The Problem With Partner Referral Programs

The Problem With Partner Referral Programs

The Problem With Partner Referral ProgramsThe 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 ParticipationPartner 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 PartnersActive 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 2016Referral 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 RatesLead 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 TeamsImportance 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 RewardsPartner Rewards

Checks: 60%.
Gift cards: 20%.
Bank transfers: 20%.

Types of Lead Referral MethodsTypes 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 MethodsMost 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 MethodsSuccess 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.

Michael Vizard
Michael Vizard
Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a contributor to publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

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