.

With this extra step in the process, you’ve trained the reseller through the referral program on who your target buyer is and through reporting back to the reseller, they can see exactly which referrals lead to a purchase. Around 45% of channel companies pointed to their top pain point being the difficulty of doing business with vendors, (Channel Insider). But by qualifying resellers with a referral partner program they’ve got a head start going into training. Additionally, your team is more motivated to get them up and running quickly, because you know with certainty that they will be productive.

So what about the partners that never qualify with enough productivity? Well, they can still be a lower tier referral partner who occasionally brings in referral leads. This still adds to your revenue stream and compensates the partner for bringing forward that relationship. The more “failed” resellers that you have, the stronger the pipeline of your direct sales team. This makes sales happy and makes the channel team happy that they didn’t waste their time on training these partners to become resellers.

Citrix GoToMeeting referral partner program

How FinTech lenders can disrupt the banking disruptors with referral marketing

Why are FinTech companies turning to a scalable referral marketing program? It’s no secret that business in general is changing fast for the financial industry and FinTech (financial technology) is no exception.  While FinTech companies (like Lending Club, CommonBond and Kabbage) originally focused on stealing small and medium sized businesses (SMB) away from big bank lending, the amount of underwriting big banks require for each loan does not give SMB loans the appealing return on equity (ROE) it once did. Therefore, it’s no surprise that many have decided to step back from smaller SMB loans.

So what does this mean?

It means that while FinTech lenders are out running some of the traditional financial institutions they now need a newer and better way to disrupt the alternative lending world. That’s right. They need to disrupt the disruptor.

After all, even though some of the competition is being reduced in the big bank world, it doesn’t mean that the large number of FinTech lenders have stopped growing or getting any less determined.

But how do you disrupt the disruptors?

FinTech lenders need a highly charged customer acquisition channel. But even though many of the big banks may not be FinTech lenders’ biggest competition any more they have had years to establish SEO keywords and PPC. Which means that it will be very hard if not nearly impossible to surpass them in organic search or PPC. In fact many of the traditional channels have such a high volume of traffic already and have been mined so thoroughly that it is very difficult to make a real mark with them.

Instead, when trying to create a powerful channel for customer acquisition focus on 3 keys in order to break through the noise of your competitors.

  1. Establish a proprietary channel
  2. Ensure your channel is data-rich
  3. Confirm that your channel integrates with your current technology

One such channel that covers these 3 bases and empowers customer acquisitions is referral marketing.  Automated referral marketing software gives FinTech lenders the ability to optimize customer acquisition along with taking on other challenges in addition to finding new lenders and borrowers. This includes conquering 2 main obstacles that face FinTech lenders.

  1. Become more efficient through automation, to scale the business and increase revenue
  2. Delivering a superior customer experience

Automated referral marketing programs do this by incentivizing Advocates to make a trusted introduction to their peers and have therefore been proven to:

  • Convert leads 4X better than traditional marketing (emarketer)
  • Decrease churn by 18% compared to non-referred customers (Harvard Business Review)
  • Increase LTV by 16% compared to non-referred customers (Harvard Business Review)
  • Have a conversion rate of 36% from referral to new customer for a financial service company (Amplifinity Financial Service case study)

And for FinTech lenders, there is more than one way to take advantage of referral marketing programs. Along with the traditional customer referral marketing program, a partner referral marketing program can prove to be very advantageous for FinTech lenders. Since as previously stated, many big banks no longer find it worthwhile to pursue SMB loans and small personal loans, they are primed to become a partner. A scalable automated partner referral marketing program enables FinTech lenders to take advantage and leverage financial institutions to refer lenders and borrowers that don’t meet their qualification but would fit securely into a FinTech marketplace lender’s preferred demographic.

But what would motivate bigger financial institutions to refer? Bigger banks and finance companies have long been trying to improve customer engagement and experience. Referring leads to a FinTech lender would appeal to a financial institutions since it would provide them with a way to give customers and prospects a more full service offering that improves their image and meets a wider group of customer and prospect needs. In addition, FinTech marketplace lenders can provide referrals back to partners and offer an incentive if a bank or financial institution’s referral becomes new business.

With the right channel, a FinTech marketplace lender can be a disruptor among the disruptors. Discover what your ROI could be from both a customer and partner referral marketing program with the ROI calculator today!

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