Why referrals?

Referral marketing programs offer a high volume of excellent, low cost leads from partners, customers and other referral sources.

Who are your Referral Sources?

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Referral Insight from Analysts

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Industry Trends Driving Referrals

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New Referral Program Research

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What is referral marketing?

Referral marketing is the process of leveraging different referral sources such as partners, customers and influencers, to refer target buyers they have a relationship with to your product or service. With referral marketing software, companies can obtain personalized lead generation at scale through both direct and indirect channels.

Referral sources . . .

refer people who are a fit for your offering . . .

referral sources, referral marketing, revenue growth, referral partners

substantially growing your business

Who are your potential referral sources?

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A referral source can be anyone who interacts and has a relationship with your target buyer, including partners in your ecosystem, influencers of your target buyer and existing customers. The referral sources chart demonstrates some of the many different referral sources a company can utilize to drive revenue.

Within the referral channel, companies typically run multiple referral programs where each program is specialized for the needs of the referral source with appropriate messaging, content and incentives to motivate referrals.

These referral programs fall into three categories:

Direct to Individuals Program
To and Through Strategic Alliance Programs
To and Through Partner Network Programs

Try matching your referral sources to the relative program type. To better understand your potential referral sources try using Exercise 1 in, The Referral Guidebook.

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Referral strategy advice from SiriusDecisions analysts

channel revenue, channel marketing, referral channel, partner channel, partner marketing

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Kathy Contreras, Senior Research Director of Channel Marketing Strategies at SiriusDecisions, is an expert in how to adapt to the changing channel. Listen as Kathy explains how referrals are helping companies adapt.

Kathy’s recent article: Meet the SiriusDecisions Channel Operating Model!

SiriusDecisions, demand gen, referral marketing, customer referral program, Lisa Nakano

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Lisa Nakano, Service Director of Customer Engagement Strategies at SiriusDecisions, is an expert in how changing industry trends are impacting demand generation. Listen as Lisa points to how companies are using customer referral marketing as their number one source of demand generation.

Lisa’s recent article: Customer Experience Governance – Three Models

“The ability to leverage referral partners for 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,” (The Referral Guidebook).

SiriusDecisions, analysts, marketing insight, channel model, channel program

“For customer engagement leaders, referral marketing that produces measurable results is extremely compelling,” (The State of Business Customer Referral Programs).

SiriusDecisions, referral marketing, customer engagement, referral program

Industry trends driving referral program adoption

referral partners, referral strategy, partner model

The indirect go-to-market model has changed

With the transition from an on-premise to a cloud-based model, the switch from a primarily IT buyer and the increase in new types of partners, the channel has fundamentally changed. As a result, there has been a 30% decline in the number of traditional channel partners from 2008 (according to Jay McBain, Principal analyst at Forrest). Referrals can help compensate for this by:

Allowing traditional partners to refer business they aren’t equipped to manage
Being a qualifier for entrance into a higher-tiered partner program
Providing an exit for partners that are no longer performing
Giving companies access to partner types that would never fit into the traditional partner model

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The buyer’s journey is more complex

Buyers use more touchpoints when researching a purchase than they ever have in the past. At the same time, traditional channels like email, PPC, and sales prospecting have decreased in effectiveness. Campaigns that would have resonated with a prospect in the past no longer do. As a result it has become less about interrupting the buyer and more about being introduced to the buyer. Within the buyer’s journey, referrals are one of the most effective types of lead generation. Referral marketing software scales this necessary component of the buyer’s journey to:

Reach more target buyers by breaking through the noise
Communicate the different benefits of a product or service from a trusted source
Increase the conversion rate of lead to purchase (see below)

Referral program research

In the reports, The State of Business Partner Referral Programs and The State of Business Customer Referral Program, the data from companies running referral partner programs and customer referral marketing programs on the Amplifinity platform were analyzed.

Of the referrals made, 31% of partner referral leads and 13% of customer referral leads made a purchase. When compared to industry conversion rates done by Salesforce’s Implisit, a referral channel delivers a much higher value compared to ad hoc referrals, marketing and partner leads. With sales involvement, the conversion rate of referral partner leads shot up to 41% while the conversion of customer referral leads increased to 30%.

The data showed clearly that referral programs that are enhanced with sales enablement drive more revenue compared to ones that aren’t.

Download the reports to see more benchmarks.