Businesses need clients to grow, so building a referral network should be a vital component of your marketing strategy. Word-of-mouth referrals are the primary method of driving business, according to the business owners surveyed by Alignable small business referral network.
In addition, research from Nielsen indicates that 22 percent of consumers won’t make a purchase after a negative review. Multiple negative reviews can be all it takes to send a product or business down.
Positive word-of-mouth marketing via a strong referral network can build client loyalty, create community, and fuel your business growth.
What is a Referral Network?
For many service-based businesses, such as law firms, growth is the key objective. It’s important to build a referral network that can spread the word about your business to new prospects.
A referral network is a network of individuals and organizations that can provide referrals to their own network. This can be in the form of formal or informal agreements. The network can include loyal customers, industry professionals, non-competing businesses, or suppliers.
Along with marketing campaigns, referral networks can attract new clients organically and cost-effectively.
How to Build and Sustain a Referral Network
Whether your business is a family law practice, an HVAC company, or a software startup, an effective referral network is a key factor in the exponential growth of your client base. To grow your network, you must:
Seek Personal Introductions
Referrals may reach out via email or text, but that can be impersonal. Whenever possible, ask for an in-person meeting or a video conference to show your investment and interest in the client. If these options aren’t possible, do a phone call.
When the meeting is finished, set up the follow-up meeting. Encourage the prospect to contact you again to ask questions or learn more, so you can build a future relationship.
Understand What Makes Your Business Different than Your Competitors
You must understand the nature of your business and its services to effectively sell it to others. What are you doing better than your competitors? What makes you different? How will you meet the client’s needs?
This is an elevator pitch or a 90-second summary of your business that positions it as the solution to your client’s problems. It should be short, direct, and easy to remember.
Set Up an Incentive Program
Incentive programs are excellent tools for getting prospects and existing clients excited about your business. By simply offering an incentive to your clients for referrals, you can motivate them to spread the word.
The best way to accomplish this is with guidelines and eligibility. For example, ask clients to leave an authentic review on your website or a business page like Yelp in exchange for a gift card or service upgrade. You can offer more for a referral, and to sweeten the deal, offer incentives for both the client making the referral and the prospect, but only if they sign on to your service.
No business is alike, so no referral program should be alike. Refine your incentive program to your business’s service and what your clients may appreciate. For example, a software company could offer a free trial of a high-value product or complimentary add-ons, such as storage space.
For a child support law firm, you could offer gift cards or donations in their name and discounts on legal services for the client making the referral, and discounts for the referred prospect.
Get Involved with Trade Associations or Industry Organizations
Growing a referral network with professionals from trade associations and industry organizations helps you build your business’s authority in the industry and connect with high-value individuals. These professionals may have the ideal audience for your business, and by building a relationship with them, you can grow your opportunities to get more leads and clients.
- Some of the best ways to get started include:
- Attending trade shows and industry conferences and networking
- Joining industry groups on social media
- Engaging in online forums for your industry
View Chance Encounters as Opportunities
Every interaction or meeting you have could lead to a new client. It’s important to be prepared and actively network, even when you’re not on the clock. Keep your elevator pitch ready and get used to selling your business – the cashier, waiter, or friend of a friend could be the next person in need of your services. And even if they’re not, they may know someone who will be.
Be sure to carry your business cards and offer them to people when you make a possible connection. You can also share business cards with business affiliates and ask them to keep them in their offices.
Provide Exceptional Client Service
If you want exceptional client relationships, you have to offer exceptional client service. You must have the systems in place to ensure that every team member upholds the same standards and delivers the same service to your clients.
Consider every detail of the client experience, including the communications, speed of responses, and complaint protocol. Have a detailed plan in place to make sure your entire team offers a positive experience to clients.
Follow Up with the Referral Source
Your referral network is helping you out, so you must return the favor. Show your appreciation for your referral sources and cultivate positive, meaningful relationships. Be sure to send out thank-you notes after a referral leads to a client, and check-in with your industry referral sources often.
Remember that the relationship is two-way. Whenever possible, refer to other businesses to pass on the goodwill and contribute to another business’s success. In fact, you can both benefit from creating exchange referrals for services.
For example, you may have an HVAC business and your clients always ask about good roofing companies. If you have exchanged referrals with a local roofing business, you can share referrals to increase the chances for both businesses to generate new clients.
Start Building Your Client Base
Word-of-mouth referrals are one of the most cost-effective and beneficial means of attracting new clients and building your client base. When you provide a positive professional experience, current and past clients, industry partners, and business affiliates are happy to spread the word and can drive valuable business your way.
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Author Bio: Maxwell Hills is the founder of Hills Law Group, a premier Orange County family law firm with a concentration on high net worth divorces. Max’s entrepreneurial career stretches back to his teenage days when he had his music used in Grey’s Anatomy and ESPN. Today, Max has used that experience to build Hills Law Group with 0 customers and $0 in revenue to a respected firm in the industry.
