The Problem With Partner Referral Programs

By Mike Vizard

Given the fact that a referral lead is vetted on some level by a channel partner, it would appear that there is an opportunity for vendors to drive higher-quality leads via a formal partner referral program. But, as it turns out, most partners are not making enough money from referral leads to make the effort worthwhile. The latest "State of Business Partner Referral Programs" report, published by Amplifinity, a provider of marketing software for managing referrals, finds that the majority of rewards for a lead referral fall in that range of $101 to $1,000. With lead conversion rates falling in the range of 31 percent, that suggests a lot more business could be successfully generated via partner referral programs if they were more worthwhile for the partner. The Amplifinity report finds that 69 percent of partners in 2016 were actively making referrals, but this means that 31 percent of enrolled partners were dormant in terms of generating lead referrals. Naturally, most partners are squarely focused on generating leads for themselves. But over the course of those efforts, they generally uncover a lot of opportunities that are not specifically related to their core capability. The challenge facing vendors is figuring out how to better reward partners for generating those leads.

This article was originally published on 2017-08-22
Mike Vizard

Mike Vizard has more than 25 years of experience covering IT issues in a career that includes serving as Director of Strategic Content and Editorial Director for Ziff Davis Enterprise.