Do we have enough to motivate Referral Partners?

In a meeting with the senior team of a fast-growing SaaS solution company we were discussing would Referral Partners work for their business.

For this SaaS company, near 100% of their revenues today are through direct sales, with some occasional referrals from partners. The company doesn’t have an active referral partner program. The solution is a point solution, that is a data visualisation add-on for sales and field-based teams. A typical deal requires a minimal level of services to onboard a customer. The question was then whether there was enough to motivate partners.

The points of the discussion are typical within many SaaS companies:

1) What is a Referral Partner and what can we expect from them?

· A Referral Partner is a company or person who has a credible contact with your target customer and decision-makers.

· They are credible in your relevant domain space, such that their recommendation carries weight.

· They need to be able to understand the customers’ needs. They must be sufficiently knowledgeable and have an adequate relationship to be able to ask the right questions to draw out the customer needs. These questions should be your qualification questions that assess both the need and the suitability of your solution.

· Referral Partners need to be sending you Qualified Leads, where they have evaluated the needs and referring quality leads to you. You want more than an unqualified introduction to a decision-maker.

2) What does it take to manage a Referral Partner program?

· Many Referral Partners are not proactive with a steady stream of new leads. So, you can’t afford to be hands-on with a partner with very occasional leads.

· A Referral Partner Program is typically a high volume low-touch model whereby you support partners in groups or self-service as much as possible.

· Ideally, you have a Partner Portal whereby:

o You provide regular content updates and marketing materials to make it easy for the partners to share your content and materials (Partner Enablement & Marketing Supports)

o You allow for Deal Registration and reporting on current deal status.

· You should work to keep Referral Partners as part of your extended marketing and sales teams and communicate regularly, keeping them involved and appreciated.

· If you have customer or user conferences, marketing events or online events, invite them to attend and share with their networks.

· Where you can enable a Referral Partner to be proactive for your solution, then you can put them on a higher partner tier with greater supports.

3) What types of companies would make suitable Referral Partners for our solution?

· With the analysis on your specific market, what are the relevant company types that are interacting with your target customers and decision-makers. In Tenego’s Partnering Strategy and market-ecosystem approach was used to determine the partner types. Your customers could also be Referral Partners.

· Referral Partners are not limited to small consulting and service companies. Solution companies can also be Referral Partners. The size of the companies is not a factor either. It depends on the customer for whom you are solving problems.

· Referral Partners works for enterprise sales too. For example, people who have retired from their corporate positions to start their own business, small or large, have many senior relationships in the industry. These people are knowledgeable, capability, credible and providing services back into their sectors, even large enterprise.

4) Why would any of these companies Refer our solution?

Your proposition for the partners is typically the biggest challenge. A partner will refer your solution if, and in the following order:

i) Your solution solves a problem for their customers. Many SaaS solution companies depend, in part, on referrals from customer and partners in winning new customers. If a consulting company, services or solution company is already delivering to their customers and have an opportunity to help their customer further, they will. They need to know that your solution is relevant.

ii) Your solution enables additional services or sales for the Referral Partner. It’s essential to understand the Referral Partners main business driver. If referring your solution helps them meet their goals, then you are aligned with their business, and they may be proactive for you.

iii) The partner will earn revenue in sales commissions, or referral fees for business gained.

“With minimal resulting services and small deal size, I don’t think we have enough to motivate Referral Partners.”

The first point in motivating a partner is the only essential requirement for referrals. Your solution must solve a need for their customer. Then, enabling additional services or revenues for the partner is the greatest motivator. If you can help boost their business, they will be proactive for you. Some partners won’t accept referral fees or commissions to remain vendor-independent.

There are many other parts to a Partner Proposition to help you be attractive to a partner.

5) How do we test to see if our solution would work with Referral Partners?

There are many components to starting, validating and growing your Referral Partner network and developing an effective, scalable Partner Program.

· Don’t depend on one prospective partner, or even a small number of partners, to validate your partner proposition. It takes time to develop a compelling partner proposition.

· Not all partners are ready to engage when you contact them, so timing is important. You may need to nurture your potential Referral Partners until they are ready.

· A lean, incremental step-by-step approach can be adopted in engaging, onboarding, supporting and enabling Referral Partners while growing your partner network.

The steps to building a Referral Partner Program for this company are being mapped-out along with the success and risk factors. The biggest challenge and risk is how compelling we can make the partner proposition that will motivate the Referral Partners.