Are You Referral Ready?

Archive for the ‘Connecting with Your Referral Sources’ Category

Your referral sources are a marketing team that may or may not be doing business with each other. If they are, you are building a virtual company of connected resources to drive consistent referral business to each other. Together, your ability to recruit new team members should benefit everyone as the links to related product and services are added to the chain.

Any time you refer related business to someone who is not officially on the team, you are missing an important piece of the puzzle. Their products and services might allow you to serve your clients better, but you do not gain the benefit of sharing networks and resources like you would if a more formal arrangement were in place. Even if his or her ability to refer to you is minimal, someone else on the team could benefit.

List your referral sources and analyze what other types of businesses would be great additions based either on their ability to refer or be referred to other members of the team. Discuss the options with your current referral sources and be very selective about who you invite to an informal meeting. Explain to them how you like to do business by referral, and evaluate how they might be able to contribute to the team. Pay special attention to non-competitive businesses that tend to be serving the same types of clients that you do.

Teamwork has been said to divide the effort while multiplying the rewards. When you introduce a new team member, you also introduce that team member’s set of contacts and the clients they servce. If they serve the same kind of clients as you, you have captured a whole new audience while also expanding the extent to which you can serve your own.

Communicating with your referral sources doesn’t always have to be about referrals. They can serve as true business partners if you ask for their feedback about your products or services, and that feedback can drive any improvements or subsequent promotional programs. A relationship fueled by trust can serve both parties in ways that have nothing to do with referrals.

Referral sources enjoy being insiders to your business and feeling like they can be trusted with privileged information. When you involve them in the strategic decision making process of your business, that trust is increased. During those times when you can’t feed the relationship with referrals, you can strive to feed it with the stuff that referrals made of–trust and shared experience.

Design a brief customer survey and include among its distribution 3-5 of your best referral sources. Schedule time to sit down with each one and review their responses, positive or negative. Use the negative responses to improve the product or service, and use the positive responses as part of a print or web-based marketing campaign. Let the referral source know how the information was used and thank them for their participation.

 When you solicit feedback from your referral sources, several positive things happen. Trusted voices are heard, business partnerships are strengthened, product or service delivery is improved, marketing efforts gain authentic support, and problems are identified and solved before they even start. What looks like a situation that benefits only you really boosts the credibility of your referral sources as well.

Everyday the business landscape is shaped by mergers and acquisitions. When a company acquires another company, one of the most valuable assets is the immediate acquisition of new customers. You can create this same dynamic with your referral sources by sharing people in your network who could be of service to them in the future.

 Part of your value as a businessperson is your social capital–who you know and what those people say or do to promote you, your business, your brand, or your reputation. Referral sources thrive on the exchange of that value. When they lose touch with that value, they begin to question the trust and credibility that your relationship was built on.

 Plan a one-on-one meeting with a referral source you hold in particularly high esteem. Ask the referral source to bring along the names of the five most influential people in their network, and agree to do the same. As you review the names, brainstorm how you each might benefit from a personal introduction and the best way to facilitate that introduction.

 What you can do singularly to support a referral source pales in comparison to what you and your network together can accomplish. When you position yourself as a connected business professional, people seek you out as someone who consistently brings value to relationships and leverages social capital to the benefit of those you encounter.

Your referral sources appreciate opportunities to introduce their products and services to new prospects. These situations don’t present themselves every day, but you can always create them. This proactive approach will demonstrate your commitment to helping them reach an audience they might not have otherwise.

Saying you will work hard to help your referral sources is one thing. Referring them business from time to time is another, and perhaps even enough. But when you showcase their products and services, your referral sources actively participate in the endorsement process and co-create another dimension to the business partnership.

Choose one referral source whose products or services you thoroughly stand behind. Sponsor an event that features this business, like an after-hours social event or product seminar. Coordinate all the arrangements to drive prospective clients and targeted business professionals to the event. Help them display their products and services in a fun and engaging way.

Helping your referral sources succeed is a smart investment strategy, not a passive cliche. A showcase event is an undeniable demonstration of support consistent with the philosophy that ‘actions speak louder than words.’ As the sponsor of the event, you connect with your referral sources in a way that extends and solidifies the value of your business relationship.

Getting to know your referral sources extends beyond the normal business relationship. If you know they are involved in outside projects that could benefit from your support, offer your help in a way that allows them to achieve their goal and brings value to the relationship.

Nurturing the emotional connection to your referral sources takes time and effort, but without that effort your ability to feed the relationship is limited to the external forces of an unpredictable business cycle. If you don’t know enough about your referral sources to break through those artificial barriers, you lose an opportunity to strengthen the relationship that in turn supports your business.

Would you volunteer to help support a project one of your referral sources was most committed to? If so, clearly define what role and to what degree your assistance might create the most value to the referral source. Building relationships is about finding ways to bond on a human level. For this, there are simply no shortcuts.

Regardless of whether an outside project is related to your expertise, you build credibility and goodwill with the referral source. At the very least, you demonstrate your ability to follow through on your commitments, which extends to the business relationship as well.

One specific area of training you could provide your referral sources has to do with making mutual introductions. Armed with this information, both you and your referral sources make a commitment to opening doors for each other based on the words that work best for your business.

Even the best referral sources need motivation and continuing education about prospecting for your business. Even the most loyal referral sources have the right to expect that you might be working just as hard on their behalf. Without a mechanism for accomplishing both, the marketing potential of your referral sources is operating at 50% capacity.

An introduction seems like the most basic act, but do you really want to leave that to chance? Do you even know how your referral sources prefer to be introduced? Give them the tools they need to help make you more successful in exchange for tools that will allow you to refer them more business…which is always the best way to feed a referral relationship. When it is done this way, you demonstrate your ability to bring value to the relationship instead of just getting value from it.

Along with cash, benefits, and recognition, sales people respond to what kind of training is available when they evaluate opportunities. Think about your company, your referral sources, and what you have invested in them to help them become proficient at sending you business. As a result of the training you provide your referral sources, how motivated are they to continue bringing you quality referrals?

Untrained referral sources can still be effective, but always to a lesser degree than if you take the time to show them how to refer, whom to refer, and an easy or fun way to do it. Like any top salesperson, referral sources appreciate knowing what will make them more successful.

When you take the time to give your top salespeople more of what they need to be successful, you are investing in the relationships that drive your profitability. Your training strategy will pay off when you start acquiring even more of the kind of clients you want while lowering your marketing costs along the way.

Top sales people value recognition. It validates their effort and contributes to their overall sense of accomplishment. Based solely on the recognition you give to your referral sources or top referring customers, how motivated are they to refer you more business?

The moment you start taking a referral relationship for granted is the precise moment it starts to fade away. The “give first” cycle resets when you gain, and offering your best referral sources a little well-deserved recognition keeps the mechanism of reciprocity in proper working order. If your withdrawals on social capital continue to outnumber your deposits, a deficit situation throws the dynamics off balance.

Evaluate what you have done to recognize your top referral sources for their efforts. Did you publicly thank someone who has gone out of his or her way to help you? In the last 60 days, did you send a thank-you gift or card to a referral source who brought you unexpected revenue? Did you introduce the referral source to someone and endorse him or her in exceptionally glowing terms? Did you provide a written testimonial they could use for marketing purposes? Did you promote their business in a newsletter article or advertisement? Try to come up with two ways you can recognize the efforts of your referral sources.

They know you, they like you, they trust you, and they know how to refer business to you. Your referral sources have a lot going for them, and they might also have their own businesses to tend to. What they don’t always have is the motivation to keep seeking referral opportunities for you. Since they probably expect very little in return, a little recognition can serve the referral source and the relationship at the same time.

Surely there is something beneficial about being in relationship with you that goes beyond a financial or business transaction. Your referral sources place value in those benefits. They accumulate over time and contribute to the depth and overall health of the relationship. As a result of the benefits you offer your referral sources, how motivated are they to refer you more business?

Reduced to transactional terms, a referral relationship can still serve both parties. But the human factor is what makes me choose you over another referral partner, and you can figure every one of your referral sources has the option to feed another business besides yours. It is their relationship with YOU that makes the difference. Strengthen the relationship and the rest happens naturally.

How you can show your referral sources–the people who are already inclined to refer business to you–the benefits of being in relationship with you? Could you introduce people in their company to influential people in your network? Could you help them secure a new vendor? Could you help them close a deal based on your recommendation or testimonial? Could you attend a trade show or function they were hosting? Try to come up with things you can do for each referral source that adds value to the relationship itself.

Sales people are attracted to compensation systems that offer both cash and benefits. Your referral sources are your sales people. They value their relationship with you, and the benefits of that extend beyond the last referral or the next referral. Perhaps in between is your best opportunity to demonstrate to your referral sources the real benefits of working so diligently on your behalf.

Unlike perhaps a career sales professional, your best referral sources are probably motivated enough to sell your products and services on essentially a volunteer basis. Why? Because by servicing the people they refer, you make your referral partners look good in the process.

Whether a commission is earned or not is irrelevant. You have a sales force to manage. Don’t let mutual admiration get in the way of a smart compensation package. Just because your referral sources are volunteers, don’t think for a second they don’t appreciate being compensated. Maybe, just maybe, they’d appreciate referrals from you as well.

Have you “paid” your referral partners lately? Are referrals flowing only one way? Based on how you “compensate” your referral partners, how motivated are they to bring you more referrals?

Unless you can feed the relationship with your referral partners, it is not likely to support you or your business over the long term. There are many ways to feed a relationship, but reciprocating with good referrals models the behavior you are trying to encourage and creates a cycle of goodwill.

Think for a moment specifically about the three people you consider your strongest and most valuable referral sources. Ask yourself these questions:

• Have you “paid” them in the last 30-60 days? If not, how realistic is it to believe they are working hard for you?

• Do you pay extra to those who generate the best results? If not, what motivates them to continue performing at such a high level?

As the manager of a volunteer sales force, evaluate your own compensation system. Like any sales manager, your challenge is to build and motivate your team. The goal is never to accumulate as many referral sources as possible. The goal is to maximize the number of referral sources that you can feed, support, and manage. This takes effort on your part.

Feeding your referral sources is an investment strategy. Invest wisely, and you’ll find that the best fuel for reciprocity is a commitment to relationships that benefit all parties.