Building a Referral Partner Channel: Step 7 – Key metrics for a referral partner program

Once you’ve got your referral partner program running, you’ll want to collect data that will help you to optimize and grow the output from your referral partners. To do this I will outline a number of metrics that aren’t merely to measure against but actionable as well.

5 Key categories of metrics for a referral partner program:

  1. The referral pipeline:
    1. # of partners
    2. # of referrals
    3. #  of successful referrals
    4. revenue
  2. Partner activity:
    1. % of partners that have made referrals that period
    2. % of partners that have made multiple referrals that period
    3. % of partners that have had successful referrals that period
    4. Avg # of referrals per partners
    5. Avg # of successful referrals per partner
  3. Top performers:
    1. Top partners by # of referrals
    2. Top partners by # of successful referrals
    3. Top partners by revenue
  4. Under performers:
    1. Lowest partners by # of referrals
    2. Lowest partners by # of successful referrals
    3. Lowest partners by revenue
  5. For those running a to and through partner program – you’ll want to look at the referral pipeline by partner entity as well.

1. The referral pipeline

Understanding the flow of referrals from partners and their employees to closed won revenue is important for seeing trends. Additionally, this is your direct ROI to demonstrate the clear value of the program to executive leadership. You’ll want to have this data and manipulate it by the current time period as well as chart it over time to see trends.

You won’t take action on this data on a daily basis, but it is important to watch if something falls outside of your expectations or is under performing relative to business objectives. If so, start diving into the metrics below to diagnose possible issues.

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2. Partner activity

Continuous engagement and promotion is important to keeping partners referring. Monitoring their activity levels is key to knowing when an additional nudge is needed or a full out calling campaign from channel sales to encourage repeat referrals. Keeping tabs on both percentage of partner activity as well as monitoring averages will help you to identify overall performance problems that you can address holistically.

3. Top performers

It’s great to know the overall trends for your program, but there is incredible value to identifying top performing referral partners. This is an opportunity for personalized recognition or expansion of the relationship. As with any marketing activity, it pays to focus on the best performers and give them additional resources to get even more out of them.

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4. Under performers

While it is great to spend time with top performers, there are some very basic course corrections that can be made with under performers that can keep them engaged and get them successful. My favorite report is partners who have made a lot of referrals, but haven’t had any make a purchase. Chances are these partners don’t understand your target buyer or they aren’t positioning your product value correctly. A simple email and follow up calling campaign to have this discussion can go a long way to save these partners from getting frustrated and churning.

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5. Referral pipeline by partner companies

If you’re running a referral partner program where you have a relationship at the corporate level to enable their sales team to make referrals to you, of course you will want to look at performance by each partner entity. Understanding how many employees they have enrolled, the activity level and success rates is key to encouraging that partner to help you internally promote. Certainly, if this is a managed relationship with SLAs, you’ll want to play close attention to their progress so you can make a call as needed to bring their attention to lackluster results or to call and recognize them for going above and beyond expectations.

What about referral partner program incentives?

There are a long list of additional metrics that we see on partner referral program dashboards. They all have a place in understanding the details of what’s working and what’s not in your program. But, if you’ve got limited time and resources (don’t we all) just focus on those five areas I mentioned above and you’ll be able to do great things!

Now many of you may be wondering why I haven’t mentioned incentives as a key metric. After all, this is a huge part of operating a referral partner program. If you are doing this manually, by all means you’ll want lots of reports and data to manage that function. Ideally, you are working with a software vendor that automates incentive calculation and fulfillment. If so, this isn’t something you need to worry about as a key metric.

In the final article of this series I’ll go into even more depth on how you can use this data to optimize your program.  

Previous articles in this series:

Step 1 – How to identify potential partners 

Step 2 – How to engage and recruit partners

Step 3 – How to enable referral partners

Step 4 – How to incentivize referral partners

Step 5 – How to onboard referral partners

Step 6 – How to engage referral partners 

Data: How companies are driving deals through partner referral programs

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

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

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

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

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

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

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

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

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

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Most Popular Partner Referral Methods

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

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

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

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

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

What impacts partner referral programs’ conversion rates?

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

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

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

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

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

What type of compensation is being offered to referral partners?

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

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

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

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

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

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Fintech’s Revolution AND Evolution: From competition to collaboration to referral partner programs

Tornadoes, whiteouts, hurricanes… we can usually see signs of their impending arrival, but even so, we are never quite prepared for the effects they bring. One day, we see a well-known and understood landscape, and next, everything has changed and we must learn how to navigate a new territory.

Thus was the fintech revolution.

But while this shift of the financial landscape may have seemed sudden, there were signs. Once the financial meltdown removed the guarantee of banks being a stable financial choice, the idea of alternatives to the traditional banking model suddenly became a viable option. And with the technological boom, digitalization of finance operations was a logical business innovation. Disruptive and transformative, a wave of financial technology (fintech) startups formed from these two coinciding developments.  While new B2B fintech business models targeted several different facets of the financial world, the majority have focused in on payment and lending. These startups brought the finance industry into an age of technological innovation by infusing automation, real-time payments, and better loan offerings through peer-to-peer lending platforms into the financial ecosystem.

From this, the finance world got much more snug. Suddenly, banks’ dominance of financial markets wasn’t a given, and the financial industry was overrun with competition. The status-quo was no more. But the fintech revolution didn’t stop there. This revolution has undergone an evolution. And competition was just the first step in an evolving chain of transformations that allows not only fintechs to benefit, but banks and clientele as well.

Competition: fintech vs. banks

The recent boom in the fintech industry reaches across the globe as people become more comfortable managing their money and business online. These B2B fintech startups are offering tech-enabled payments, currency exchange, crowdfunding, online lending, and wealth management services. These companies are competing and beating out traditional banks and financial services firms. Why?

The digitization of businesses has heightened B2B customers’ expectations of deliverables. Fintechs offer companies agility, speed, transparency, and integrations that banks have only ever offered businesses on a superficial level. According to Business Insider, 82% of customers said that a primary value proposition of these products is that they are easy to use, 81% said faster service, and 80% said good customer experiences.

There is a large frustration with big banks which allows fintech companies to fill the demand. Goldman Sachs estimates that fintech start-ups could steal up to $4.7 trillion in annual banking revenue, and $470 billion in profit, from established financial services companies.

But competition isn’t solely a worry for banks. Other fintechs also face their own competitors. Like any disruptive business innovation, disruption of industry standards only get you so far. Fintech startups are flooding the industry, and because of this banks won’t be the only ones who disappear in the coming years. And while these FinTech startups may have changed the financial structure for good, when the dust settles, and the new landscape is set, the financial world is going to get much more hostile for these pioneers. This is especially true for fintechs that only have a niche offering and lack the long-standing experience and insight many investors are looking for. But don’t get me wrong, the fintech industry is still growing. So what does this mean overall? While the fintech industry has amazing potential to overtake banks, it also has its own challenges from within. With fintech lacking the long-term success and wider offerings needed to dominate the financial market and banks lacking the agility to compete head-to-head against fintechs, the realization has occurred that continued survival does not lie in competition, but rather collaboration.

Collaboration: acceptance and integration of digitalization

As fintechs grew in abundance banks tried to compete, but their established internal structure lacked automation, was restricted by regulations, and couldn’t adopt anything that would come close to the agility of fintechs’ SaaS products. On the other side, fintechs found it extremely difficult to garner industry respect and trust without the historical experience that banks have. In this way, fintechs and banks have become two halves of a whole, and thus came about the inspired idea of collaboration.

So it’s settled, fintechs and banks collaborate to create disruptive new offers. Unfortunately, it isn’t as simple as that. How to go about designing a beneficial partnership requires more thought. This hang-up is felt throughout the industry. In fact, according to Business Insider, 46% of banks plan to collaborate with fintechs, but only 13% believe their core systems can handle the technical demands of partnerships. The financial industry believes partnering with these companies is the best way to stay afloat. This makes sense since banks are set up to maximize security and minimize their costs, not to innovate. Reliance on fintech companies for innovation will be critical. And for fintechs, to gain expertise in regulatory matters and create stronger offerings they need to be able to set up an equal partnership with banks. But in order to do this, it is crucial that fintechs and banks find a way to automate and scale this type collaboration. Thus enters automated referral partner programs.

Referral partner programs: Aligning banks and fintech companies

Fintechs and banks both have different strengths that allow them to accomplish a certain level of success, but they each also have challenges that hold them back from growing further. A partnership removes the need for either to have to overcome these challenges internally. But in order to create long-term sustainable partnerships, banks and fintechs need to be able to automate that relationship. Referral partner programs does this by facilitating a seamless referral partnership that is low friction. Referral partnerships are at the core of many fintechs’ success. OnDeck, Funding Circle, and Lending Club and TSYS are just a few that have developed referral partner programs in order to establish greater trust, provide a wider offering and reach new customers. This is because referral partner programs can create deep partnerships with banks and fintechs that fill offering gaps to increase the value they can provide customers. Referral partners understand the pains of target customer and can extend the trust they have previously developed to encompass the referred company.

Fintech and banks can go about referral partner programs in three different ways:

1. A company can build a referral partner program for their many different individual partners, small businesses and agencies. These will usually be for unmanaged partners.

2. A company has a major partner entity, for which they create a dedicated referral program. This type of referral partner program would be based off a deeply integrated offering on the technological side and the ideological side. One example of this type of referral partner program is Funding Circle and H&R Block. In this referral partnership, H&R Block made Funding Circle the preferred lender for all their small business customers.

3. A company builds a program for one or many major partner entities and their sales teams. This is a more advanced and requires the ability for partner entities to have the ability to keep track of, manage, and increase their advocate pool while having greater capabilities to incentivize and manage partner activity. OnDeck has found great success at using a more advanced referral partner program to increase customer acquisition.

As the financial landscape changes, think about how you can overcome your internal challenges and generate more high-quality leads, especially from your smaller partner. To discover what kind of benefits a referral partner programs and referral software could provide, download the benchmark study, The State of Business Partner Referral Programs – Annual report, to better understand referral partner activity, behavior, sales involvement, rewards and the relative conversion rates.


Originally published on Salesforce

Referral Strategy: How to keep referral sources engaged

So you’ve identified your referral sourcesdeveloped a recruitment strategycreated a sales enablement plandeveloped a plan to enable referral sourcesconstructed a referral incentive strategy, and decided on your onboarding process, now it’s time to create a referral strategy to keep referral sources engaged after onboarding, and the referrals pouring in.

When trying to ensure that referral production stays high, you need a communication and promotional plan for current referral sources that keep them engaged whether they are in the middle of waiting on a successful referral or haven’t referred lately.

To start, let’s look at the three types of communication you need to establish the events that can trigger these communications.

3 communication types to keep referral sources engaged

There are three different types of communication you should establish with your referral sources:

  1. Automated communication on program status
  2. Nurture communication by program activity
  3. Regular program communications

These each keep referral sources engaged in different ways and their implementation are based on different criteria. By breaking down how each type of communication can be implemented you will be able to decide on what communications you want to send, plan and execute.

1. Automate communication on program status

Once a referral source has made a referral, you don’t want them to become disengaged from the program because of the lack of transparency or have continuous calls coming in to check on the status of a referral.  By setting up automated communication to referral sources, triggered by referral status changes, you can ensure that referral sources stay engaged while waiting for a referral to become successful.

To determine what automated communication you should implement in your program, let’s list out the different referral stages these communications can occur:

  • Referral is accepted – Send an email that confirms the lead was accepted and wasn’t already in the system.
  • Referral is qualified – This email informs the referral source that the referral was qualified or accepted by sales.
  • Referral becomes an opportunity – Send this email to inform the referral source that the referral lead has been converted to an opportunity.
  • Referral proceeds to the next opportunity stage – There is a lot that goes on with the referral during the opportunity stage and there can be many mini stages within it. This email informs of any stage change in the opportunity and any role they should play. For instance, if you would like your referral source to reach out when the proposal is delivered to see if the referral has any questions, you can indicate that in this email correspondence.
  • Referral is closed (lost) – This email is triggered if the opportunity is lost.
  • Referral is closed (won) – Send this to inform the referral source that their referral made a purchase.
  • Referral reward is earned -This informs the referral source on the amount of the reward earned and any information on how it will be paid.

When deciding on what automated communication you want to setup, be sure to think about the triggers that are specific to your business process.

2. Nurture communication by program activity

The success of referral sources can be optimized by creating nurturing programs that help develop them and encourage activity. Here are a few automated nurture tracks you can create based on certain activities or lack of activity:

  • If a referral source has a high number of referrals, but little or no success – Retrain on the target buyer and value proposition to ensure they are referring the right companies/people with the right message. Also, this reinforces the value of a 1-to-1 referral introduction.
  • If a referral source has low referral activity – Reinforce product value prop and target buyer. Remind them where to find referrals and how to ask for them.
  • If a referral source logged in within last X days but didn’t make a referral – Provide information on how to make a referral, what happens to a referral once it’s submitted and reinforce product value prop and target buyer.
  • If a referral source has a high number of successful referrals – Create a kudos campaign to recognize their efforts and encourage them to keep referring.

Once you figure out your different nurture campaigns, determine the frequency of each based off your referral strategy.

3. Regular program communications

Segmented communications target the special needs of those groups, but regular value-added communication will keep referrals top-of-mind for everyone in your program. Use the ideas below to build a newsletter template to send a monthly (or frequency of your choosing) communication. Possible information to include in a regular newsletter (circle content you want to include):

  • Target buyer/persona spotlight with corresponding value prop
  • Leaderboard of top members by referral success
  • Tips on asking for referrals
  • Success story – highlight a story on how someone generated a successful referral
  • Testimonial – quotes on how great the program is and how easy it is to earn rewards
  • Links to get more info
  • How to earn incentives – criteria and payment

To help construct your referral strategy nurture process and take the next step to create a promotional campaign, download the exercise or download the entirety of, The Referral Guidebook, to create an all-inclusive referral strategy.

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What types of partner referrals are driving new deals? [Infographic]

Companies who have implemented referral partner software to automate partner referrals and incentives are using it to help meet growth objectives by leveraging smaller partners, qualifying potential resellers and continue to get revenue from resellers who can’t transform to a SaaS delivery model. And as more companies start to diversify partner relationships and automate this process it is interesting to investigate not only how partners are using referral programs but the success partners are having with different types of referrals.

The data used here comes from the new benchmarks report, The State of Business Partner Referral Programs. These benchmarks are a result of partner referrals made in business partner referral programs run on the Amplifinity platform.

What type of referral methods are companies providing referral partners?

Out of the six referral methods, the inclusion of these methods are the following:

  • 100% include lead form
  • 50% include email
  • 50% include verbal referral
  • 50% include shareable URL
  • 30% include social media
  • 10% include print cards

It is no surprise that every program included lead forms since this is a common method of lead submission for any type of partner program. But while this insight is a great way to understand how companies are enabling partner referrals, a better indicators of effectiveness of partner referral methods are the actual use of these methods by partners and the relative conversion rates.

What referral methods are referral partners using the most?

It is clear that the inclusion of a referral method in partner referral programs are directly related to use by referral partners. However, looking at how partner referrals are most likely to happen is a data point that gives a great deal of insight into partner preferences and what type of methods should be included in a partner referral program. The following show what referral methods were most used by referral partners:

  • 81% use lead form
  • 13% use social media
  • 3% use verbal
  • 2% use shareable URL
  • 1% use email
  • <1% use print cards

Logically, lead forms are most used as they are included in 100% of partner referral programs. But what becomes interesting is the second most used referral method. Social media comes in second for use even though it was only included in 30% of programs. Verbal, shareable URL and email fall closely together in use but fall far below the use of social media even though they are all offered 20% more than social media. You could say social media is so popular because it is an easy way to directly refer. But if that was the case than shareable URL usage should be higher than social media since it is just as easy to directly refer someone and included in more programs. The difference is that social media can be a general blast out to all contacts without having a specific person in mind. This makes it easier and allows referral partners to continue to refer especially if a partner doesn’t have a specific referral with a need for the company’s product or service. But easy isn’t always better, especially for partner referral programs. When it comes down to it, it is all about the conversions.

Which partner referrals are converting to deal?

Moving from highest use to highest converting, you may notice that two methods are missing from the list – email and social media. These have no conversions. With social media having the second highest usage but no conversions, it proves that general blast don’t work in driving deals from referral partners. This is because when a referral doesn’t include a one-to-one relationship it loses its influential power. To try and correct this, train referral partners on the right way to make referrals and how to make one-to-one referrals through social media.

The following is the rate at which the rest of the partner referral methods converted:

  • Print cards – 67%
  • Lead form – 37%
  • Shareable URL – 21%
  • Verbal – 21%

While print cards have an amazing conversion rate this must be taken relative to use and inclusion. If you remember, print cards were only included in 10% of programs and have less than 1% of use.

Lead forms have a solid and reasonable conversion rate that goes along with the rest of the data. While verbal referrals still have a very good conversion rate it was only used 3% of the time. With verbal referrals now being automated and trackable, I predict that the use will increase in the coming years and therefore the relative conversion rate.

Start visualizing partners’ referral process and discover how to grow partner referral conversions: