Referral tracking software enables you to quickly and easily create referral incentives, rewarding individuals and businesses for referring you new clients.
This is a common practice in many industries but it has historically been hard to manage, track and compensate partners for their referrals.
Referral tracking software can make these referral relationships easier and help you to scale a mutually beneficial relationship between your business and partners.
There are really three primary use cases of which we focus on only two in this article:
- Corporate referral partner
- Independent sales agent
- Affiliate or media partner
We will only cover the first two cases in this post but you can learn more about affiliate tracking software here.
Referral Tracking Software and Corporate Partners
The business case of partnering with a corporate referral partner is typically a no-brainer when there is commercial alignment between two businesses. Typically, one of the businesses offers a product that is a complementary addition or a reasonably relevant purchase for the customers of the other company.
Here are some examples of a typical referral program:
- Company A offers life insurance and they partner with company B to capture interest in getting a will. Company A then either posts the information about the consumer into Company B’s CRM and/or forwards the customer to the other company’s call center.
- A customer calls in to order a large order of computer servers from a call center of company A and they upsell the customer virtualization software from Company B, either by taking the credit card and info on the call, or by entering the info into company B’s CRM system for subsequent follow up.
The independent sales agents scenario is a little different but here are some examples:
- An independent mortgage broker that refers their client to a home insurance broker or company.
- An entrepreneurial individual getting friends to register for a vitamin subscription.
- A B2B service provider that pays referral fees to partner companies like their distributors or suppliers.
How Referral Program Software Can Help
So why do people need software to help with their referral program? Here are a few key features:
- Referral partners can easily sign up and provision themselves with what they need to track their transactions
- Referral partners can place orders or leads into the company’s web based order system or lead capture system. This might include posting a lead into a CRM system such as SalesForce.com.
- Accurately track that the lead converted and hence create a commissionable event for the agent
- Easily pay recurring or on lifetime value of new consumers if desired
- Allow the referral partners to log in and view their stats and when they will get paid
- Track performance by partner and potentially give sales managers a view into their specific call center reps
- Reduce time processing payments to the partners. Doing payments and 1099 processing in the USA can be cumbersome and time should be spend on working with the partners to grow performance – not on administrative tasks.
Another nice feature is for referral partners to be able to refer other partners into the program and get a bonus on top what that other partner refers. This essentially enables a multi-level compensation scheme.