Traditional go-to-market (GTM) strategies for B2B SaaS companies are broken.

Outbound is declining in effectiveness. Ads are getting more expensive and attracting less clients. Mass cold emails are thrown into the spam folder, especially with Google’s 2024 crackdown on cold emails. 

What about inbound? The market is overloaded with content, and buyers are tuning out of the chatter.

So how can your B2B SaaS company cut through the noise? A B2B referral program might be the answer.

What is a B2B referral partner program?

A B2B referral partner program is a way for businesses to promote their product or service by asking third parties to refer a new customer.

One excellent example is Framer's partner program.

Framer's partner program encourages creators, agencies, and freelancers to promote Framer's web builder through word-of-mouth referrals. When a referral turns into a customer, Framer rewards the referrer with a commission.

Note that a referral partner program is different from a user referral program.

A referral partner program leverages third parties such as consultants, agencies, and vendors to advocate for your product or service. On the other hand, a user referral program encourages existing users to refer new customers to you.

Why invest in a B2B referral partner program?

According to a 2024 report by Ebsta and Pavilion, partner referrals make up only 10% of the pipeline, yet they contribute to 31% of revenue. In fact, they are the largest source of revenue.

So what makes partner referrals so effective for sales?

Higher conversion rate

Based on a study by Wharton, referral leads have a 30% higher conversion rate and 16% customer lifetime value than leads generated by other marketing channels.

Trust and credibility

According to a Harvard study, 90% of B2B buying decisions are influenced by recommendations. 84% of B2B buyers start the buying process with a referral. This endorsement carries a lot of weight, as they are built on trust.

Faster sales cycle

A Forbes article indicates that 69% of companies with a referral program report faster closing cycles.

Lower CAC

A B2B referral partner program is the most cost-effective way to acquire customers. Research by Wharton finds that referral programs reduce customer acquisition costs by up to 25%

Is a B2B referral partner program right for my company?

While a B2B referral partner program can be game-changing, GTM leaders need to consider whether it is suitable for their company. Generally, B2B referral partner programs work well for businesses that:

• Have complementary products or services that cater to the same target audience. For example, a CRM company may partner with an email management software company.

• Operate in non-competing, adjacent markets where their offerings can create added value for each other's clients. For example, a sales agency may partner with an email workflow platform to refer clients seeking sales automation plus sales consulting services.

  
  

5 steps to start a high-performing B2B referral partner program

Developing an effective B2B referral partner program requires careful planning and execution, and designing a well-thought-out plan will ensure your program will benefit your referral partners and generate consistent revenue. 

Here are 5 essential steps to consider for implementing a B2B referral partner program:

1. Identify the right partners. 

Anyone can refer clients to you, but are they relevant to your business? If not, then you’re wasting your precious resources.

That is why it’s crucial to define your ideal referral partner (IRP) before you design a referral partner program.

Consider the following questions when thinking about who your ideal referral partner is:

• What are some interests that they share with you? 

• Do they share a similar pool of clients without potential for conflict?

• How can you be of value to their network, and how can they be of value to yours?

By asking these questions, you can easily identify referral partners that are ideal to your business and expand your referral network with purpose. 

2. Establish clear expectations for referral partners

Once you have selected your potential partners, the next step is to plan out the guidelines for your partnerships.

Schedule a meeting with your would-be partners and outline the commission or revenue-sharing structure of your referral partner program and the expectations for both parties. 

Then, once all aspects have been agreed upon, formalize the content of the discussion with a referral agreement. 

Remember: For the partner program to succeed, both parties must always benefit from the partnership. Do not expect to reap significant value without benefitting the other side. 

3. Train and educate your referral partners

To ensure partners are communicating the right message about your product, it’s important that they understand the basics of your offering. 

Set up a 1-hour presentation about your SaaS product and answer any clarifying questions to help your partners get a clear idea of who they can recommend your product to. Some topics to cover include:

• Who are your ideal clients?

• What sets you apart from your competitors?

• What are some powerful success stories you would like to tell your clients?

Additionally, make sure you provide as much information about your company and product as possible online so your partners can also dig up relevant information on their own. That includes updating your website, videos, and other online materials. 

4. Foster ongoing communication

Whether referral partners need support, always maintain open lines of communication with your partners. 

Choose communication channels that work best for your partners. This could include email updates, video conferences, Slack channels, etc.. Also, be sure to give regular updates and address any questions to ensure they stay informed and continue driving relevant referrals.

5. Measure and optimize

To iterate the process and drive data-driven optimization, it’s key to implement a robust system for tracking referrals and attributing leads and sales.

Monitor metrics like lead volume, conversion rates, and revenue from referrals closely. Use these insights to evolve your partner criteria, tweak commission rates as needed, and enhance training or support.

While this may be a tedious task, fortunately you don’t need to do this on spreadsheets. Consider implementing a Partner Relationship Management platform to automate the process.

By implementing these best practices and leveraging the power of referral partnerships, businesses can unlock new avenues for growth, expand their customer base, and strengthen their competitive advantage in an increasingly crowded marketplace.