All You Need to Know About Referral Partner Programs
When it comes to sales and networking, there are many ways to expand your reach as a growing business. Maybe you feel like you’ve hit a plateau in your growth, or maybe you’d like to explore new avenues in your marketing strategy. A referral partner program can support a cost-effective customer acquisition plan. It can be an exciting way to get more people talking about your brand and help you build stronger relationships with your partners. As you are brainstorming ways to take your business to the next level, consider how a referral partner program can help your big dreams take flight.
What is a Referral Program?
A referral program is a great way to receive warm leads from partners with whom you have an established and trusted relationship. There are key differences between a Customer Referral Program and a Referral Partner Program. While a customer referral program is customer-based and incentivizes existing users to recruit their friends and family, a partner program does this on a much larger scale. Let's look at the differences.
Depending on your goals in the short and long term, you might choose to employ a customer referral program, a referral partnership program, or both! Let’s take a closer look at a referral partner program and what it can do for your business.
Why Start a Referral Partner Program?
There are many reasons to start a referral partner program. A well-conceived referral program can help you maximize your brand awareness, increase your conversion rate, and reduce your overhead. These clear benefits can make this kind of partnership program a sound part of your business strategy, and they align with the overall benefits of a channel partner program.
Expand Your Brand Awareness
By allowing trusted partners to promote you online through marketing emails or in their own sales negotiations, new doors open that can generate potential leads. You are able to then leverage their networks and customer relationships to spread the word about your brand. This increased brand awareness can translate to more qualified leads.
Reach New Markets or Audiences
Through your referral partner’s network, it is possible for you to expand your reach to new markets and audiences that you might not have had contact with otherwise. Remember, when you are evaluating potential partnerships, it’s important to find referring partners that are in your target country or in close contact with your target audience. This will help ensure that the program will be effective and beneficial.
Increase Your Conversion Rate
One exciting benefit of utilizing a referral partner program is that you can increase your conversion rate. From the customer's perspective, the referral comes from a trusted source. From your sales perspective, the lead is coming from someone with whom you have an established relationship (your partner), and this increases the likelihood of closing the sale.
Through a referral partner program, you can get more leads without having to pay for an internal salesperson. This is a great way to outsource the work of sales and create a mutually beneficial system. The risk is minimal and the rewards can be great; you’ll only pay a commission after you have been paid for your product or service.
How to set up a Referral Partner Program
Perhaps this kind of program seems like a good fit for you and your business. So, how can you set up a referral partner program? Before you reach out to potential partners, make sure you are clear on how your unique referral program will operate. Outlining these things before onboarding partners will set you up for success.
Structure Your Reward System
First, you’ll want to structure your reward system. To do so, you should ask yourself these questions:
- What do your partners stand to gain by referring leads to you?
- Will you do the same for them?
- What percentage commission will you give them when their referrals are converted into customers?
Structuring your reward system before bringing in partners will guarantee that expectations are clear from the get-go.
Then, you can begin the process of finding your ideal partners. You can use inbound marketing by creating a referral partner program page on your website. This page can highlight the benefits of your referral program and attract potential partners. You also might consider reaching out to potential partners on LinkedIn and doing an outbound campaign.
Once you’ve found the perfect partners for your referral program, they will need to know about your product or service to be able to properly market it, as well as how to best represent your brand. Partners should also be well-versed in the Ideal Customer Profile (ICP) so that they don’t waste time and energy. If they are equipped with this knowledge, they can more easily identify qualified leads. One great way to provide them with all of your marketing resources and training materials is through a partner portal.
Keep Partners Engaged
Remember to keep your partners engaged! Check in with them periodically and see how they are doing. Make sure they feel valued for their work and identify any obstacles that may be holding them back from generating leads. It’s important to nurture the relationship with your partner so they continue to feel motivated and invested in your success.
Measure the ROI of Your program
Set tangible and realistic sales goals that make sense for you and your partner’s work together. Measuring the Return on Investment (ROI) of the referral partner program will help keep you on track and keep your partners motivated. Tracking the ROI is a way to celebrate your mutual successes and make your partners feel like valued members of the team.
How a Referral Partner Program Works
Setting up a successful referral partner program doesn’t have to be complicated! You just need a Partner Relationship Management (PRM) platform to create a referral link, track leads, and generate commissions. Here are the steps in the lifecycle of a referral partner program:
Provide a Unique Referral Link or a Manual Referral Form
Once a partner submits a lead, the lead is passed to your sales team which will manage the sales cycles until it's closed. Leads can be submitted through a referral link that the potential customer will click. Or, a lead can be submitted by the partner manually through a form. If yours is a self-serve product, the sales step is skipped and the lead will be converted to a customer when the customer purchases the subscription.
Track Leads Coming From Your Partners
Keeping track of incoming leads from your partners, and where those leads are in the sales funnel, is an important part of maximizing your referral program. Tracking leads will help measure the progress of the referral partner program and help maintain a strong relationship with transparent communication.
Automatically Calculate & Track Commissions
You can automatically calculate and track your partner’s earned commissions through a partner portal, like Kiflo’s customizable portal. Tracking these numbers can help keep your partner motivated, because they’ll see exactly how much progress they’re making, and how many referrals have been converted into customers. Depending on if your business uses one-off or recurring payments, the structure of these commissions will look different.
Good SaaS Referral Program Examples
A SaaS referral program is built specifically for Software as a Service (SaaS) business models. They can be a great way to partner with companies that offer different services than your own but share a similar target customer base.
One great example of a SaaS referral program is Xero. They have four referral partner reward tiers, and they also offer training, certification, and opportunities for networking.
Notice how Xero offers clearly outlined benefits for each tier of the partner program in order to incentivize partners to generate more referrals. You can find more examples of SaaS partner programs here; you might refer to these when building and branding your own program!