If you’ve read our blog before, you’re well-aware that referral programs are effective for companies operating in the digital space. After all, referred customers are 18% more loyal, spend 13.2% more and have 16% higher lifetime values than non-referred customers (source).
We talk a lot about customer referral programs. But if you’re looking for more ways to find new clients, it might be time to link up with other businesses to help widen your reach and amplify your message.
Implementing a Partner Program strengthens your salesforce by letting brand champions, corporate partners and resellers sell for you in exchange for a commission.
You may be thinking that you’ve already set this up by enlisting that well-known Instagram star to post a picture of them using your app, or letting that blogger sprinkle affiliate links throughout their website to drive traffic to your landing pages.
A partner program is much more.
Before we dive into the details of a Partner Program, let’s clarify the differences between the three most common referral strategies that enlist third-parties to help you sell:
- Influencer Programs
- Affiliate Programs
- Partner Programs
What’s the difference between each program?
Each of these programs involves pairing up with third-party brand advocates to send customers to your business. In these types of performance-based marketing arrangements, the third-party is asked to promote your brand and as a reward, is compensated – typically in cash – for the revenue you receive as a result of their marketing efforts.
Although often talked about interchangeably, we can easily distinguish these programs by answering two questions about the business-referrer relationship:
- How closely/often does the business engage with the third-party?
- Is the third-party an individual or a company?
In today’s post, we’re diving into what you need to build and sustain a successful partner program.
What makes a Partner Program?
As pictured above, the relationship between your business and an official partner is characterized by a high level of engagement from both parties. A partner program is formalized relationships with existing businesses who have their own customer base, website visitors or other sales channels, from which you can benefit being exposed to.
The idea is that your partners help you gain a presence in new markets and verticals in order to raise your brand awareness, increase leads and ultimately increase sales.
HubSpot (a developer of inbound marketing and sales software) credits a significant amount of their growth to their partner program, stating that “marketing agency partners represented approximately 42% of [their] customers as of June 30, 2014, and 33% of [their] revenue for the six months ended June 30, 2014.” (source)
A strong partner relationship is built through consistent communication, clear goal setting, and regular check-ins to assess partner needs and progress. Due to the formality of a partnership, the setup process requires more upfront planning, communication, and resource commitment, but has the potential to yield powerful results.
Important elements that make a successful partner program include building win-win relationships with the right partners, creating formal agreements, and committing to ongoing maintenance:
Build Win-Win Relationships
A successful partner program equally benefits both your business and your partners.
A mutually-beneficial arrangement is only possible when both parties have expressed clear goals that can be realistically achieved by working together.
Start by determining your own goals – why are you implementing a partner program? To expand into a new vertical? Promote a specific product? Increase free trial signups? Penetrate a new market?
Next, come up with a value proposition for your partners. Will you reward them with a flat fee for their marketing efforts, or will they receive a percentage commission from every new customer they help convert?
The rewards distribution process is best managed when you leverage a referral software solution. Define your reward criteria once, and automatically pay partners for the revenue they generate, while easily identifying your top performers.
A common frustration is that the partner feels the relationship is one-sided. If you can’t articulate the value you can provide to your partner, you’re missing the point.
Find the “Right” Partners
With clear goals and value propositions in mind, the next step is to carefully enlist the right kinds of partners that align with your brand.
Start by answering these questions about potential partners:
- Can they help us achieve our goals?
- Can their customers benefit from our product or service?
- Does the company have values similar to ours?
- Can they help us reach our target audience in ways that we can’t?
- Do they have a good reputation?
Many companies may want to partner with you, but working with the wrong kinds of partners can be worse than having no partners at all.
Even with the best partners, it’s common for 12 -18 months to pass before you start to achieve real performance through this kind of channel. This is why it’s so important to only be spending time and money on the right partners.
Create Formal Processes
The key to a successful program is to keep a relatively low barrier to entry, while ensuring that your partners are equipped with the knowledge to accurately represent your business’s value proposition to potential customers.
Have a Partner Admission Strategy
Partner programs typically have a much more rigorous admission process than affiliate or influencer programs and may come with some legal obligations.
The admission processes can include paying fees or going through a certification program. This is a great time to ensure your partner’s goals and expectations align with yours.
Due to the formality of the partnership, official partners are often able to state that they are associated with your company and may be listed on your website to represent their credibility.
Take the Time to Train Partners
Partners usually undergo training with your marketing, sales, and/or technical teams to become product experts and understand how they should advertise for you.
It’s a good idea to provide partners with marketing materials such as brand guides and email templates, as it can be detrimental if your brand is being misrepresented.
Shopify created an academy for their partners complete with online courses, exams, and certifications to ensure partners have the tools and knowledge needed to excel.
Offer Ongoing Support
A partner program isn’t something you can set and forget. Unlike affiliate and influencer referral programs, successful partner programs require a higher level of continuous care and maintenance.
Keep partners up-to-date with product developments and industry trends, and continuously educate them on how to sell and overcome roadblocks. For your largest partners, you may even dedicate account managers to each partner to offer personalized support.
Because the development of a partner program requires the ongoing investment of resources, it’s crucial to regularly review the financial value created by each partner relationship. Based on this data, you may want to adjust your partner relationship by changing incentives, providing new resources, or ending a relationship altogether.
Teamleader (a CRM and project management SaaS platform) runs a partner program inviting users to sell their product to other businesses in exchange for a percentage commission.
Candidates apply online to outline their goals and describe what makes them a good fit for the partnership. Once approved, partners commit to delivering at least four customers per year in exchange for cash payouts, discounts, and other incentives.
Teamleader supports their partners’ efforts by providing marketing content such as infographics, templates and images, and each partner works closely with a dedicated Teamleader Partner Manager throughout the relationship.
When done right, a partner program can increase your market reach, overall sales, and accelerate growth. As you’ve now learned, these powerful outcomes are a result of careful planning and maintenance.
A solid understanding of your own corporate goals and what you have to offer will help you identify and attract the best partners, while a clear outline of expectations from both parties will keep everyone on track.
Remember that it can take 12 -18 months before you start to see real performance through a partner program, so don’t be discouraged if the channels aren’t producing immediate results.
Referral program software (pictured above) is a great tool for managing the details and helps you maintain positive relationships with your partners by keeping them engaged and informed. Automatically reward partners through commissions, points, or a custom reward of your choosing, and let them log in to track the status of their referrals for increased transparency.
Dedicated software lets you scale quickly, while managing your spending with refund periods so partners aren’t overpaid when your customers are refunded.