Referral Incentive Programs for Long Tail Partners

August 7, 2018 Claudio Ayub

What type of incentives are more effective with long tail partners?

Alright, so let’s first define long tail partners. These are the partners who rarely engage with your brand, but still send you a few worthwhile deals in any given year. Most vendors don’t pay much attention to long tail partners because of the cost of engaging them through their full-blown partner programs, which require a high upfront investment for on-boarding, enablement, and productivity, let alone incentives!

So, getting back to your question, the typical transaction-based incentive, be it a spiff (individual level) or rebate (company level), will not generate much interest with these partners. These partners are opportunistic about their engagement with your brand and their sales volume will never be enough to merit a rebate. The same is true for individual-level incentives at the sales rep level, because the spiff won’t be top of mind. And don’t even think about behavior-based incentives for long tail partners.

So that’s the bad news. The good news is top-performing vendors have found that partnering with long tail partners based on referrals delivers strong results. Building an incentive strategy around referrals is an ideal way to engage these transactional partners, and give them an easy, automated way to submit deals. As partners find opportunities where your product is identified as the solution, they refer the lead to you via a referral promotion. Your CRM/PRM receives the referral as a lead, and your team then engages in the relationship, takes the opportunity through the sales process, and ultimately closes the sale.

If you are already running an incentive promotion for deal registration, you can use the same workflow to launch a referral promotion, where the sales rep earns a spiff or points for registering a deal (a percentage of the close deal benefit), and the partner company earns a rebate upon deal closing. With referral incentive programs, you can manage a large number of these partners very efficiently and effectively.

Remember, long tail partners are shrewd and know how to engage with your program, so you won’t have to modify your existing processes. 

Also, by aligning individual- and company-level incentives, all stakeholders have earning and redemption opportunities that align to their business model and provide tangible benefits. Top performing vendors have found that aligning both partner/owner’s and their employees’ incentives to achieve the same goals increases the probability of achieving revenue goals and other objectives.

Keep in mind that best-in-class vendors today are using pre-sales incentives (referral - deal reg not closing) to gain the partner’s attention and commitment to a process they are less likely to abandon. When partners invest their time on a referral, they are more likely to engage with your company when you reward their pre-sales activities.

There is a lot more details behind referral programs, so if you found this useful drop me a line to continue the conversation. Ciao!


 

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About the Author

Claudio Ayub

Chief Strategy Officer Claudio Ayub brings over 20 years of global channel marketing experience to Perks.He has executed major go-to-market programs for a variety of vendors, including Bing, Cisco, Dell, EMC, IBM, Kaspersky, Lenovo, Microsoft, Motorola, Seagate, Symantec, and VMware among others.

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