Building a referral network with other businesses sure seems like a cherry proposition doesn’t it? It is true, a solid referral network can yield dividends that exceed even your wildest expectations, but building that solid referral network isn’t as simple as just willing it into existence. It’s going to require a lot of work and due diligence, and somewhere along the line to building it, you might make a few mistakes. Because of the interrelatedness of a referral network, though, those mistakes can quickly become magnified, and can, if left untreated, have dire consequences for your business.
For this reason, we’ve decided to highlight some of the most common referral network mistakes that people can make. And, we’ve gone ahead and offered some suggestion for how you and your business can avoid them. Hopefully, if you keep these things in mind, you’ll be able to successfully avoid getting yourself into too much trouble as your grow your referral network outward.
Mistake #1: Not Trying In the First Place
We know we scared you off with the idea of mistakes, but the biggest one you can make is not trying to build a referral network in the first place. The reason is simple. A referral network might just be the most powerful marketing tool that you have in your tool chest. With it, you’ll be able to generate new customers and clients who are already predisposed to approve of your services and offerings. Moreover, by referring your customers to other businesses, you’ll be stoking the level of trust they place in your brand. All of this, as you might imagine, leads to more sales and greater profits.
So, take the plunge. Try to identify other businesses and clients with whom you can form a symbiotic referral partnership. As they say, nothing ventured, nothing gained. You might be surprised to find how easy it is to identify other businesses that can help you – and that you can help as well.
Mistake #2: Poor Timing
Like any other kind of business proposition, you’ve got to lay the groundwork first. Too many times, businesses simply go about trying to build referral partnerships and referral networks as if they’re cold calling for sales. Don’t do this. It’s a surefire way to turn off other businesses and clients to your products and services.
Instead, you’ll want to focus on building your reputation around the business community. Rather than simply approaching another business about entering into a referral partnership, why not send some free clients their way? When that business discovers that you’ve been sending your customers to them for certain products and services, that’s something they’re bound to remember. So, when you finally do get on the horn to call the business owner and attempt to formalize a relationship, it will be one that’s built upon an already established background, one which underscores the potential benefits of entering into a referral partnership with you.
Mistake #3: Not Being Unique
In order for other businesses and clients to refer customers and clients to you with confidence, you’ve got to provide a product or service that is unlike anything else in the marketplace. You need your referral partners to be able to say with confidence that what you’re offering is what their existing customers and clients need.
So don’t simply skate by and think that having other businesses pass their customers on to you is a recipe for success. Remember that a referral partnership is a two-way street. In the same way that you want to refer your customers to other quality businesses, your referral partners want to do the same. So, ensure that your business is offering best-in-class service or products for the sector that you work in.
Mistake #4: Not Defining the Clients and Customers You Need
If you’ve successfully managed to develop a referral partnership or two, this can be the one thing that derails the entire enterprise. Too often, businesses will adopt the “more is better” mentality. With a referral network, this isn’t the case. The real benefit of having customers referred to you is that they are already prequalified. They already want what you’re selling, and their satisfaction with what you sell them is almost guaranteed provided you’re delivering them the quality your referral partner has told them to expect.
So, when you’re seeking out referral partnerships, make sure that you and the other business establish a clear picture of your mutual target customers. What do they want? What do they expect? What are you capable of providing them? There’s no greater mistake you can make in this kind of relationship than failing to meet the expectations of your referred customers and clients. This will reflect poorly on you, and it will reflect poorly on your referral partner. Instead, both partners should have a clear picture of the kinds of customers each business is looking for, and they should only refer those types of customers.