A referral program is an indirect sales channel. The partner has a one-to-one relationship with the prospect and will send leads to you directly. These leads tend to be higher-quality and as such, do not require the same qualification process as what is typically required for affiliate leads.
Referral programs drive high-quality leads. Partners will typically have a relationship with the lead, and as such are recommending the product as they think the customer will benefit from the product or service.
Affiliate programs are valuable for building brand awareness about your product or service.
Typically, they will create content for you in order to drive leads using affiliate links that are embedded throughout the body of that content.
A well-known example of a referral program is Airtable.
Airtable is a low-code platform that has the features of a database but is applied to a spreadsheet.
Airtable offers $10 in credit for each individual you invite. Given that the company is subscription-based, this credit can be applied to your next monthly billing period.
For any SaaS organisation, the goal is to scale revenue, right? There are two methods of selling - your sale team sells the product themselves or an indirect partner sells it for you.
The first option is necessary. The second option, on the other hand, is efficient.
There are a variety of referral partners that B2B SaaS organisations can utilise to gain new customers and extend their reach. The most common types include:
Many agencies have clients who could benefit from your product or service. By partnering with an agency, you can reach a whole new group of potential customers.
For example, on our partners' page, you will see that we partner with best-in-class products that deliver value to our clients.
Your existing customers are often your best referral partners. They already know and love your product, so they're more likely to recommend it to others. Because they are already familiar with your product, they will typically recommend the product to other organisations, who likely fit into your ICP.
The products that your customers also use will typically match your ICP. External sales and CS teams from these organisations are in a great position to spot opportunities for referrals.
Let’s start with the basics. The first thing to consider when building your referral program is deciding what incentives you will offer. What will motivate your existing customers to refer new customers to your business?
Similar to the commission structures identified in our blog post, How to build an affiliate program, organisations can choose from two common structures:
Flat rate - A set dollar amount per lead or conversion
Revenue share - A recurring percentage of revenue generated within a specific time period. This is common for B2B SaaS companies as you typically have varying order sizes, and companies may choose to update their plan on different timelines.
Then, you need to set up a system for tracking referrals. There are two options you can take here:
Links - Referral links are individualized links that are typically distributed through email or other conversational channels.
Lead generation forms - The second option for tracking distributing and tracking referrals is through lead gen forms. Typically forms are a suitable option for referrals that you deem to be more high quality.
In the link approach, The partner is able to track attribution through cookies once the lead converts to a paying customer.
In the form approach, the partner organisation will submit a lead that they think would be a good fit for your product or service. They will already know qualifying information about the lead. From there, your team will qualify the lead and the partner will have insight into the stages of the sales cycle where the lead is at.
Only once the lead converts to a paying customer will the partner be paid.
While you likely already have an ICP and persona set out for your customers, it’s also important to identify the organisations that are ideal fits for your referral program. Access your free ICP template here.
There are a few different approaches you can take to recruiting and growing your referral partner program.
Leverage your customers. Referring to NPS scores, if a customer is identified as a promotor of your product, they might just be the right fit to join your referral program! If you're using HubSpot, add a step to your workflows whereby a message is sent to promotors asking if they would like to participate in your referral program.
Tap into your industry. Get a better understanding of your industry and form relationships with companies that meet your ICP. These companies might just be the right fit for your referral program!
Utilise Partnerstack’s community. Partner networks, such as PartnerStack, bring together a large network of companies that are already eager to participate in relevant partner programs. PartnerStack's PRM consists of 65,000+ partners that you can tap into.
Partnerstack enables growth. The platform has built a community of over 65,000+ partners which will help you accelerate recruiting partners and driving revenue.
The platform automates payment processes. You can even build flexible offers that reward partners based on your custom criteria.