We talk a lot about channel partners. Your traditional VAR’s, distributors, MSP’s, SI’s and so on but what about the brand growth crew?

The referral types among us all.

Where do they fit into a channel model?

To answer that question, we need to know who refers who to who.

Anyone can make a referral. It can be a friendly introduction, it can be a share of the final sale price, it can be for a referral fee on every prospect brought.

Several different models support the referral business.

Speaking from an ecosystem model perspective, you can have a referral that brings a prospect to a VAR that then registers a deal with a vendor on the back of that introduction. Same at distributor level.

All leads feed up hill to the vendor.

In our diagram here, the leads can come in from any layer via referral.

Partner level referrals

It could be a customer referral to a partner that has no vendor associated to it. When that the partner qualifies the referral and figures out what they need, they can then register that with the relevant vendor.

Once closed won, the referral partner is paid out at the partner level for a percentage of revenue or a fixed payment.

The vendor and distributor don’t need to know who the referral partner is and the partner takes care of all pay outs to that referral partner.

Distributor level referrals

Referrals at distribution level can be for multi vendor too. The referrer isn’t sure what the customer wants but knows the distributor can provide it. The referral could also be a partner referral at this level.

Once the referral comes into the distributor, it gets qualified, passed to partner or registered with vendor. The lead flow works both ways in this instance. The referral partner is paid out at distribution level on the revenue from the overall deal or a fixed amount for the capture of the initial lead.

Again, the referral partner doesn’t get exposed to the vendor or the partner transacting the deal and is managed and rewarded from the distributor directly.

Vendor level referrals

This is the more traditional way of handling referrals. The referral comes into the vendor and the commission is paid out on the deal that is closed direct by the internal sales team.

This is no longer going to be the norm. Referrals coming into the vendor are now going to be handled by the channel as well as direct.

A referral lead can come in which is registered into the system at the vendor, the vendor can then choose whether to work that direct or pass it to another partner. This enables vendors working with a channel first approach to automatically qualify themselves as an ecosystem. Leads coming in from 3rd party companies and leads going out to 3rd party companies.

All whilst maintaining the flow of the lead, payouts, margins and all in a single solution.

Summery for referral magic

Referrals happen in all industries. They happen at every layer of an ecosystem and channel model. Not only at the vendor. Having the right tools in place to handle these kinds of referral partners across multiple levels have been missing for a long time but that’s changing now. The technology is catching up to run these complex flows of leads in / leads out, money in / money out across multiple tiers of the channel.

Next up, we have an article on the new style affiliate…. It’s a special one because it’s never been done before but we are doing it.

Book a meeting with us below to help you to handle your referrals. Whatever type of company you are.

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