As business owners, we are told to build referral networks. Why is this important? Effective referral networks produce new sales revenue that, most likely, you would not have gotten on your own. When you are “referred in,” the sales cycle is shorter, and you close more sales with less Follow-Up Fatigue (FUF).
What’s In it For Me?
What is a referral network? It is a group of individuals that “cross-refer.” The individuals can be customers, allied businesses, vendors, friends, and former employees. New, untapped revenue is the result of an effective referral network.
Bobby Smith produced $100K in new revenue from 3 referral networks in each of the past 2 years. He no longer runs to 10 networking meetings each week and has more time to meet with his most important prospects and clients. What made Bobby’s 3 referral networks so effective?
Essential Ingredients
Building a referral network takes time to happen. Often, referrers evolve based on who you know. Building strategic relationships proactively will speed up the process once your due diligence identifies the right people. Who are the right people?
“Will I refer to the other person?” is the first question to answer as part of your due diligence. Cross referrals is a 2-way street so your referral network will be a tight-knit group that has your values. You must be just as willing to refer to them as they are to you, or the group will fail. Trust among the group is essential.
Allied Businesses
What are other industries that sell into your target markets? Who do you know in those industries? To whom can you refer them? All 3 questions are key but the last one is most critical since referrals need to be 2 way for the network to thrive.
Identify a group of allied businesses that have your essential ingredients. Start small and build a group of allied professionals by making introductions of your trusted allied professionals to each other. Some example groups of allied businesses are:
- Construction industry trades – Focused geographically on residential customers
- Estate planning attorney – CPA, Insurance agency, financial advisor, senior living advisor
- Suppliers to property managers – Security, janitorial, landscaping, office supplies, legal, accounting
In each case, the group is selling to the same industry.
3 Ways to Promote Cross Referrals
Cross referrals define your referral network. Here are 3 ways to promote cross-referrals:
- Spend social time with your referral sources
- Co-sponsor webinars
- Invite referral sources to networking groups and industry events
Social time is most important and saying thank you when you receive a referral is standard. Multiple “Thank You” gestures are appropriate.
Promote and Track Your Networks with Your CRM
Bobby uses his CRM to:
- Identify contacts who are referral source candidates
- Report who made referrals to him and to whom he made referrals, tracking the value and results.
- Create email templates to send to the person being referred and the person to whom the referral is made.
- Segment each group for specialized communications.
Your CRM can help you maintain close relationships by using personalized, automated communications.
Next Steps
Imagine if 25% of your business came from referral sources. What can you do today to make that happen in the future? Start with your CRM to see who are the right referrers for you.
How can you use your CRM to build your referral relationships and close more sales with less FUF? Perhaps, you do not have a CRM. Either way, let’s meet to see whether a CRM is right for you
