Building a Referral Network: The Bare Necessities

So, you’re sold on the idea of building referral partnerships and a referral network with other businesses, but you don’t know where to start? Well, you’ve come to the right place, because we’re going to give you the down and dirty information you need to get started with a referral network.
Identify the Kinds of Businesses You Should be Working With
Part of building a referral network is in understanding your own business and where its blind spots are. There are always going to be places where customers will need to seek out supplemental products and services for those that you provide. In seeking businesses to enter into referral partnerships with, you want to find businesses that offer these supplemental products and services. In order to find them, you can do the research yourself, or you can ask your customers to tell you where they’re taking their business. Naturally, though, you will not want to enter into a partnership with a business that offers products or services that are similar to yours (in addition to those that are supplemental), as this would be counterproductive.
Make Sure That Those Businesses Are Qualified
When you enter into a referral partnership and begin to form a referral network, it’s important to understand that, while your businesses remain separate, they do become interrelated in the eyes of your customers and clients. For this reason, you’ll want to appropriately vet any business that you enter into a referral partnership with. Because you’re already a part of the industry, this shouldn’t be too hard. You’ll know which businesses offer quality products and services and which don’t. For this reason, avoid entering into arrangements with businesses that you feel offer shoddy work or are less than reputable. While the short-term gain of garnering new customers, regardless of where they’re coming from, can be enticing, the damage a bad partner can do to your brand image can be catastrophic.
Come to a Mutual Understanding with One Another
So, you’ve agreed in principle to begin a referral partnership, but what does this partnership entail? Contrary to what you might think, it’s a lot more complicated than just sending every Dick and Jane that walks through your door in the direction of your referral partner.
Instead, you should come to think of the act of referring as an additional service that you’re providing your customer. In the same way that you want to give your customers the very best products and services that you provide as a business, you’ll also want to provide them with the best referrals. But how can you accomplish this?
That primarily comes down to establishing a clear picture of the kinds of customers and clients that each business is looking for. It’s important that each partner in the relationship have a clear understanding of what each business is to provide (and capable of providing) and what customers those services and products are meant for. Still, while you’re coming to a clearer understanding of this, be sure to bring an open mind to the table. Listen to your referral partner. It’s possible that they serve a certain segment of customers that you’d never thought to market toward. Perhaps you have just the thing that those customers are looking for? If so, then this referral partnership might be the ticket to radically expanding your customer base.
Monitor the Progress of Your Referral Partnership
If you’ve agreed in principle to the partnership, then you should also take the time to consider what you and your partner are hoping to gain from it. Periodically, you’ll want to get together in order to consider how you’re both performing against what you were expecting. If things aren’t lining up, then maybe it’s time to tweak or adjust your strategy. If things really aren’t going well, then maybe it’s time to cancel the arrangement? You’ll only be able to make this determination if you’re watching the numbers, so make sure that you’re making the effort to do so.
To that end, also remember that a referral partnership is a business relationship. As with any other business relationship you might have, you’ll want to make sure that you’re following up regularly with your partner. It’s important that both parties feel as if the other has their best interests in mind, and this level of trust can only be establish through regular contact and follow up.
Get Started With Your Referral Network Today
With these as a guideline, you should have the basic understanding you need to get started in building a referral network for your business. Remember, though, that Rome wasn’t built in a day. While all of this might sound easy on paper, it can be much different in practice. Take the time to work on it, and try not to be too pushy. You know how hard you work to grow your business, so remember that other businesses might not always have the time to talk about a referral partnership with you right away.

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