By Dee and Emily Karawadra
One of the most valuable recommendations we were given early on in building our ISO was to build a solid referral partner channel. We took that advice to heart and have worked over the years to build strong relationships with businesses or networks that have, indeed, helped us grow.
Using partnerships to grow your ISO or merchant level salesperson (MLS) business is a smart business practice. Partnering with other dedicated, reputable professionals and companies drives market awareness, associates your brand with reliable brands, opens doors to new customers, and can even provide value-added products and services.
There are different types of referral partners. The level of engagement and the agreements entered into to manage the relationship can often define the success of the partnership. Some partners are strictly sales referral partners: they flip leads over to your organization, and you are responsible for courting and closing the business.
Some partners remain on a referral only basis throughout the course of the relationship. However, the relationship between your organization and the referral partner can grow and expand over time if it works in both partners favor. This first step to test the waters in a relationship often starts with this type of referral partnership.
In addition, sales referral partners can be somewhat informal in nature if you do not plan to hold anyone accountable for the outcome. For example, it is commonplace for service professionals who network together to develop nonbinding relationships to help open doors and extend value by making credible introductions to other service providers or their respective clients.
However, if you do choose to enter into a binding agreement that includes compensation for referrals, you need to set rules just as you do for your own MLSs. Specifically, outline in your agreement how payments will be made and when the partner will be paid. For example, will you pay when the sale is made or when you when the merchant goes live?
Also, be sure you state in your referral agreements if the referral fee will be paid over the lifetime of the relationship or for only the first sale. And articulate whether the compensation will be a flat referral fee or a residual stream. Most ISO/processors have a referral agreement that they can share with MLSs.
Other types of referral partnerships exist. One example is a scenario in which your partners cross-sell your products and services to their base of customers in markets they have established. They don't need the level of training that your own MLSs receive, but they do need to know the basic capabilities and benefits of the product and services they are bringing to their market, as well as what type of company they are representing and referring merchants to.
This means ground-level training may be required to help them better secure their leads and close business. Provide adequate training on all the products and services you want them to present to their customers and subsequently refer to you.
When embarking upon this type of partnership, make sure you define each partner's role in the sales process as well as the process of setting up a merchant. The relationship can be a one-way lead pass or a two-way referral agreement. Both parties need to determine whether the best opportunity lies in passing on leads, receiving referrals or both.
The key to a successful partnership of any kind is in the follow through. It is critical that you track all your sales referrals, whether you enter into a formal agreement or simply accept leads via email from a trusted business partner in your network. The ability to track the leads and success of the referrals is what will allow the relationship to grow and eventually pan out financially for both parties.
This also will allow you to measure all your partner's referrals to see what you are gaining from the arrangement. It will provide you with valuable information on how to manage each relationship for maximum profitability.
Here are some examples of referral partners you're likely to find in your community:
Before you invest your time, money and resources in marketing and pushing your sales message out into the world, look for referral partners in your community. This is a great way to network outside of attending conferences and networking events.
Bernard Kelvin Clive, an authority on personal branding and digital publishing, said, "A referred brand is a preferred brand; and a preferred brand is a referred brand." We all want to do business with people we know. Referrals strengthen the legitimacy of your product and services and, ideally, give you the opportunity to grow long-lasting relationships. All of this results in new customers and business you would not have had otherwise.
Dee Karawadra is president and CEO of Impacy PaySystem, and Emily Karawadra is the company's chief financial officer. Since 2001, Impact PaySystem has been a leading provider of payment processing technologies and services to merchants throughout the United States. Through alliances with payments industry leaders such as Chase Paymentech, First Data, Buypass, Sage and more, Impact PaySystem offers tailored solutions to meet the unique needs of each merchant. Dee and Emily will welcome your questions and comments at email@example.com and firstname.lastname@example.org, respectively.
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