Creating the Framework to Support a One-To-Many Sales Model

If you have followed this series of articles discussing the one-to-many sales model, you’ll already understand why referral partner programs could be the difference that helps you to burst through your sales targets. If you haven’t, then you might like to read them before you read this article:

  • Networking Sales Strategies: The One-To-Many Sales Model

  • How to Build a Referral Partner Program

  • How to Get Referral Partners

In this article, you’ll learn about structuring your referral reward system. This will help to ensure that your program produces the results it is capable of, and continues to incentivize your referral partners to drive new customers your way.

How to structure a referral program

There are three major stages in developing a framework for a successful referral rewards program:

  1. One-sided or two-sided rewards – which is best?

When deciding how to structure your referral rewards, the first thing you must decide is who to reward. Usually, you will make a one-sided reward to your referral partner. This helps to motivate your partner to make referrals, right?

You could also make a one-sided reward to the customer who has been referred to you. On the other hand, you might reward both the referring partner and the customer.

Incentives encourage referrals to be made (one-sided partners and two-sided) and customers to make purchases (one-sided customers and two-sided). The giving of an incentive also helps you to strengthen relationships with your partners and customers.

However, there is a fine line between giving rewards to incentivize and giving rewards merely to win new business. Thus, your reward system must be genuine, your message authentic, and your products or services top-notch.

Why give a reward to the new customer? Giving a reward to the referred lead helps to convert them to a customer. The promise of a reward could be the encouragement they need to reach out to you, make a purchase, and broaden your customer base.

One-sided rewards are generally best for companies that need to improve awareness of their products and services. They can revolutionize sales of subscriptions and frequent purchases. Often, these are incorporated into tiered referral programs. For example, a new customer who signs up and pays for a 12-month subscription will receive a bigger discount than one who signs up for a 6-month subscription.

Two-sided reward systems can deliver the most customers. You might offer the same or different rewards for both parties. It also gives your referral parties a way to reward their referrals. However, it’s more complicated to manage – you’ll need good software to track the rewards you give.

  1. Decide how you will reward

Once you have decided who you will reward, you’ll need to decide how. Here are a few of the most popular reward methods:

  • Cash

This is a favorite way to reward. It can be a fixed incentive (say, $x for each lead that delivers a sale) or commission-based (x% of each sale).

  • Credit

Another way to incentivize referrals is to give a credit against the cost of purchases that the referred customer makes with you. This keeps the reward rolling back to your business. You could combine this with a credit for the new lead to use against their first purchase.

  • Discounts

Commonly used to incentivize a lead to make a purchase, this rewards a new customer.

  • Free/reduced subscription periods

If your business operates on a subscription model, you could offer a discounted or free subscription period. This can be used to incentivize both your referral partner and the new customer. It can also be used as a tiered reward for referral partners – the more successful referrals they make, the higher their subscription discount or longer the free period.

  • Charitable donations

Less common, but delivering a meaningful reward where your referral partners and new customers have a focus on creating a purposeful business. Using this type of reward, you will donate the referral reward to the good cause chosen by the referral partner or new customer.

The type of reward you give will depend upon the type of product or service you provide, the frequency and size of purchase, and what will incentivize referrals and purchases most. You will also need to consider if you will give a reward for each referral, or, perhaps, for a set number of successful referrals.

  1. Create your rewards framework

The final block to put into place is to create a framework for your referral rewards structure. You’ll need to decide when to reward, how to deliver the reward, and how you will manage your rewards system internally.

Finally, you must consider how you will present and explain your referral process to your partners, and how you will explain what makes a good referral. You’ll need to identify who will deliver this message, and ensure that it is delivered correctly.

Are you ready to launch your referral partner program?

With the right referral rewards and the right referral partners, your business could have the potential to explode through its sales targets. 

The one-to-many sales model is more efficient than marketing and selling to one customer at a time. Your referral partners become your advocates, and because they hold trust from those they’re referring, you are more likely to close new leads.

Rewards motivate referrals and purchases, and incentivize partners to work for you. Creating and launching a referral rewards system helps to shift your referral partners from being passive to being active – and that’s when sales growth will take off.

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Publish Date: 5/28/2021 12:00:00 AM
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Creating the Framework to Support a One-To-Many Sales Model
If you have followed this series of articles discussing the one-to-many sales model, you’ll already understand why referral partner programs could be the difference that helps you to burst through your sales targets. If you haven’t, then you might like to read them before you read this article:

Networking Sales Strategies: The One-To-Many Sales Model

How to Build a Referral Partner Program

How to Get Referral…

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