Many small businesses (mine included!) rely heavily on referral’s to gain new business opportunities and ultimately grow their business profitability. But are we maximising the power of our referral networks?
Most people are happy to speak positively about, and refer to individuals we know, trust and are confident that will look after the opportunities we refer to them.
Individuals that are reliant on referrals often have “informal” networks, and find these quite successful, where others commit a little more energy and are part of formal networking groups.
There is no right or wrong approach as to whether you have formal or informal networks but the one clear goal is to have a “network” of people looking out for business opportunities that you can assist with, and connecting you with those opportunities.
Regardless of why we receive referrals for business opportunities we should treat each referral as a privilege and ensure we continue nurturing our referral network by considering the following:
Do you treat the customer referred through to you as well as your best existing customer? – There is no more embarrassing moment in business than referring through a colleague, friend or family member to a business, only to find out they were poorly treated. If the referral you receive is not your ideal customer it is still not a reason for poor service or response times. Certainly educate the referral source at an appropriate time of a better referral opportunity but don’t shoot the golden goose!
Do you first try to help your referral network by sending business their way? BNI (Business Network International) have the catch cry of “Givers gain”. Basically the philosophy is if I refer business through to by referral network, they will want to refer business to me. A sound assumption in my view as we all like to support those people who support us.
Do you look to add value to clients referred through to you, or purely focus on the dollars? We are all in business to make money and support our families, but a referral opportunity is a chance to not only gain business but gain another advocate. I have people referred through to me that quite often are in need of advice, and the best advice I can provide at times is to direct them to someone else that will help them more efficiently. At times when I do this I wonder whether I am cut out to be running a business, but what I have found is that these people become bigger advocates and in turn refer more business to me because I helped them and have built their trust.
I am lucky to be involved in a great local networking group (a BNI Chapter) and through developing good relationships and trust with local businesses have seen that a business network can be much more than just a referral group. Three key aspects to consider are:
- Many businesses have better results if they can be involved early in the planning phase of their client’s new ventures. By letting your clients and broader network know that you have a broad group of businesses you network with and trust you may find that you are the first person contacted when they have a need for a particular trade or business. What better way to stay up to date with what your clients are doing?
- Do you understand what members of your business network actually do? By taking the time to understand their business and what they do – you may just find you can send more business their way. You can then test the philosophy of “Givers Gain”!
- Some members of your business network may find it difficult to find referral opportunities for you, and often that is quite understandable. But have you ever sat down with them to understand their broader networks and acquaintances? Chances are they may be able to introduce you through to someone that you would like to meet and build a business relationship with. Your next key referral source might just be a neighbour, friend, family member etc of one of your business network members!
There is a saying that “you can never have enough friends” and I think the same goes in business. The power of a business network can be very valuable if you are prepared to invest the time.
PS – By the way, if you are looking for a particular tradesman or business professional, chances are I know a guy / girl!