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 to realign your partner model and SaaS company with referral partners

Partner and agent models are extremely profitable. Partner types like resellers and referral partners help companies get greater sales coverage in a less expensive and more efficient way than a direct sales model. But for SaaS companies it can be more complicated. Among the disruptive ripples that SaaS made was the scrambling of traditional partner models. This is a result of many reseller partners not being able to handle the more supportive and relationship-based customer model required by SaaS products, technical road blocks, and the constant product updates that a more agile subscription service has. So with all of this change you may be asking . . .  What does the partner model look like for SaaS moving forward?

The following are 4 changes that will impact the SaaS partner go-to-market strategy.

1. The position of ensuring customer success moves from the channel partner to the company

With the on-premise model partners took care of the technical implementation of a product but it was then up to the customers to facilitate their own success beyond that. With SaaS removing those technical barriers and instituting reoccurring revenue model, the emphasis is now on the continued building of a relationship and success of the end-customers. SaaS applications have allowed companies to become extremely agile which doesn’t align as well with the rigid reseller model. These partners aren’t necessarily focused on customers after the original sales and many are having trouble conforming to the new SaaS delivery model. These changes make it harder than ever to be successful as a reseller and for SaaS companies to grow revenue from the partner channel.

Based on these challenges, more SaaS companies are moving customer success in-house.

Suggestion: Although current resellers and distributors may not be as effective as they once were, they are still in a position to increase your revenue generation and provide coverage. Try enabling them to submit targeted leads that are picked up by your sales team. They can then assist in the sales process and still be rewarded for their efforts. This is the referral partner model which allows you to maintain and increase sales coverage while delivering the customer support of a direct sales model.

2. SaaS companies will have a dedicated team to meet customers rising expectation

Another large factor for customer success moving in-house is the rising customer expectation that they expect their contact to fulfill. Resellers are becoming less dedicated and more polyamorous than ever before. They often don’t have the time or resources to provide that type of support that SaaS end-users need.

That means when something goes wonky as it always does in one instance or another a customer will require a quick to instant response time. Depending on the type of product and its role in a business it could impact a company’s success or stall its ability to move forward. This means that the fix needs to be applied as quickly as possible.

Suggestion: When a customer comes from a partner referral as opposed to being sold by a reseller it ensures a quicker response time since they don’t have to wait for the reseller to have enough time to contact the company, understand the solution & institute a fix. Try assigning a dedicated customer success rep to an account to ensure the providing of proper communication and information in a timely manner to help control the situation and fix the issue.

3. Agile product updates require continual training

One of the beauties and challenges for a SaaS company or product is that they can easily institute product updates quickly and seamlessly. This allows companies to provide more customized products and services while continually improving it. However, this also requires the continual training of resellers on the in-depth technology requirements, benefits, drawbacks, how to use it and how it can apply to different customer types.

This means that resellers need to be able to set time aside to continue to understand product updates at an expert level. This is the only way they can try to provide the consultative services that customers expect goes along with SaaS products and services. Unfortunately many reseller don’t have the time to keep training or provide the consultative services that enable customers to benefit the most from using the product or service.

Suggestion: Instead of providing continual in-depth training as you would with the reseller model, the referral partner model allows you to update partners on new benefits, its capabilities, restrictions and uses in a succinct, high level format. Try assigning a sales or success rep to update referral partners regularly so they can correctly relay the benefits to qualified leads but don’t have to have a deeper understanding to sell the product or ensure the success of product updates.

4. More referral partners and less partner monogamy

While we have already said referral partners are an alternative route (and smoother route) for SaaS companies than other traditional partner models, we must take into account that partner monogamy is no longer reliable. As a channel account manager at a large company releasing their own SaaS product said in a confidential interview, “You have to have a way to manage a partner that is there for just one deal and no more. Everything you’ve done before is kind of thrown out the window.” Expanding on this he explains that, “One day they might work on a deal with you and the next they will have moved onto a deal with someone else.”

Suggestion: A referral partner program can help manage and scale partner referrals while allowing SaaS companies to continue to expand coverage areas and generate revenue from the channel. Try implementing one to draw sustainable revenue growth from your partner ecosystem while removing the challenges that SaaS products and services create within the channel.

To understand referral partner program performance benchmarks from companies like yourself, download The State of Business Partner Referral Programs.

referral partners

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.

referral partners, referral marketing, what are referral partners conversion rate?

 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).

referral partner programs, referral network,

Referral Strategy: Create an onboarding process for your referral sources

After identifying your referral sourcesdeveloping a recruitment strategycreating a sales enablement plandeveloping a plan to enable referral sources, and constructing a referral incentive strategy, you can start to fashion a referral strategy that enables you to create an effective onboarding process for your referral sources.

To build an onboarding plan, you need to first determine what information should be collected at registration for different referral source and the training they need to succeed.

5 ways to determine your referral strategy for your registration process

Throughout the life of your referral program, you will need to collect different information from referral sources at different times. To figure out what information you need to collect at registration based on your referral program structure, answer these five questions.

  1. Are you using the referral program as your partner database?

If yes: Collect all required fields at registration, like email, address, and phone number.

If no: Connect your registration and program to your CRM/PRM with SSO and prefill this information.

  1. Are you paying your referral sources via electronic funds transfer?

If yes: Collect the appropriate bank information.

If no: Validate the address or email is correct for a check or electronic gift card.

  1. Do you want to approve referral sources before they join the program?

If yes: Collect the key information you are judging their approval on. This could be a check on access to your target buyer, a sample of existing clients, or the ability to commit to an SLA.

If no: No additional information is needed.

  1. Is a salesperson (direct or channel) involved in the relationship with the referral source?

If yes: Provide a way to select their salesperson during registration so that performance can be tracked and reported by salesperson.

If no: No additional information is needed.

  1. Do you expect that the majority of referral sources will earn the taxable limit of $600 during the calendar year?

If yes: Collect the tax information at registration. If the referral source is inside the U.S. this would be through a W-9. If the referral source is outside the U.S. this would be through a W-8.

If no: Establish a process where if they reach the taxable limit, the appropriate tax information is triggered for collection before further payments are made.

Once these decisions are made you can construct your registration form to collect this information.

To help guide you, download this worksheet, along with the five questions worksheet.

How to build a training plan for your referral program

Another important part of onboarding referral sources is training them. Depending on what type of referral source you’re enabling, this training may be as easy as providing content on your target buyer or as in-depth as laying out the different value propositions each type of buyer will respond to and how to identify them. Depending on your referral source’s knowledge of your business, you may want to just put the information in your referral program portal so they can access it whenever they might need a refresher.

When considering the different training you should provide, think about it in relation to who the trainer will be or if it would be self-taught, the delivery mechanism for the training, if there is a specific date(s) it should occur or if it is ongoing, and if the training is a requirement or optional.

Here are a few types of training you can consider offering:

  • Target buyer and buying personas
  • Referable product(s) and value props
  • How to make a 1-to-1 referral ask
  • What happens after you submit a referral – process and communication
  • How to earn incentives – criteria and payment

To help construct your training process, download the exercise or download the entirety of, The Referral Guidebook, to create an all-inclusive referral strategy.

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

 

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