Building a referral network

in Small-business

I had a client ask me just last week, "how can I become more effective at cold calling?" My answer - "severely limit the amount you have to do."

Calling someone out of the blue that you don't know, who does not know you is - in my opinion - a tough way to go about building your business. Now understand I am not against cold calling, I just personally do not recommend it as a lead sales strategy. I mean why cold call when there are so many other more effective, less stressful and quite frankly more enjoyable ways to grow your business?

One of my personal favorites is building a referral network. When new business comes to you via referral you stand a much better chance of the sales cycle ending in a closed piece of business. Why? because trust and needs identification have already been established. That means someone else did half your work for you - you have to love that!

So how do you go about building a referral network and/or system? Here are the seven steps that I follow:

1. Do an exceptional job! If you want referrals you have to give your client's something to talk and brag about. If you follow Seth Godin, this is what is known as the "Purple Cow." Godin's explanation - if you're driving down the road and see a group of cows that would be no big deal and you barely even notice. But if you're driving down the road and you see a "Purple Cow" well now that is something, and you simply have to tell everyone you know. So understand the little things matter - people love to brag and tell great stories - so ask yourself what are the little extras I do that set me apart from my competition and are they having the intended impact on my clients? Do I give my clients something to talk about? Assessing how well you service your clients is rule 1 in asking for referrals.

2. Clearly, simply and effectively communicate who you are and what you do. People will refer to you if they understand who you are, what you do and what you are looking for. Most of our existing clients use one or two of our product and service offerings (we'll talk about effectively increasing production/profitability with your existing clients at another time!) simply because they are not aware of the range of services we offer and how those services benefit clients. The same goes for traditional referral sources - those peers and professionals who do complimentary work and would be perfect candidates to send us business. So work to define and explain very simply and clearly who you are, what you offer and who/how you can help.


3. Ask for referrals. I firmly believe people want to help you, but you have to ask for the help. Get in the habit of asking your clients for referrals. No - not an aggressive strategy. Simply let people know you are looking to grow your business and to please feel free to share your name and your contact information with anyone they feel you could help. This should be a regular part of your conversations. I work with a lot of doctors, and it never fails when we invoke this type of strategy how many times an existing patient says "I would be happy to recommend you - I just assumed you were not taking new patients." The same is true in most industry - if you want it you need to make sure you ask for it.

4.Focus on your top 20%. While I casually mention to all of my clients that I am looking to grow my business and that I welcome new clients and referrals. I focus my referral relationship building on my top 20%. These are the clients I have that are my "raving fans." They love the work I do, they believe in my products and services, and they above anyone else understand why working with me is so effective. They are not only enjoy sending me referrals; their referrals result in the types of clients with whom I most want to do business.

5. Seek out professionals and peers who offer complimentary services. One of the best ways to increase your referrals is to find other professionals who work with your target market. Call them on the phone - offer to take them to lunch or for coffee and have a sales conversation. Ask them all types of questions about their business, find out specifically what they do and what type of client's they are looking for. Then offer your short, simple and very clear explanation of your business. Then suggest if and when the opportunity arises to send each other referrals. Do not expect this to work with one visit. Just like a sales call this takes time and is based on comfort, trust and relationship. So identify four or five professionals and work consistently to build those relationships.

6. Send referrals. If you want to get referrals you should be the first to send referrals. This is just smart business, but in addition it is such a win/win strategy. Your referral source is thrilled and now feels obligated to find some business for you. Second, you have helped your client or potential client out by filling a need that they had. You come out the hero on both sides as you are adding value. (Tip - if you send someone a referral call and let them know you did. Just in case your referral does not mention taht you made the recommendation. Plus if gives you another opportunity to 'touch' your referral source and let them know you are working on their behalf)

7. Say thank you - Many sales experts suggest reward systems for sending referrals. And while I feel that is a personal choice and should be an individual strategy, the one thing I am dedicated to is the importance of saying (and writing a note to say) thank you. These are incredibly powerful, powerful words. And whether or not you close the business thanking that person for recommending is not only the right thing to do it will ensure you receive more referrals down the road.

While there are many more tips and ideas on how to develop, build and capitalize on a referral strategy, implementing these seven will go a long way in increasing your referrals, your reputation and most importantly your percentage of closed sales!

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Meridith Elliott Powell has 1 articles online

"High energy, high impact and highly motivating," that is Meridith Elliott Powell, founder and owner of MotionFirst. A certified strategist, coach, and business development expert, Meridith is known in the industry as a catalyst and someone who makes things happen! Work with Meridith to build your network and change your life!

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Building a referral network

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This article was published on 2010/12/08