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Incorporating a referral marketing system into your business’ marketing plans will guarantee you an increase in business. It will do this at a significantly lower cost than traditional marketing, and the client you receive as a referral has a higher likelihood of staying with you quite a long time as a long term customer.

Sounds great? It is, but… the establishment of a referral system that works for you, and isn’t a highly managed and time consuming version of Outlook or Google calendar is a difficult task for most business owners. Most don’t know where to begin or the essentials of what they need to really turn up the gas on receiving and effectively managing their referrals as well as the network of partners who will give them. Here’s an interesting stat – did you know that nearly 75% of the referrals naturally given out never get a response or the business owner is not even aware that they have been given? What we define as naturally given out is the casual referral or the verbal referral. The “I-know-a-guy referral”. These happen casually, usually through the every day operation of your business and dealing with people – regular dialogue associated with what is a good customer experience that you are creating. There is an enormous amount of potential with these, and if a business owner could more effectively wrangle these gems of opportunity out of the air, life would be good.

Investing in your referral network has other positives. Referrals spend more money. Research has proven this is likely because people tend to refer leads and opportunities that are highly qualified, prepared to buy, and who trust the person referring.

This is the reason we created Hello Referrals. It’s a web-based application designed to help you to organize and manage your referral base to grow your business. How? It helps you to do the things that make being part of a referral network so successful. It facilitates regular communication with your partners, effectively manages the referred leads you receive and the referrals you send to others in your network, provides tracking and reporting tools, and gives you a place to organize your trusted partners in business — the ones you love to refer. All of this in a easy-to-use web-based application that doesn’t require any software be installed. It’s refreshingly uncomplicated.

So you’ve decided to commit to a referral marketing strategy for your small or medium sized business. You’re going to receive those highly qualified referrals and you’re going to give them in return. You’re ready to give, and you’re ready to receive with like minded professionals. Great. Now you have to establish that base. You can join a group like BNI, or you can go the custom route, and create your own referral marketing base. The tricky thing, is how do you do that? Do you scour the yellow pages and see if you can get some meetings with organizations or people who you think there might be a mutual beneficial relationship with? Also, how do you know which kinds of businesses are better suited inside of your sphere? We’re going to give you some tips to establishing a solid network….

Focus on businesses or people who compliment your business well. Don’t hook up with someone or an organization that doesn’t do anything remotely similar. You can expect little to no referral action between you. As an example, if you’re a web development company, consider a printer as a good referral partner. You both work in marketing and communications. How about a promotional items company? Maybe a company that specializes in direct mail? Maybe a freelance graphic designer? How about a public relations professional, or a social media consultant? Your best bet is securing people in your network that work inside of the same space. If you’re a real estate agent, getting a meeting or working your regular social network for a mortgage broker, a housing inspector, or an insurance company might be a good idea. Hopefully this illustrates the point well.

How do you seek these professionals?

Determine who you’d think might be a good match, and then seek them out if you can’t get immediate access to someone you know, or someone who knows someone who might be a good fit. Work your regular social network.  I looked at all of my connections, and sought the candidates I wanted to secure through my existing connections within my city. If I didn’t know them directly, I’d check out my connections’ profiles to see if there was anyone in their list that I could get an indirect introduction with. I picked up 3 candidates I was seeking this way, and when I introduced myself to them, we had the person we knew in common, which created a warm initial contact. Another good way to get this started off is of course looking at your existing client base.