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The Secret To Referral Marketing Made Easy

Author: Rick Frishman   |   April 6th, 2011

Unless you’ve been living in a cave, you have some sort of network in place. It’s your friends, family, doctor, dentist, accountant, lawyer, personal trainer,  and coworkers.

You’ve recommended them to members of your circle. But, how do you leverage your connections for a profit?

Building a network isn’t difficult. Neither is referral marketing. You’ve been doing it your entire life without even being aware of it. It’s simply making connections with people and turning those connections into close, long-term relationships.

The major difference between these networking relationships and the kind you’ve been creating for years is that the focus should be on promoting your business. You want to strengthen your relationship with every member of your network so that they will help you build your business.

As with anything, there are certain ways to approach referral marketing. You must:

Be direct and bold.

Explain what you have to offer, the importance of their help, and stress that you’re trying to develop mutually beneficial relationships.

Ask how you can repay or help them. Most people understand the reciprocal nature of business and know that business relationships are incentive enough.

Ask only for the chance to prove yourself.

One of the major benefits of adding new members to your network is that you are then able to access the network that person has already built. They instantly become a member of your publicity campaign. When you approach the members of your network for help in promoting yourself, you can:

Tell your contacts that you’ve started your own business, or have expanded your existing business and are seeking referrals.

Ask everyone for three referrals. At first, they may be hesitant, but put them at ease by showing them examples of your past work.
Point out that you’re soliciting their assistance because you’ve moved into larger offices, put on additional staff, added new equipment or merchandise, or just wrapped up a major project.

Ask for specific names of people that you can contact and get permission to use their names when contacting those people.

The stronger and larger your network becomes, the easier it will be for you to promote your newest product or service. By calling on your network members to help you wage your publicity campaign, you are using the low-cost (and at times cost-free) method of word-of-mouth to accomplish your goals.

Referral Fees
Clarify with all referral sources up front whether they want a referral fee—a monetary incentive for providing business contacts. If they do, agree upon the amount in advance. In some industries, referral fees are unethical. It varies from industry to industry. So check out what’s acceptable in your field.

When you secure a client or a job through a business referral, reward the individual who recommended you. If they can’t or won’t accept a referral fee, give them some type of gift—a gift certificate, tickets to an event, or a charitable contribution—or perform extra work at no cost to show your appreciation. Even the smallest gesture will be appreciated and it’s good business.

In Your Field
When looking for referrals within your area of business, approach former bosses, former coworkers, and established company heads. Former employers and coworkers are great referral sources because they know you, the quality of your work, and are usually eager to see you succeed.

Another possibility is to contact larger businesses to see if you can handle their overflow, or assist with projects when they need help. These types of relationships will guarantee that you receive referrals down the road.

Some people in your business field may fear that you might steal their clients or customers. To ease their concerns:

Be willing not to disclose to referred customers or clients that you operate a separate business.
Offer to act as the referral source’s employee while handling their referrals.
Work out of the referral source’s office or use his or her stationary.
If, after a referral is completed, the clients or customer wants to hire you directly, don’t accept the business without first obtaining the consent or your referral source and agreeing to pay a referral fee.

Don’t steal customers or clients. Over the long run, you’ll be judged on your reputation for ethics, honesty, and loyalty, which far outweighs whatever you might receive from stealing a referral source’s clients or customers.

In Complementary Fields
Solicit businesses in different, but complementary fields. Create alliances to mutually refer clients or customers. For example, if you’re a florist, approach wedding, party, and event planners; caterers; photographers videographers; and banquet halls operators. If you operate a payroll preparation service, attend events for business accountants, financial consultants, and small business operators.

While soliciting referrals outside of your industry, distribute samples of your product. Let key people experience how terrific it is. Give out samples that will make them want to work with you. Personalize samples to include something unique for each person or business you pitch.

If you run a service business, print a one-page explanation of why your service is superior. Write a great headline, a compelling lead paragraph, and bullet the benefits your service will provide. Use attractive paper that reflects the level of professionalism, design, and inventiveness you want to convey. Include photographs and illustrations. List fee schedules, guarantees, and attach testimonials from customers declaring the excellence of your work, your professionalism, and how much they enjoyed working with you.

Go to workplaces and try to meet business operators. If that’s impossible, leave a hand-written note with your sample or written material. In the note, express regret that you couldn’t meet face-to-face and explain that you’re seeking referrals and would love to speak with them at their convenience. Follow up the note with subsequent visits, phone calls, or e-mails.

Remember, Businesses are built on referrals and everyone is a potential source of new business. Use your existing network to build your customer base and improve your referral marketing. Ask each contact for three referrals and clarify in advance whether they expect referral fees. And when sources produce referrals—show your appreciation.

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