A growing trend that IT companies tend to notice these days is the way channel partners are influencing and introducing opportunities to them, broadening their overall reach.

Typically, referral partners recommend eligible buyers to your company. In exchange, you reward partners with increased deal registration and opportunity identification. (In most cases, a portion of whatever sales they make).

Points-based awards, gift cards, debit cards, and incentive travel programs are all forms of referral incentives. You may also give these quarterly or annually to encourage your partners to compete for the main prize.

Benefits

• Clear result visibility: It is a systematic channel incentive approach since you can see your results.
• Win-win situation: It’s simple to justify the investment in rewarding partners because you don’t pay out until the deal is closed, making it a win-win situation.

Challenges

• New approach: This is a relatively new approach to rewarding channel partners, and many vendors are unsure how to manage a referral program or how much they should pay out to partners.
• High costs: Referral commissions can be higher than those offered in an affiliate program.

Example

Trello incentivizes partners by giving them credit for referrals. What makes Trello’s referral program so effective is its encouraging messages (“adding collaborators to your boards” and “start collecting free gold”) that speak the language of their users.