How to make money from referral partnerships

Did you know You can expect at least 16% more in profits from referred customers?

This is a super neglected strategy where many business owners are losing out, especially if you’re a B2B. They’re a proven way to bring in qualified leads through building word of mouth and existing relationships. 

It is recommended to have a formal and detailed agreement with another person or business. That person or business agrees to promote your products or services to potential customers.

Every time the referral partner generates a new sale for your business, they earn a commission – a referral fee – as a reward for the successful referral.

What are referral partnerships?

A referral partner is a business who agrees to refer business in exchange for your referral or sometimes payment (affiliate)

When a business has Confidence in your business and you in theirs, that

confidence is transferred through recommendations. This can occur on and offline, and gives you access to their network and contacts. It is important to have the same target market, values and professionalism.

Here are five tips for finding a great referral partner:

  1. Understand their needs and your own, having a mutual understanding
  2. Be like minded in values and beliefs.
  3. Communicate regularly and consistently.
  4. There shouldn’t be crossovers. You should complement each other.
  5. You should define the arrangement and expectations from the beginning.

Why should I have referral partners?

Did you know, 92% of consumers trust referrals from people they know, and they are 4 times more likely to buy based on that recommendation.

What does that mean for you?

Well, your referral Partners do all the selling for you, and when you do get introduced to the person, they are already ‘SOLD’. This means, a shorter sales process for you and a steady stream of new clients. Like also seems to hang around like, meaning that if you have the right types of people in your network, the clients they refer may be just as great.

Referrals can account for 65 % of new deals and is a great marketing avenue, especially when the deal is partially set up before you.

How do I get the most out of referral partnerships?

  • Consider who do your clients need besides you ?
  • Work your trusted network to derive the best value
  • Develop relationships and get to know that business better
  • Stay in your lane and refer on other work. No category creeping. Experts are more referred – General practitioners vs specialists.  Become known as an authority in your field.
  • Form a team or group of up to 10 (although some groups have 20+) Improve culture and hold yourself to a standard. Eg. Business Owners unite

Word of mouth referrals affect the purchasing decision by + 50 % and is the most influential psychological driver for purchasing.

Eg. Cat ref tradies – mentor, master plumbers association, louise bookkepper, mick accountant, greg admin

The 4 R’s of referral partnerships:

  • Relationships
  • Results
  • Respect
  • Reputation

How to get referrals from your customers?

  • Do a good job
  • Ask to be introduced
  • Ask for reviews, testimonials and storymonials
  • Offer incentives/ reward/ loyalty program
  • Competitions
  • Template scripts, introductions or pitches
  • Create sharable content and ask to share

Whatever referral partnerships you have in place it is imperative to nurture those relationships, reciprocate and give thanks. It is harder to convert new clients from a cold audience than it is to convert a warm prospect from a referred trusted partner.

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