October 15, 2021

The 10-Steps for Developing Profitable Referral Partners

Referral partners can help your business grow towards unlimited horizons. Find here a 10-step list for developing a profitable program.

10 steps referral partner

A referral program is a profitable program in any market. That’s because people choose the endorsed word from a trusted source over the product or service seller. Another reason is people think that businesses speak highly of their products or services thus leaving enough room for an objective referral.

That’s where developing referral partners come into play. A trusted advisor or satisfied customer endorsing a product or service provides instant credibility.

But as a small business owner, you may not have a string of celebrities to endorse your products or services.

So, what can you do to generate endless endorsements and streams of referrals? In this post, you will learn the 10 proactive steps for developing referral partners that will be profitable.

10-Steps for Developing a Referral Partner Program

Step #1: The Target Market 

In order to develop referral partners, first, you need a smart referral strategy to help your partners understand the target market. A target market is a group of individuals or businesses you want to sell your product or services to.

Not all products and services are usable by all consumers. And each product and service has different sets of consumers who want to purchase them.

If your target market is an individual consumer (B2C), you can break them into segments such as income, age, demographics, among others. For example, if you offer paid streaming services, your target market may include PC and smartphone users between the ages of 20 and 65.

If your target market is businesses (B2B), you can break them into segments such as the type of business and the number of staff. For example, if you are a cybersecurity and IT consultant, your target market may be businesses with 20 and 100 staff who do not have their own IT department.

Step #2: Work Through Your Unique Selling Proposition (USP)

Once your partners are clear on your target market, it is even more helpful especially when they know what makes you stand out. For any business to be at the top of the food chain, there ought to be something unique about them. Know your unique selling proposition and use that to sell your brand to a referral partner.

When you do not have a USP at all, attracting new customers and quality referral partners are unlikely. After all, no one will want to refer to someone who has placed his or her trust in their opinion to someone with nothing special to offer.

Even if they do, it will be with some disclaimer or reservation, never with an open heart. If you haven’t identified your USP, you should because it helps to truly speak to your ideal customer. It also lets them know that you truly care and understand them and their problems.

Step #3: Identify Referral Partner 

First, identify those businesses and partners most likely to refer the right clients and customers to you. Knowing the right partner to work with will be much easier now than your target market and USP. Referral partners you can work with can be broken down into different categories based on who they are to your business.

Businesses in your supply chain can serve as your referral partner. Businesses that spot the problems you solve can also be a valued asset. Other businesses that share your target market too are great to work with especially if they can sell added-value services on top of your products.

Another type of most valued referral partner you should seek are satisfied customers. This is because they have experience with your product or service. And surprisingly, your competitors whose niche or USP doesn't meet the needs of the client can refer them to you.

Step #4: Create a Circle of Trust

When picking out the referral partners you want working with you, let trust be one of the criteria you consider. People don't give referrals lightly because then their reputation goes along with it. So, you shouldn't expect that other people will refer to your brand without earning the right first. And that means earning their trust. 

What this means is you ought to put effort into developing referral partners who can build a strong relationship. Your partners need to be confident in you that you will be able to deliver high-quality products and services.

So, when they refer to your product, they do so with so much assurance and credibility that people trust them. There are so many ways you can build trust—for instance, making the partner test your product or services, among others.

Step #5: Nurture Relationships

It goes without saying that a strong relationship is important if you want a profitable referral partner. Nurturing a good relationship with partners starts with good communication. Send them regular emails and surveys to know about their needs and desires. Keep providing your partners with fresh creative content to help make marketing successful.

One of the most important reasons why you should take your partners seriously is given by the 80/20 rule —which also applies to the referral programs. This means about 80% of your sales come from 20% of your referral partners.

So, give an extra dose of attention and recognition to those partners. Apart from recognizing their hard work, also keep them happy by giving them advance notice of new promotions. This keeps them informed and offers time to plan and implement their approach.

Step #6: Communicate Regularly with Partners

Although regular communication when developing referral partners sounds like a cliché, it is equally important. Communication isn’t all about talking but being able to dig deep and getting to know their challenges.

So, when communicating with partners, ask for status reports on ongoing collaborations and projects. When there is constant communication with partners, it reduces the element of surprise.

The same way you want vendors to alert you during a shortage of resources or obstacles in delivery, you should also make sure your partners know what is happening at your end. Set up an automated system that reminds you to stay in touch with your partners regularly. Social media is a great platform you can leverage to stay connected with your referral partners.

content management Kiflo PRM
Easily Share & Update Resources for your Partners

Step #7: Create a Partner Page

Turning your referral program into the most profitable partnership starts by taking it online. When online, it opens your business to more opportunities.

So, if you don’t already have a website, create one. And on your website, craft a partner page where potential referral partners can get all the information they need about your business and sign up to your program.

The goal of a partner page is to easily connect with new referral partners that have interest in your product or service. This will lead to a new potential partner network you wouldn’t have access to otherwise.

Step #8: Provide a Partner Portal

What makes a referral partner successful is the marketing tool they use. As such, it is best to offer a variety of marketing tools for the partner to choose to market your brand. For example, links to your landing page can save them with the hassles of creating one, if at all. You can offer alternative landing pages on your website based on the situation.

Giving referral partners access to your brand's product images, logo, and other graphics aids in promoting your brand. So, keep an up-to-date library for your partners. Also, quick loading banners that focus on a single product feature and benefit with a strong call-to-action (CTA) is an effective tool.

Step #9: Incentivize Partner for All Sales

Developing referral partners does not only gain you massive reach but also lowers distribution, marketing, and sales cost. For this reason, it is important to devise incentive plans that encourage partners to sell your product over others.

Note that your incentives have to be competitive if you want to keep partners encouraged to work with your brand. Also, don't overcomplicate the incentive program for partners. Keep things simple by clearly explaining the goals of your partners and how they can track their progress and gain rewards.

Do not make frequent changes to the terms and conditions of your incentive program. This can confuse your partner and complicate the relationship.

Lastly, ensure you have different types of incentives for partners. An incentive could be cash, a physical gift, a special trip, an invitation to a company event, personal thank you from your CEO, or a feature in your newsletter.

Step #10: Use a Partner Relationship Management (PRM)

Lastly, look out for the right Partner Relationship Management (PRM) and Customer Relationship Management (CRM) tools that can help you grow your partner program. With a Partner Relationship Management (PRM) tool, you can manage your partners and drive leads to your CRM where the sales team can take over the sales process. 

Partner Onboarding Pipeline
Get your partners off to a good start by creating an optimal onboarding process.

PRM tools help your company manage its interactions and relationships with your prospects and customers. , a PRM solution, helps your company stay connected with your partners, improve profitability, structure your partner program, provide visibility to partners and streamline processes. With this tool, businesses can guide the process to improve the chance of success.

10 Steps for developing referral partners

What Makes a Good Referral Partner?

A referral partner has to exhibit certain qualities to stand as a trustable partner.

First, a good referral partner is someone who puts a premium on referrals and is well-connected. It is because knowing a limited number of people wouldn’t expand your connections.

Also, a partner willing to put in the same dedication as you do is a stand-in for a good referral partner—second crucial thing to consider.

Third, it’s also important that your referral partner should have a good reputation.

Lastly, it’s a given that someone with high persuasive power would make one of the best referral partners.

See the difference Kiflo makes in your partner relationship management efforts with powerful Deal Registration

Get a free demo

Frequently Asked Questions (FAQ)

How do you establish a referral partnership?

To establish a referral partnership, your product or services has to be referable. Thereafter, identify your target market, find the ideal referrals, and train your referral partners on the Unique Selling Proposition (USP) of your business or service.

What is a referral partnership?

A referral partner is a part of a partner network. The primary aim of referral partnerships is to generate high-quality leads. A referral partner recommends or endorses a particular company or service in exchange for something valuable.

What makes a good referral partner?

A good referral partner is someone who can generate quality leads. To generate quality leads, the partner has to be well-connected. They also need to be dedicated and have a good reputation. Importantly, they need to have high persuasive power.

How do you handle a referral partner?

Communication is the most valued trick when it comes to handling referral partners. To get the most out of your referral partner, ensure they have first-hand experience with your product and service. Also, ensure that your referral partner is able to have a personal connection with potential customers.

LinkedIn Twitter Facebook

Start Scaling Partner Revenue Today

Get your personalized demo of our all-in-one partnerships platform.