How Verbal Referrals Can Increase Advocate Referrals

We all know that customers, like ourselves, want things to be easy. The more barriers you have in your sales cycle or on your lead forms, the less likely you are to convert all of those leads into opportunities. As marketers, it’s important for us to make every step of the customer journey  easy – starting at the first point of contact, all the way through to the end. According to a survey from McKinsey, making the customer journey as easy as possible increased revenue growth by 10-15%. The survey also found that an easy and effortless customer journey resulted in happier customers, as positive customer experience ratings increased by 20 percent.

Look at companies, like Amazon for example, who have perfected the easy customer journey. By giving users the option to enable 1-click purchase, Amazon removed the barriers that might otherwise stall an online purchase. How can you replicate a similar ease of use for your referral marketing program? You can start by automating and tracking verbal referrals within your system.

Verbal referrals, also referred to as offline referrals, can be difficult. When you have a customer or partner who is ready to pass you a warm introduction to someone excited about your product or service, the last thing you want to do is ask them to stop and fill out a form online or apply to join your program. Instead, you want to be able to receive that referral lead and, in the easiest way possible, be able to enter the referral into your program workflow and make sure it is tracked back to the partner or customer for proper credit. If you are currently trying to track these types of referrals manually, it’s likely the most difficult part of managing a referral marketing program.

By incorporating verbal referral functionality into your referral workflow, you can eliminate a pain point for advocates who make verbal referrals but don’t get the credit due to a lack of attribution in the existing CRM or system of record. By allowing for verbal referrals, your advocates aren’t tied to lead forms through your dedicated system. Instead, they are empowered to leverage those close connections through the power of conversation. Chances are, your advocate will thank you, and be more willing to refer leads in the future.

Listen, people are busy and time is money. We all know this. That’s why it’s more important than ever to track verbal referrals. By allowing proper attribution for verbal referrals, you are allowing the advocate to keep leads engaged and collect those verbal referrals when a lead might not have time to fill out a form. Simply put. a verbal referral reduces the amount of effort an advocate has to put forth in the referral process.

And if you’re still not convinced, listen up. By offering verbal referral functionality as part of your program, you give customers the option to simplify their referral process which, in turn, increases engagement with the referral program. If you incentivize the enrollment process, advocates making verbal referrals are automatically sent an invite to your program if they aren’t already registered. Because the advocate has already made at least one referral, they are more inclined to register to be part of your program. When that verbal referral turns from a lead to a customer, your advocate will be notified and can see their reward which will encourage future referral engagement with your program.

In summary, having the functionality within your program to track and reward verbal referrals is essential to the success of your program – so remove those barriers and increase your advocate engagement! If you’d like to learn more about how you can increase your referral ROI, check out the Amplifinity ROI calculator.

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:

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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:

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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:

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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.


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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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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.

How to optimize your referral marketing program messaging

Trying to understand what referral marketing program messaging will prompt your advocates into action can be frustrating, confusing, and even contradictory. But optimizing your message for your audience is important. Look at the great American novelist, William Faulkner. Faulkner never wrote for his audience. In fact, in one of his most well-known novels, The Sound and the Fury, he took on the first person persona of a mentally disabled man who had no sense of time. The first sentence was three pages long and gives the reader an instant headache trying to understand it. Now, it’s mostly only read by professors and their ill-fated students.

But the reason behind Faulkner’s foolish, frustrating and frazzling writing still applies to referral marketing messaging today. Faulkner was trying to have his writing structure communicate the feeling of the character. And trust me when I say by the end of the novel I did feel confused, unable to understand anything, and convinced that years had passed since starting the novel. But for a brand this means communicating enthusiasm and excitement.

So how can Faulkner’s many lessons be applied to optimizing your referral marketing program? In four ways.

4 referral marketing program messaging lessons from William Faulkner

1. Make your message unique but not too unique

Faulkner reason for his outrageous writing style was based on his determination to breakaway from tradition and deliver a new kind of novel. Breaking away from tradition and providing a fresh message is something we all strive to do. For the last decade the digital world has been in constant flux. This has resulted in a continual redefining of the status-quo and how we communicate with customers and buyers . But everything has its limits.

I have seen referral emails and registration pages make a message too unique to the point where it becomes confusing. As we learned from Faulkner, that won’t get you engagement. Always choose clarity over trendiness and uncommon word play.

But if you still crave a one-of-a-kind display, try creating unique graphics and images to add in. An example of this is ADP. ADP did a great job at creating unique but specific images that communicate what they want advocates to do.

2. Testing referral marketing program messaging might be your best friend

Obviously, focus groups and message testing weren’t exactly around in Faulkners day, otherwise he might have gone in a different direction with his writing. But like how the scientific method is a necessary part of discovery for science, testing your messaging is prudent for anyone with a referral marketing program. The message testing process is similar to the process of the scientific method:

  • Research your customer or partner personas
  • Construct two different messages
  • Display one version for specific period of time and then display the other
  • Analyze data
  • Ask if either message resonates with the majority of customers or partners
  • If the answer is no start again
  • If the answer is yes apply that one to your referral marketing program

This process allows you to figure out what prompts the most engagement from customers, partners, and current advocates. There are many different parts of referral marketing program messaging that you can test, but if you need to narrow the list down I would suggest focusing on:

  • Advocate invitation email
  • Referral program promotional email
  • Registration page

Once those emails and that page are optimized you can move onto other pages and emails. Also, be clear about measuring your email results. While opening an email is all well and good, if they don’t click through to the registration page and actually register for the program than your messaging needs to be optimized further. At that point try switching out the email and registration page with different versions to see if performance picks up.

3. Know your audience is necessary

Faulkner never thought about what his readers wanted, only what he wanted them to get from his novel. That was a big mistake. Who you are targeting is a main definer of your messaging. For instance, targeting a business customer is very different than targeting a consumer. While targeting a referral partner is different than targeting a business customer. For optimal results no program should combine these three but instead have different referral marketing programs and messages that speaks to the specific demographic.

When looking deeper into business customers, make sure you use similar language to what they are used to. For one, they need to feel like this program is for them. Business customers have less time than consumers and so a pointed message with familiar language is key. The faster you get the value and process across to them and the easier it looks, the more likely they will be to register and refer.

As for referral partners, the partner ecosystem is large and there are a lot of different terms that describe referral partners. Make sure that you use your partners’ industry term to describe them. For instance, telecoms use the term agent program more frequently than referral partner program even though it describes an identical relationships.

The same go for rewards. Don’t feel like you need to communicate the fine print of your rewards to advocates at first. Just make sure that the rewards you’re communicating to advocates are based off what they find valuable.

Business customers have a lot more involvement in helping sell the referral compared to consumers. This means a higher reward is often necessary. While referral partners are putting their relationship with customers on the line so there incentives are often based off a percentage of the sale. Make sure you emphasize the value you are offering by putting it at the forefront of your messaging to customers and partners.

4. Short and sweet is better than long and descriptive

Like the readers of The Sound and the Fury, customers are impatient. Tony Haile, CEO of Chartbeat, found that visitors stay on a page for only 15 seconds while a recent psychological study found that after eight seconds their full attention dimensions significantly. Keeping your first referral program promotional email and the registration page short and sweet with a clear value proposition is necessary to capture their interest in such a short period of time.

After a customer registers for the referral program you can go into more detail about the types of referrals that payoff and the reward fine print.

Another strategies is relying more heavily on images and graphics. A customized image can be worth 1,000 words without overwhelming your customers or partners. People process images much faster than words.

RingCentral took that idea and applied it to their referral marketing program to create a great message.

RingCentral referral marketing program


They also wanted to be very clear about what type referral led to each reward. But instead of writing long chunky paragraphs they created a graphic with minimal text and with a layout that is easy to scan and understand.

Referral rewards for RingCentral

Do you want to learn more tips and tricks for optimizing your referral program? Check out our resource page. And if you are looking to zero in on optimizing your reward for your specific demographic, discover how different reward equations and presentations can get you the result your looking for.

how to calculate referral incentive