The advice “don’t put all your eggs in one basket” is as helpful in personal branding marketing advice as it is in building a referral network. When it comes to a referral network, you want to have multiple referral sources.
Building a well-rounded referral network is an effective way to generate leads and grow your business. However, it does take time. You need to establish strong relationships for the best possible referrals. If you have the capacity to be involved in all of them, there is little limit to what you can accomplish.
Types of Referral Networks
There are many places you can turn to build a solid referral network. Here are a few examples of good referral sources:
Professional Referral Networks
These are networks composed of professionals in related fields who refer clients to one another. For example, a group of lawyers, doctors, or therapists may refer clients to each other based on their areas of specialization.
Customer Referral Networks
When you impress your customers, they may refer you to others in the peer group, friend group, family, or on social media. For example, a satisfied customer of a hair salon may respond to an inquiry on social media and refer their friends and family to the salon. These are direct customer referrals. They can also refer people to your business indirectly by writing reviews or providing testimonials. According to Forbes, referral marketing is one of the most valuable types of marketing.
Business-To-Business Referral Networks
Building a business-to-business referral network that is composed of business people who refer clients to one another is another component of a strong referral network. Sometimes these types of referral networks grow organically due to clients asking for services the business doesn’t provide like a web developer referring a client to a content writer, while other times referrals are a natural ask like when a hotel refers visitors to a local restaurant.
To grow a strong business-to-business referral network, think about complementary businesses you can approach or businesses that are in a position of trust with your target market.
A referral group is an organized entity designed around helping its members get referrals from other members. Most referral groups limit the number of professionals from each industry to one. That way all the leads from the group for that product or service go to one person.
Chamber of Commerce
One of the original networking groups in the business community is the chamber of commerce. Some chambers have formalized referral groups within their organization, while others may operate a visitors’ bureau that provides referrals for travelers. But all chambers can connect business professionals with one another and have an extraordinary view of the business landscape, making them an excellent source of referrals.
Online Referral Networks
These networks are comprised of individuals or businesses that refer clients to each other through online platforms or social media. For example, a social media influencer may refer their readers to a business they trust.
Affiliate Referral Networks
Formalized affiliate referral networks are another way to receive referrals by financially incentivizing businesses or individuals for referring customers to them. These networks pay referrers through a commission or other compensation. For example, an online retailer may have an affiliate program where other websites can earn a commission for sending customers to their website through a coded link. To create a program like this, you need good referral tracking software to ensure all referrals are tracked and referring businesses are compensated appropriately for the referred business.
Which of these referral networks will work for you? As many as you can be actively involved in. While some of these referral sources require more relationship work than others, all entail building rapport and following the steps below:
How to Create a Well-rounded Referral Network
1. Identify your target audience. Start by identifying your ideal customer and where they might look for your services or products.
2. Research potential referral partners. Research potential referral partners who cater to your target audience. Look for businesses that are complementary to yours and have a similar customer base. You can approach them directly to start building a relationship or join a formal referral group that will put you in contact with people in your desired industries.
3. Build trust and rapport. It's essential to build trust and rapport with your referral partners. This can be done by offering excellent service to their clients and providing timely feedback on the status of referrals. Be sure to keep your referral partners updated on your services, new products, or changes in your business.
4. Stay in touch. Regularly reach out to your referral partners to maintain a strong relationship. Find out how you can help them grow their business. A strong referral network is a reciprocal relationship. Stay in touch through email, newsletters, social media, texts, and meet ups. Keep them informed of any new offerings or changes in your business. Be proactive about finding these things out about them as well.
5. Evaluate and adjust. Finally, regularly evaluate your referral network and adjust as needed. Identify which partners are providing the most referrals and fine-tune your efforts to focus most of your time on those who are bringing in the most business. Also, regularly evaluate your referral program's success and adjust the incentive structure as necessary.
Creating a well-rounded referral network takes time and effort, but it can be a valuable source of new business. By identifying the right partners and building strong relationships, you can create a network that benefits everyone involved.