Start a Referral Group – Or Join One
Choose ten people that you think would be good members of your referral group. They may or may not be your Centers of Influence. Let them know that you are establishing a referral group and that they were one of the first people to enter them mind because of their great reputation.
Ask them to educate you on exactly what they do. No favors, no begging, no debt. Just a clean, fair, intriguing and powerful approach.
Have monthly lunches when your group can get together to discuss their businesses, share referrals, and perhaps visit one of the group member’s businesses to allow them to explain what they do. Find ways to serve your group members and educate them on how to grow their own businesses.
You can begin to grow your network slowly and invite other people who you or other members would feel good about recommending. It’s just a matter of expanding your network to tap into the network of other professionals. Simple, doable, easy. No selling required. Just honesty.
Here are four steps to maximizing your referrals and revenue:
- Take charge as the host of this network In other words, be their leader. (No need to tell them, however.)
- So, now that you are the leader, ask yourself, ‘What does my referral team need most that I can provide for them at a very small cost to myself?’
- The answer? Training in how to build their businesses via referrals.
- Send a monthly note and update your group about each others businesses. You need to be consistent with this mailing (or emailing) each month. In effect, the monthly list/email also works as an effective reminder that you are there!
I have a friend who is a Certified Financial Planner who sponsors a monthly luncheon. Members pay a quarterly fee which covers the cost of the lunch. She gets 50 to a 100 people at her meetings and has literally stopped his advertising efforts all together.
Are Referral Fees A Good Idea?
Use a referral fee as your last ditch strategy. Money has never bred loyalty. Friendship, trust, and a positive relationship are what create loyalty to you and your business. If you give referral fees you will undoubtedly run into a situation in which the referrer claims he gave you a referral and you disagree.
If one of your competitors starts giving referral fees and you feel the need to continually match them, it starts a referral fee war that does no good for anyone (I’ve seen it happen). Think of how embarrassing it would be if your customer found out that a referral fee changed hands. There wouldn’t be a lot of trust and confidence left in the relationship, would there?
It just seems that whenever money enters into the equation and there is no surefire way to track it, trouble is on its way. I’ve seen too many good relationships go sour because of a trivial referral fee dispute. Referral fees breed everything you don’t want in a trusting relationship.
Conclusion
Establishing a referral program with your customers and other influential people is absolutely critical. Many small business people make the mistake of not institutionalizing a systematic program for referrals. They confuse word of mouth advertising with a referral system and, hence, overlook the single most effective advertising for a small business.
Don’t make the same mistake. Develop your networking skills and referral programs today and start receiving an endless stream of new customers.
