How Implementing a Referral Partner Program Can Double Your Sales

Referral partner programs can be a digital marketing powerhouse, helping businesses increase their sales and improve retention metrics. As a digital marketing consultant, I have seen these programs scale exponentially. Many businesses have difficulty in this area. Many businesses struggle to find the right place to start, or how to identify why their referral program is not delivering the results they want.

This page will explain why referred clients are so important to your business' success. I will also share the methods I use to create referral partner programs for clients. This will allow you to set up your own or troubleshoot it and double your sales.

What is a Referral Partner Program?

People are talking about you and other businesses similar to yours. You can take control of the story and encourage people to refer potential clients to you by creating a formal referral partner program. Referral marketing programs that are most successful include a reward, commission, reciprocation, or another incentive for the partner. If calculated correctly, this increases participation while still allowing for a good return on investment (ROI).

Referral Partnerships vs. Affiliate Programs

Affiliate programs and referral partnerships can look similar because they both incentivize third parties to refer you. Referral partnership programs, however, are more formal. Your referral partners will learn about your company, how you can help them, and whom you help. This will allow them to speak with authenticity and accuracy about your company. They establish trust and refer people who are ready to do business with your company. Referral marketing is more cost-effective and works better than traditional marketing.

Affiliate programs aren't as personal or one-on-one. Affiliate marketers often use content to communicate a message, and then put it online where everyone can see it. Affiliate marketers receive a payment when someone clicks on a link to the company or makes a purchase.

Let's suppose your business is expanding, and you need to find a staffing agency that will help you grow. The article lists the top ten agencies that staff your city. You begin to research online. You click on a link to find out more about the agency and set up a consultation. You're still not ready to move on. This business is still a mystery to you. You may have questions about their business and how they can meet your needs. The company will still need to work hard to earn you business.

Now, let’s say you’re talking to your accountant “John” about your growth plan, and John says, “I know this great staffing agency that’s helped some of my other clients. Their rates are reasonable, and they always send the best people.”

John's recommendation is more important to you, don't you think? Referral marketing is different from affiliate programs. While both can be helpful, a referral partner will provide better leads.

Are Referral Partnerships Only for Customers?

According to McKinsey, up to 80 percent of referrals are from customers who are current or former customers. But they're not the only audience that you have.

Many businesses partner with companies that have similar customer bases but do not offer overlapping services. You might invite CPAs or attorneys who specialize in small business loans to join your referral partner program.

Many businesses partner with other companies. Consider the small business loan example. Perhaps your company partners with entrepreneurs and startups who do not have a strong financial footing and are often denied loans. It is possible to form partnerships with traditional lenders that can send your disqualified leads. This solution is explored in " What Should You Do With Unqualified Leads?"

Referral Partnerships Can Help You Improve Your Marketing Strategy

Referring clients to your company is one of the most effective ways to increase your marketing efforts. Referred clients are more likely than their counterparts to behave differently.

Referred Clients Are More Likely to Convert

According to Nielsen research, eight in ten consumers trust word-of-mouth recommendations more than any other source. Referred customers are also more likely to be positive and ready to do business. They're also three to five times more likely per Annex cloud.

Referrals Are More Loyal Than Clients Who Were Brought in By Them

According to Wharton research, Churn rates drop by 16 percent when customers are referred. Similar studies by Deloitte show that the percentage jumps to 37 percent when the referral partner also has a loyal customer.

Referred Clients Spend More

According to research published in The Journal of Marketing, the average lifetime value of a referred client is approximately two times greater than that of clients attracted via other marketing channels.

Referred Clients Are More Profitable

According to Wharton, referred clients are approximately 25 percent more profitable than their counterparts. Although the greatest benefits are seen within the first year of acquisition, they continue for some time.

Referral Partnerships Can Help You Build Your Brand

According to Deloitte, the average person will mention 56 brands each week in conversation. Brand building is as easy as being part of these conversations. According to research by the Journal of Marketing, referred clients bring in twice as many new clients as their counterparts.

Referral Partners Enhance Your ROMI

According to Wharton, businesses receive a 60 percent higher return on marketing investment (ROMI), when they refer clients. Referral partners can earn a monetary reward by referring.

Referral Partnerships Can Increase Growth Exponentially Through Effective Referrals

A referral partner program that is well-designed builds upon itself. It costs less to acquire and convert. Referred clients spend less, stay longer with you, and bring more people into your business. This results in exponential growth and lower acquisition and retention costs.

Tips to Set Up A Successful Referral Partnership Program

To see the results you have highlighted, you will need to create a formal referral program. As you create your own referral program, follow the steps below.

Create Your Process

Designing your process is the first step.

• Program Details: Think about the reward that a referral partner will get when someone they refer signs up for your services or purchases from you. To determine a reward that makes sense, consider the lifetime value of the referred client. You should also consider when and how your referral partners will be rewarded.
• Segments: Concentrate on large groups of people to start businesses, rather than on individual businesses. Each group will need a different message. You may have segments that include accountants, competitors, competitors, or clients.
• Technology: This will allow you to manage your contacts and track their activities. You can also see general metrics about the effectiveness and efficiency of individual campaigns and your overall program. This is something that most CRMs can do, especially if they offer integrated advertising.

Recognize the Key Players in Your Team and Train Them

The team needs to be familiar with the program as they will be onboarding referral partner referrals. Different team members might interact with referral partners at different stages in their journeys. Make sure to get them excited. It's a great way to get them excited about the job.

Identify Potential Partners

You should aim to reach out to businesses and people you already know. After you have exhausted your existing contacts, it's time to start looking for warm and cold contacts. As much information as possible about each potential referral partner (e.g., industry, target market, job role, etc.) is needed. This will allow you to send more targeted messages and make your messages more personal.

Create a Funnel

Referral marketing is just like any other digital marketing campaign. You'll need to nurture these relationships, and most prospects won't want to start referring immediately. Here are some things you can do to help your prospects:

• Landing page: Prospective referral partners require a place where they can find more information. To ensure that each segment receives the right content, you may need multiple landing pages.
• Signup Form: A basic signup form should be included on your landing page, inviting the potential referral partner to proceed with the next steps. You should not push them to make a formal agreement or commitment at this stage. They may only be interested in learning more or trying out the product.
• A light email introduction: When I reach out to potential referral partners for the first time, I always start with a brief intro. The introduction only contains a few lines to explain why the business reached out to them and invites them into learning more. They can also opt-out of future communications. This is crucial for legal compliance. It also helps to establish the business as a professional entity, and not a spammer.
• Detailed email introduction: This email contains more information about the business, its benefits, and why it should be referred to partners.

Formalize Your Partnership Agreement

A referral partnership agreement describes what your business offers and the timeline that referral partners can expect. Before offering any reward, it is important that all referral partners sign and review a contract. This contract can be helpful in addressing legal issues and will ensure that you are all on the same page.

Onboard and Train Referral Partners

Every new referral partner should take part in a demo or presentation about your products and the partnership agreement. They should be excited to participate and share accurate information with their referrals.

Equip Referral Partners With the Tools They Need to Be Success

Referring partners will refer more if it is easy for them to spread the word. Your partners will be able to share marketing assets with each other, ensuring that all channels send the same message.

• Web page content: While you can create pages for your individual referral partners from your website, it is a smart idea to also provide them with web page content. This will make it easy for clients to find the information they need. This can also help to build trust.
• Social Media Posts: Make packages of images or written posts that are optimized for each network. These will announce your new partnership to your partners on their social media accounts. Include your handle so they can tag it.
• Email Announcement Template: This template makes it easy for referring partners to announce their new partnerships via email lists.

Leverage Attribution

Make sure all your referral partners have specialized Links with UTM codes to make it easy for you and your marketing team to identify the source. This will allow you to give credit to your referral partners even if they forget who sent them. You'll also have data about who is sending the most referrals. If people don't convert or reach out after being referred, this will allow you to refine your funnels.

Show Gratitude to Your Referral Partners

Referral partners should be thanked personally for referring people. In addition to a commission or reward, you should also send them rewards and commissions. You can also send them periodic updates to let them know how many people have been referred, and that you appreciate their help in growing your business.

Referral partner stories are often highlighted by some businesses. You might write a case study about a referral partner that highlights their success or include your top referrers within an email campaign.

Keep the Lines of Communication Open

You should nurture your referral partners, and referral partner leads. You will be remembered by referral partners who have people to refer you, and it will encourage them toward a formal partnership. Sending insights, case studies, success stories of referral partners, and new social media content to each partner, with tracking links, will be a good idea.

Automate

Automating your referral program makes it easy to manage without spending a lot of time. You can automate the following:

• CRM provides progress updates and reminders.
• You can send emails to your partners, including thank you notes or messages for converting a referral.
• Reports internal, including total referrals, deals, and commissions.

Create a Referral Program That Works

Because referral partner programs are very powerful and deliver an abundance of ROMI, they’re one of the first things I set up for my clients as a digital marketing consultant. If you’re not sure how to set yours up or aren’t getting the return you deserve from yours, please contact me for a complimentary consultation.

You can also read this article on my website, How a Referral Partner Program Can Double Your Sales.?

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