How to build a referral sales channel for your business
What is a referral sales channel?
• your group of selling partners who refer opportunities for your sales reps to close - because doing so helps their business.
• a systematic way to cooperate with companies, where adding your capabilities to their offering helps them increase sales in their main line of business.
• a low cost, low risk way to create new opportunities for your business.
Why start a referral sales channel?
• increase the efficiency of your sales force (it is easier to close qualified referrals introduced by known partners; your sales force can spend more of their time selling, less time searching).
• increase your industry and market reach at low cost (explore new markets; no additions to your staff required until increasing sales make it necessary, a good problem to have!).
• less expensive, less work and much less risk than establishing and supporting a conventional sales channel which is expected to close sales of your products/services, rather than simply to introduce interested prospects to your business.
How can I make a referral sales channel effective for my business?
1. Create significant business benefits for your referring partners (over and above the commission they earn).
For best results, working with you needs to offer your referral partners something which helps them overcome a problem they face, or helps them close more sales in their core business. The commission they would earn from referring you into their accounts or to prospects is secondary (although important) to the real business success of any working arrangement.
This means you have to understand their business, problems and competitive pressures well to understand how you can help them succeed, and to select prospective partners with this in mind.
2. Respond to your referral partners' prospects as well as you do for your own, and be able to ramp up your delivery volumes as your strategy becomes successful.
Providing a good experience for your referral partners and their prospects is key. Especially at the early stages of the relationship they will be concerned about their reputation and customers, and will be paying attention to this more than they will be looking forward to immediate benefit. A good experience working with your business will be well rewarded.
• your group of selling partners who refer opportunities for your sales reps to close - because doing so helps their business.
• a systematic way to cooperate with companies, where adding your capabilities to their offering helps them increase sales in their main line of business.
• a low cost, low risk way to create new opportunities for your business.
Why start a referral sales channel?
• increase the efficiency of your sales force (it is easier to close qualified referrals introduced by known partners; your sales force can spend more of their time selling, less time searching).
• increase your industry and market reach at low cost (explore new markets; no additions to your staff required until increasing sales make it necessary, a good problem to have!).
• less expensive, less work and much less risk than establishing and supporting a conventional sales channel which is expected to close sales of your products/services, rather than simply to introduce interested prospects to your business.
How can I make a referral sales channel effective for my business?
1. Create significant business benefits for your referring partners (over and above the commission they earn).
For best results, working with you needs to offer your referral partners something which helps them overcome a problem they face, or helps them close more sales in their core business. The commission they would earn from referring you into their accounts or to prospects is secondary (although important) to the real business success of any working arrangement.
This means you have to understand their business, problems and competitive pressures well to understand how you can help them succeed, and to select prospective partners with this in mind.
2. Respond to your referral partners' prospects as well as you do for your own, and be able to ramp up your delivery volumes as your strategy becomes successful.
Providing a good experience for your referral partners and their prospects is key. Especially at the early stages of the relationship they will be concerned about their reputation and customers, and will be paying attention to this more than they will be looking forward to immediate benefit. A good experience working with your business will be well rewarded.