RK FISCHER & ASSOCIATES         
((877)504-2049    
   Serving Canadian Owner-Operated Businesses
 Open M-F 8:30AM - 5:00PM
RKFISCHER
  • Home
  • Coaching
    • General Business Coaching
    • Strategic Planning Coaching
    • Sales & Marketing Coaching
    • Sell Your Business Readiness Coaching
    • Start-up Coaching
  • Advisory
  • Consulting
    • Strategic Planning Services
    • Planning Services >
      • Financing
    • Assessment Services
  • Resources
    • Business Blog
    • Business Downloads
    • Online Tools >
      • Business Performance Assessment
      • Marketing & Sales Assessment
  • Our Store
  • About Us
    • Our Management
    • Our Professional Affiliations
    • Our Success Stories
    • Client Testimonials
    • Our Warranty
    • FAQs
  • Book Appt
  • Contact
  • Home
  • Coaching
    • General Business Coaching
    • Strategic Planning Coaching
    • Sales & Marketing Coaching
    • Sell Your Business Readiness Coaching
    • Start-up Coaching
  • Advisory
  • Consulting
    • Strategic Planning Services
    • Planning Services >
      • Financing
    • Assessment Services
  • Resources
    • Business Blog
    • Business Downloads
    • Online Tools >
      • Business Performance Assessment
      • Marketing & Sales Assessment
  • Our Store
  • About Us
    • Our Management
    • Our Professional Affiliations
    • Our Success Stories
    • Client Testimonials
    • Our Warranty
    • FAQs
  • Book Appt
  • Contact

Small Business Blog

2/11/2015

0 Comments

Implementing a sales Referral program

 
Sales Referral Program
A Referral Program can be one of the best and most cost effective ways to generate leads for small businesses, but is highly underutilized.  This is most likely because large businesses implement them and many make it as difficult as possible to participate and understand. For this reason,  small business owners do not feel they have the staff or bandwidth to implement one successfully. They then miss a great opportunity.

We all work on our business networks in hope that people we deal with and know will refer business our way and in a lot of cases they do.  But think for a moment, these same people in our networks are also looking for leads from us as well and there are only so many leads to go around.  If you know two companies that do similar business and you know both are good companies – who would you refer business?

Implementing a referral program can be very easy and will increase your chances of receiving qualified leads.  You only pay the referral partner when the lead closes, so there is more of an incentive to qualify the leads provided,  versus giving your name or business card out to people they know and telling them to give you a call.  You do not have to have a sophisticated system for tracking.  If you can have forms on the web, it makes it easier, but I have run several referral programs in small and medium size businesses with Excel or Word based forms.  The key is to having a set process. 

Step 1 – Set Guidelines for Your Business
There should be a mini contract which outlines the rules and regulations for your program.   This needs to be simple to understand and they need to agree to the rules before you take them on as a referral partner.

  • Set a time frame for how long the lead is good for.  This will differ depending on your sales cycle. Most referral programs that I have seen for products or services with a  3-6 month sales cycle allow the cut-off for a lead to be 6 months.  If the lead has not closed in that time period, you can decide whether the referral partner can re-submit the lead, or whether it is a dead lead.

  • Determine if the lead provided meets your criteria for a client, otherwise you will waste your and referral partner’s time as well.  When they submit a lead, make sure to get back to them in a short time period and let them know whether you accept the lead.   Another criterion for non-acceptance would be if someone in your organization has already been in contact with the lead or they have been an existing client in the past.  This is all up to you depending on what rules you want to set.

  •  If the lead closes you need to determine how much you will pay for the lead.  Typically this is a set percentage of the overall revenue collected.  This can be anywhere on average from 5-10%.   Do not be greedy here.  Set an amount that will motivate your partner to provide you with qualified leads.   Think about the cost and time it takes for you to get a lead and the sales cycle involved. This lead should already be pre-qualified, so your sales cycle should be shorter.

  • Determine whether you want to pay the referral partner for any ongoing sales generated from the customer account.  For example, many pay referral programs pay a referral fee on that account for a set amount of time.  This is entirely at your discretion.

  • Determine how often you will pay your referral partners. You want to make sure that you have collected the revenue from the client and leave enough time to account for any returns.   The suggestion would be to pay quarterly.   The referral partner will need to be made aware of the sales that were closed and amounts in order to invoice.  You will need to be aware of what taxes apply based off your local tax laws.


Step 2 – Application of the Referral Partner
There should be a short application that the referral partner fills in providing whatever background information you want to keep on the partner. 
  • This should be fairly basic with contact and company information about the partner.

  • You will need to determine any reasons to reject a referral partner.

  • Your rules and regulations should be outlined as part of the application and either have them agree to them online or sign and return in a document.

  • You need to let the referral partner know that they have been accepted.


Step 3 – Lead Application
There should be a form online or one that the referral partner submits to you in a document format.  The form should have as much information as you feel you need to qualify the lead. This will differ by business.  You will need to capture all of the contact information about the business.

  • The referral partner should know that this should not be a blind lead and should not be a shock to the prospect that you are calling, so you might ask about any prior correspondence between the two parties.

  • Once they submit the lead, you should quickly determine whether you are going to accept the lead and let them know.  If you accept the lead, you will need to supply the referral partner with how long the lead is valid in a very short time period such as 48 hours.

Step 4– Lead Tracking
All leads should be tracked. This can be as easy as tracking them in a spreadsheet.
  • You need to track when they close and how much money you owe the referral partner.

  • Contact the referral partner and let them know the list of leads that closed within your time payment period and the amount of the invoice that needs to be submitted for payment.

  • You also need to contact all referral partners when their leads expire as well.

  • This is not a complicated process or program to implement and can prove to be a very cost effective way to generate leads and create a low cost channel to market for a small business.  If you have a group of trusted referral partners who provide qualified leads to you on an ongoing basis, this will help reduce some of your overall sales and marketing expenses. 

  • You will need to advertise that you have a referral program on your website and in other materials.  Good referral partners could be consultants from your industry, vendors,  and companies that sell complimentary products and services.  If you use sales agents or resellers,  you might even start them off as a referral partner first to see how they perform and pay them a bit more if they are involved in the sale.
​
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Author

    RK Fischer & Associates
    Our Canada business blog provides you with articles and small business advice across different areas of your business and in support of our  business consulting and business coaching practice. 

    Categories

    All
    Accounting
    Accounts Receivable
    Bookkeeping
    Branding
    Budgeting
    Business Coaching
    Business Consulting
    Business Financing
    Business Growth
    Business Moving
    Business Performance
    Business Plan
    Business Planning
    Business Presence
    Business Problem Identifiication
    Business Profitability
    Business Results
    Business Risk
    Business Strategy
    Business Success
    Business Value
    Buying A Business
    Cloud Software
    Coaching & Practice
    Cold Calling
    Financial Plan
    Financials
    Financial Stewardship
    Google Analytics
    Growth Business
    Hiring Employees
    Hiring Interns
    Human Resources
    Improve Bottom Line
    Increase Business Value
    Increase Productivity
    Investors
    Lifestyle Business
    LinkedIn
    Marketing
    Marketing Budget
    Marketing Plan
    Marketing Tools
    Market Research
    Metrics & Measurement
    Networking
    Productivity Improvement
    Purchasing On Price
    Purchasing Services
    Responsive Website
    Sales
    Sales Hiring
    Sales & Marketing Assessment
    Sales Pipeline
    Sales Process
    Sales Proposals
    Sales Referral Program
    Search Engine Optimization
    Selling Business
    Social Media
    Stagnated Growth
    Target Market
    Tips & Techniques
    Website Mobility
    Website Prospects
    Website Purchase
    Website Surveys

    RSS Feed


Our offices are located  in Southwestern Ontario but we are able to provide most of our services across Canada as most services are performed remotely.

We will provide onsite services that require at least one  day onsite  in Sarnia, Chatham-Kent, London, Windsor, Woodstock, Leamington, Waterloo, Cambridge, Kitchener,  Guelph, Milton, Oakville, Mississauga,  Burlington, Hamilton, Toronto, Vaughan, Markham, Brampton, Richmond Hill,  Newmarket, Whitby, Oshawa, Ajax, Pickering, Uxbridge, Pickering and  surrounding locations in the GTA and Southwestern Ontario.
​
For other businesses in Canada who want service onsite and are outside our onsite area, please contact us to discuss your requirements as outside our outlined area will require fees for travel & living. For businesses in the United States, our services are performed remotely in Canada utilizing Zoom for online meetings.
Copyright RK Fischer & Associates, 2010- 2019.  All Rights Reserved
Our Privacy Statement