We just completed our new video that explains business networking – an undeniably effective method of small business marketing.
We made the video to articulate an inherent problem for business networks – the management of referrals and business opportunities – but that’s not the only thing that they collaboratively trade. Business networks also exchange ideas and information, and those are in most cases the elements that act as kind of the initial building block of many referral relationships and business partnerships.
Establishing or joining a network of other professionals to exchange referrals with is one of the quickest and most inexpensive ways to get a business off the ground. When compared to other approaches to starting the sales engine – business networking is a low cost and high yield method to gaining customers and typically generates a higher and faster return than other small business marketing efforts. Some people join business networking groups like BNI, or BRX. Others prefer more casual environments and many people just simply either have or develop their own personal business networks of partners where everyone collectively builds their businesses and mutually benefits. Whatever way you choose to do this – it’s a great idea.
Business Networking and building reciprocal referral relationships with others is hands down one of the fastest and most inexpensive ways to build your business. Fewer than 10% of people do it right. I wanted to share some tips on building a business network that is reciprocal and mutually beneficial, but also maintaining that network, and growing it successfully. I’ve broken it down into 6 steps.
Seek complimentary service providers to your industry – but don’t assume.
Ensure a like mindedness.
Set out expectations and discuss goals.
Monitor and track the business you exchange.
Measure the results.
1. The easiest way to start off building your own personal referral network is to seek complimentary service providers to your industry.. As an example – if you work in web design, it might be prudent to try to meet someone who works in printing, graphic design, public relations, or advertising. If you work in real estate, maybe meeting a mortgage specialist, a home inspector, or a general contractor might be a good idea. A complimentary businesses to business network is more likely to mutually refer – however, assuming that just because you work in the same realm referrals will be flying between you is naive. The act of referring and exchanging leads is an attitude, and it isn’t guaranteed just because the business networking potential between two people is so high. There are just as many successful business networks made up of professionals in unrelated industries as there are in related ones.
2. Make sure you’re on the same page! Ensuring a like mindedness includes meeting someone who genuinely wants to be in a referral relationship as much as you do and is prepared to invest their time and energy into building it in the same way you are. Ask questions about your potential network partner’s business and their experience with previous referral relationships they may have been in. Try to get a gauge of their level of seriousness with business exchange. Determine if you have the same approach to looking for opportunities for your referral partners. Sensing whether someone’s interest is fleeting and short term is easy. You want people looking to establish long term relationships. Talking and doing is two separate things. More often than not, people will talk. Try to deal with business networking doers.
3. Put it all out on the table, speak frankly, and discuss your mutual expectations and goals. Do you have a sales target for your fiscal year that you want your referral relationship to help you hit? Articulate it. Do you expect a certain number of referrals? Let it be known. Are you looking for a certain kind of client? Say so.
4. I had the opportunity to speak with a Michael Hughes from Networking For Results recently, and something he said really resonated with me. Following through on the referrals and leads exchanged in a referral relationship is critically important. This is what builds trust. Many people put so much time into building these relationships that they let the actual business get away from them when they’re finally getting the referrals. You’re failing the big picture if you’ve successfully achieved steps 1-3, but then blow even one referral opportunity. This is the reason we created Hello Referrals – to track and measure the results of business networking. Never put yourself in a situation where you’ve forgotten to call a referral, let it drop off, or managed it poorly.
5. Measuring the results of the business you exchange with your referral partners is important. How many of the leads are you closing? What’s your batting average? What’s the typical transaction value if it’s successful from certain partners? Are your partners qualifying the referrals properly? Analyze and tweak how you can mutually be enhancing your relationships.
6. Make sure you’re doing everything you said you’d do, and that your attitude towards your network is consistent and in line with a genuinely reciprocal approach. If you’re not doing what you expect, change the behavior fast.
What Are The Benefits Of Tracking The Referrals I Send and Receive?
We’re sticklers for organization and measuring results. When we created Hello Referrals, we were focused on a few simple core things that we wanted to achieve. Create an easy to use tool to track, send, receive, and measure the results of word of mouth marketing and networking. We didn’t want to overwhelm users with data that they didn’t need. We didn’t want to make the system bloated with information that was unimportant or irrelevant to a single customer’s ability to win more business, know where it came from, and encourage more of it. We wanted people to use it and consider it a helpful and valuable utility. In it’s infancy as an idea (over a beer two years ago on a summer patio), we felt that the cornerstone of it’s usefulness would lie on it’s ability to track leads and referrals simply and quickly. That night, we discussed why someone would want to track leads and referrals in the first place.
“The referral process is about committing to a series of actions designed to create a result, both for you and for the other people involved, and then measuring it and improving the system. As long as you track your activities, it’s not that hard to measure the results.
When you do not track the referral process, the lag time between participating in networking activities, getting referrals, and ultimately closing the resulting business inevitably creates a significant challenge. Without tracking the system, you cannot pinpoint which of your networking activities have led to the referrals which end up resulting in new business for you.”
He explains the importance of tracking your sources of revenue and what arises as a result of the effort.
- Quantification removes all doubts. Either there is a result or there isn’t. It’s that simple.
- Numbers are a universal language that can be easily shared among team members.
- You become aware of patterns that can (and should be) studied further.
- Key influencers and supporters are identified and more readily appreciated, and therefore stay on your radar.
- This historical data will help you plan for next year; and that is a process you should be commencing right now
We felt that there was a need there. Tracking your referrals, leads, and networking activity equates to increased business, more closed opportunities, and more time for you to do what counts – networking. It’s helpful to know that the printer in your network sent you $15,000 of business this past quarter. It’s helpful to know that 50% of the referrals you receive you close. It’s valuable to know that you sent your friend – the commercial insurance broker – 6 new pieces of business last month based on your recommendation. It’s helpful to have a tool that reminds you to stay on top of opportunities and leads you send and receive. It’s helpful to have those leads and referrals housed in a simple to access and reference database that ensures they’re accounted for and managed properly. It’s important to track your referrals until they either pan out or don’t. Referrals and leads generated from your networking efforts are precious opportunities. Giving them the attention they deserve is essential, and tracking your word of mouth marketing activity is a key way to generating more referrals for your business.