The Courtship of Referral Sources

| August 18, 2015

Business TeamEvery business needs a new flow of work, and so every business needs some form of marketing.  But when you market – what are you marketing for?

The obvious answer is “We market to get customers or clients.”  But the obvious answer is wrong – the most effective marketing is not looking for customers or clients.  The most effective marketing is looking for referral sources.  If you go to a networking event and come back with a solid lead, you have hit a single.  Come back with a new client, and you have hit a home run.  Use that networking event to develop a referral source, and you have hit a home run with men on base.

Referral sources are important to any business, and are the lifeblood of a professional business.  A recent Nielson study found that 92% of customers trust referrals above all other forms of marketing. An “A” referral source will send you at least one quality referral a year; and a “B” source at least one every couple of years – which means that you needs about 20 referral sources to maintain a healthy referral marketing program.

So then, how to develop a good referral source?  In a word, you court them.  You turn a meeting into a connection.  The same way that you courted (or are courting) your spouse, you build a relationship based on shared values, opportunities, interests, and benefits.   And don’t expect it to happen overnight.

This is exact opposite of the “scorched-earth” practices that many seem to think passes for networking.  The scorched-earth networker goes looking for business like a hunter looks to bag game.  He goes from networking group to networking group, looking for potential sales, without taking the time to build relationships.

But if you look at networking as the start of a courtship, the pieces start to fall into place.  People are people.  Few of us like to be sold to, none of us like to be stalked, but all of us like to be courted.  In the words of Solomon: A man who has friends must show himself friendly. (Proverbs 18: 24).

This applies not only to new referral sources, but all the more to your existing referral base.  They need to know that you are remembering them, and that you appreciate them.  Nothing conveys that like personal attention.

This needs to be worked into your schedule intentionally.  You should consciously create a list of your Top 20 Referral Sources, and (as a general rule) be in touch with someone on that list at least three times a week in one way or another.

And like any good courtship, gifts are appreciated – and no gift is better than giving referrals of your own to those on your list.

If you are looking for new referral sources, take the time for the relationship to build.  Start with genuine interest in the other person and his or her business. Use a first meeting not to pitch your business, but to establish contact.  Find out what they do, ask for a business card or telephone number and the opportunity to call to set up a lunch.

Second, try to learn something about the potential referral source before you meeting.  Have a plan of what you intend to talk about.  Look for areas of shared interest which will allow you to build a relationship that will be the foundation for referrals.

Third, follow up.  Don’t stalk, but ask for the opportunity to move a potential business relationship forward.  Ask for permission to add him or her to your newsletter or provide additional information.

Fourth, be prepared for rejection.  Not every potential will lead to new business, and nor do you want it to.  What you are looking for is a partnership – a long term mutually beneficial partnership of business interests that both sides can rely on.  Most “first dates” will not go anywhere.

But remembering “relationship first” will over time build a referral network that will provide a ready, pre-qualified source of business.

 


Category: Marketing