• Bryan Socransky

Referral programs in B2B SaaS and enterprise software are a utopian dream

Here is a secret that will save you lots of time and wasted effort –referral programs never work at scale. No company or person is going to devote time and effort to fill your pipeline with referrals in return for a referral fee of $200 or a commission of 5% of the sale price.

Would you be willing to have your sales team provide referrals to other companies in return for a 5% commission? Do you want your salespeople 100% focused on selling your products or distracted by other companies’ products? Why would you expect other companies to invest in your referral program if you are not willing to do the same?

Yes, you might get the occasional blue sky deal that comes across. A project that you didn’t know about, where the referrer has the inside track. This is rare but it can happen. So, you should have a referral program to catch these occasional gifts. But...

don’t spend lots of time and energy on a referral program. It will never be a significant source of leads.

As an alternative, you should focus on building out a real partner program. Develop a partner ecosystem. This should include value-added reseller (VAR) partners. They can bring in incremental sales by selling into vertical markets that your direct sales force cannot reach. Recruit ISV partners, who augment the value of your software platform by extending the functionality. Develop alliances with systems integrators (SI). They can deploy your software at customers as part of large transformation projects. These are all activities that can result in increased sales.

Enough tinkering with your referral program. It is a utopian dream that will never lead to the flood of referral leads you hoped for.

#b2bsaas #saas #partners #partnerships #channelsales #alliances #enterprisesoftware

About the Author: Bryan Socransky is the Principal Consultant of Disruptive Consulting Group. Bryan's experience spans over 25 years in some of the most competitive B2B sectors including enterprise software and SaaS. Now he is applying this experience to help small and medium-sized B2B tech companies grow.