Building a Referral Program for Startups

I am a big fan of referral programs, as long as they are structured properly. The reality is that most "reseller" partners are glorified referral partners that are getting a margin that exceeds the contribution they are making, and in many cases a vendor is better off with pure referral partners. The key considerations include: ✅ Defining what qualifies as a referral - it should include a company name; the name and title of a decision maker or champion; a defined need or project; and at least a rough idea of the opportunity size ✅ The duration of the agreement - is it a one-off opportunity or an on-going relationship? If it is on-going we prefer to structure it as a one-year term that automatically expires unless renewed in writing by both parties ✅ Deal registration - make sure the referral partner is protected and gets paid ✅ Compensation - the typical rate is 10%, but this can be tiered based on a number of factors: 🔸 How involved the partner is in the sales process - is it just a hand-off, or do they help manage the sales process? 🔸 The number of referrals per year. For example, 10% for fewer than 5; 15% for 6-10; 20% for more than 11 🔸 The close rate - pay a higher referral fee to partners that send you deals that you close more often and/or faster. 🔸 One-time fee, or do they get paid on renewals? Referral partners come in different flavors: ☑ Traditional channel partners (SIs, VARS, MSPs, etc.) that do not want to take responsibility for the sales and support ☑ Industry consultants that have great customer relationships for their core service, but are not resellers ☑ Your existing customers - offer them a discount of 10% on their own subscription for every related entity or other companies they refer and that become your customer (closed sales, not intros) ☑ Other vendors with complementary solutions. Referral partners are a great way to drive a pipeline of qualified prospects at a very low Customer Acquisition Cost. For many vendors they will be more productive, less frustrating and easier to manage than a traditional channel program. Book an appointment for no-nonsense advice on building a productive channel. #Channelprograms; #P2P; #ISV

Here's the perfect solution if you want more 𝐫𝐞𝐟𝐞𝐫𝐫𝐚𝐥 𝐫𝐞𝐯𝐞𝐧𝐮𝐞. When we think of generating more leads, we usually think of - Running paid ads - Sending cold emails - Posting organic content But somewhere along the way we completely shifted away from the thing that got us here... referrals. You probably haven't re-visited your referral strategy in a minute so here's the playbook to revamp and get your network excited to send you more clients. ➡ Incentivization - most referral payout structures kinda suck. 10% of contracted, $500 flat fee, it just doesn't really get anyone excited to get out of bed and start hunting for you. ➡ Consider gamified tiered payouts - Each of our referral partners start at a base referral fee of $1,500. But they can actually make upward to $3,000 per referral if they do the following: ♦ Leave us a LinkedIn recommendation? +$500 their referral is now worth $2k. ♦ Leave us a Google Business Review? +$500 referrals are now worth $2.5k ♦ Shoot us a testimonial? Yep, +$500 Now we're building our social proof, the referral partner's payouts are moving up, and they're stoked they make $3k for every client they bring us. ➡ Payouts - SPEEEEEEED. So crucial, and we've made this mistake of not paying our referral partners fast enough. This is a quick way to never get referrals. ♦ Always incentivize. If they refuse payment then send them a gift that is worth the referral fee (their favorite sports player signed jersey, the top tier equipment for a hobby they are into, etc.) ♦ Outline your terms of payment. We only send out payments via paypal, it keeps things simple on our end. ➡ Call and Contract - Get on a call with every person you want in your referral network. Pitch them on your referral structure, show them how it works, where it benefits them, and ask for them to commit. ♦ If you get the green light, get it in writing. A really simple contract that just states how they will get paid, when they get paid, etc. Getting it in writing makes it serious and it will stay top of mind for them when they are networking. It's a simple list, but an effective way to bring your referral network back to life. What are some ways you are currently incentivizing clients and partners to bring you more referrals?

Referrals might be the most underused growth lever in B2B! Everyone talks about them. Few actually operationalize them. At Sendspark, we’ve made referrals a core part of our GTM motion—and it’s driving real revenue. Here are 3 ways we’re turning referrals into pipeline (and closed deals): 1. Offer Free Access in Exchange for an intro We don’t have a free plan. So when an SDR signs up and drops off before payment, we don’t just lose the lead. Instead, we offer them a free Sendspark seat—if they are open to making an exec level intro. It’s a win-win: They get value. We get a high-leverage referral. This simple play helped us close two enterprise deals last quarter. 2. Operationalize Referrals with Tech Referrals don’t have to be manual, there are plenty of tools out there that can help you automate the referral process. Here’s what we use internally. FirstPromoter– An easy affiliate tool where our fans get a link to share Sendspark and earn $ when someone signs up. Product- Embedded Referral Links – We let users include referral links in the videos they send. When someone loves the video and signs up → the sender gets paid. Commsor 🦕 – Shows us overlaps between customers, investors, and influencers. Perfect for uncovering warm intro paths we wouldn’t have seen otherwise. 3. Just Ask If you’re a CSM doing a QBR... Or an AE who just closed a deal... Ask: “Is there anyone else in your network who could use something like this?” Worst case? They say no. Best case? Warm, qualified lead! Creating a scalable referral motion is something that add incredible growth to your business! If you don't currently have a referral program in place, why not? #saas #sales #growth

83% of people say they’d refer a product they like, but only 29% actually do. (Source: Texas Tech University via SaaSquatch) That stat should haunt SaaS founders. Because if your pipeline relies on happy customers to spread the word, and they don’t… You’re leaking referrals you never even knew you had. Here’s the issue: Most founders "assume" goodwill turns into growth. But satisfaction ≠ advocacy. You need a system. Here’s the one I use. I call it the Referral Flywheel: 1. Start with 1 happy customer.     Ask them: “Who else do you know who struggles with X?” (Be specific.)     2. Make the ask easy.     - Write the intro for them. - Include a benefit-driven reason to connect.     3. Follow through fast.     - Add value before pitching. - Share a resource, give context, offer a quick win.     4. Deliver again.     - If they convert? Overdeliver. - That new customer becomes your next node in the flywheel.    One good intro should lead to five more — if the loop is tight. But most loops are broken because there’s no nudge, no follow-up, no system. Referrals aren’t random. They’re engineered. And when done right, they’re the highest-converting leads you’ll ever get. → Don’t wait for word of mouth. Design for it. Curious how to engineer a referral loop inside your daily LinkedIn flow? That’s what we built Less Busy for. Get it here for free: https://lessbusy.com/

The greatest sales hack is hiding in plain sight: Your current customers. Yet 70% of B2B companies ignore this goldmine completely. Here's the referral playbook that turns advocates into your fastest growth channel: 1. "Start with advocates, not everyone" ↳ Use NPS scores to identify your champions first ↳ Build a shortlist of 20-30 happy clients before launching 2. "Make the ask brain-dead simple" ↳ Say this: "Do you know another leader facing [specific problem]?" ↳ Provide one-click email templates they can forward immediately 3. "Give before you get" ↳ Spotlight referrers in newsletters and webinars ↳ Offer exclusive access to beta features or advisory councils 4. "Bake referrals into your sales motions" ↳ Reps ask after contract signatures and ROI wins ↳ Customer Success adds referral slides to quarterly reviews 5. "Automate the system for scale" ↳ Set CRM triggers after key milestones hit ↳ Run quarterly "referral sprints" to boost team awareness The numbers don't lie: ↳ Referred leads close 4x faster than cold outbound. ↳ They deliver 16% higher lifetime value over time. ↳ Referral programs cost 90% less than new logos. Your best customers want to help you succeed. You just need to make it easy for them. What referral strategy worked at your company? Share in the comments below. ♻️ Repost to help your network build referral engines 🔔 Follow Ali Mamujee for more growth strategies.