The Problem With Partner Referral Programs
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The Problem With Partner Referral Programs
Vendors can drive higher-quality leads via a partner referral program, but most partners aren't making enough money from referrals to make the effort worthwhile. -
Partner Participation
On average, partner programs had 1,250 partners enrolled in a referral program, with 69% making a referral. Almost half of active partners made between two and 10 referrals in 2016. Another 45% made one referral, and 8% made more than 11 referrals. -
Active Partners
Active partners in a program typically generate 4.6 referral leads per year. For a program with an average of 863 active partners, a vendor can expect 3,970 referral leads. Partners who were previously successful at creating referrals yield a higher average of 6.7 leads a year. -
Referral Rewards in 2016
$101 to $1000: 76%. More than $1,000: 14%. $40 to $100: 10%. Average reward: $182. Maximum single reward: $8,463. -
Lead Conversion Rates
The top 1% of partners by quantity of referrals account for 16% of the overall referral leads generated in 2016, with 16% turning into deals. The top 10% of partners by referral volume are responsible for 53% of referral leads, with 23% turning into deals. -
Importance of Sales Teams
When the sales team played a role in recruiting partners and regularly asking for referrals, those partner referral programs saw a referral lead to deal conversion rate of 41%. -
Partner Rewards
Checks: 60%. Gift cards: 20%. Bank transfers: 20%. -
Types of Lead Referral Methods
While every partner referral program uses a lead form, the report finds that 50% of programs also accept verbal referrals, send emails and share personal urls. 30% use social media, and 10% use print cards. -
Most Popular Lead Referral Methods
81% of referrals are being made using lead forms. Social media comes in second at 13%, and verbal referrals, shareable urls, email and print cards make up the remaining 6% of referral activity. -
Success Rates of Lead Referral Methods
The most successful referral method was the print card, but usage was below 1%. Looking at success rates of methods with the most volume, lead forms topped the list at 37%. Verbal referrals and shareable urls came in at 21%. Social media drove awareness but no closed business. Email was rarely used and didn't produce referrals. -
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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.

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.
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