There are, of course, all the normal methods you can employ to grow your business and expand your client base. You can advertise, market, cold call, and do any of a number of things to get your brand out in front of customers. But, there’s one kind of marketing that can often be overlooked by business, and that’s building a referral network.
What Is a Referral Network?
If you’re not already familiar, then let us break it down for you. A referral network is a collection of businesses that pass around clients to one another. Say, for example, you’re a business that sells ice cream. Now, your customers may love ice cream, but maybe they want some delicious waffle cones to go along with it. Well, it just so happens that Joe Cone down the street makes some of the tastiest waffle cones around. Naturally, you might be inclined to direct your customers in his direction. They go see Joe Cone and get their waffle cones, and your customers are happy. But, does Joe Cone know where these new customers came from?
That’s why, before you start sending people down the street, you need to go pay Joe Cone a visit yourself. Between the two of you, you both make a pretty delicious ice cream come, and maybe you can help each other grow your respective businesses by helping each other. When customers show up at Joe Cone’s shop, he can tell them to come see you for ice cream to fill their cones up with. When customers come into your shop, you can tell them to go see Joe Cone for a delicious waffle cone to put their ice cream in.
What Are the Benefits of a Referral Network?
Naturally, it’s a win-win for you both! As you can see from the example above, this referral network between yourself and Joe Cone helps you both to generate customers that you might otherwise not have had. More than that, though, it has an effect on the customers that both of you share.
As everyone knows, ice cream is better with a cone, and a cone is better with ice cream. By referring your customers to someone else for their cones, you’re helping them to improve the quality of the product that they’ve purchased from you. Because of this, you’re increasing your customer’s level of satisfaction with your business. Even more, you’re also instilling trust for your brand and service in your customers. They know that when they come to see you for their ice cream, that they’re getting a level of service that they won’t find elsewhere. And the same goes for Joe Cone, too.
This last point may be the best part about using a referral network. Obviously, real business is more complicated than ice cream and waffle cones. But the metaphor holds! Any business must naturally narrow the scope of its offerings in order to maintain the quality of its service and products. While you may strive to be all-inclusive in your offerings, there will always be places where someone else might better serve your customers. Rather than looking at this as a potential weakness, look at it as a potential strength – it presents an opportunity for you to generate more qualified leads, while also increasing the level of satisfaction your customers have with your company. Additionally, setting up referral partnerships with other businesses also increases your profile within the business community, which can have long-lasting and beneficial effects that go well beyond customers and profit margins.
How Can I Get Started With a Referral Network?
Here you’ll need to engage in a little bit of corporate introspection. You may wish to speak with your customers in order to find out what kinds of products and services they’re using in order to supplement those that you provide them with. Once you have a clearer idea of what those products and services might be, become a consumer yourself and see what’s out there. Because you’re already in the industry, you’ll have a much better smell test for a quality business than your customers do.
And that, as a final word, is perhaps the most important part of building your referral network. You’ll want to ensure that the businesses with which you agree to transact clients are likeminded and offer the same level of quality that your business does. In some way or another, every member of a referral network reflects upon the other members of the network. Although still separate businesses, your customers will begin to view your brands as interrelated. For this reason, choose to set up referral partnerships only with businesses you’d use yourself and that you’d feel comfortable having your customers use. If you follow that dictum, you should be well on your way to building a powerful referral network that can have a lasting and positive impact on your business and bottom line.