A referral partner is a business associate who recommends a particular company and its services in exchange for something of value. If the recommendation results in a sale, for example, the company might reimburse the partner when the deal closes with a percentage of the earnings or a pre-determined monetary reward called a referral fee.
A referral program encourages the idea that partners can still benefit financially when faced with business opportunities that are not tied directly to their business' core products. By establishing partner relationships, a business can still benefit from nurturing a business contact who otherwise would not bring in income. Referral partners can help managed service providers (MSPs) generate new sales leads from referrals in addition to methods such as list rental, cold calling, participating in trade shows, joining industry organizations and advertising online.
Channel and referral networks that include customers, strategic partners and other professional providers can help to scale a partner's business beyond its own four walls by introducing new concepts for referring business out and accepting new business. A base of satisfied customers is essential to participation in a referral network, which relies upon both word-of-mouth and social media buzz. When used effectively, such referrals can potentially expand a partner's geographic reach, create demand for an MSP's unique offering and increase new customer acquisition.
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Posted by: Margaret Rouse