Referrals can be incredibly powerful for your small business - they are the simplest and most consistent way to grow your customer base.By developing good relationships with your existing customers, your business will expand naturally as they share their positive experience with their own networks. But, if you want to take a more proactive approach to growing your business, you may be interested in building a business referral network.
What is a business referral network?
A business referral network can help you increase referrals and gain some control over the process. For small business owners looking for fast results, it’s a proven way of expanding your customer base.
It’s all about giving and getting referrals. Official referral networks include companies within related industries banding together to provide referrals for one another. For example, an estate agent may build a network of mortgage brokers, solicitors, removal firms, and even home insurance providers. Then when a customer asks you about getting a mortgage or to recommend a company to help them move into their new home, you provide the details of those in your network. Likewise, when they are asked about estate agents in the area, they will point them in your direction.
Informal business referral networks also exist. You don’t need to be part of an official group. You can network with other professionals in your industry and simply refer potential clients to those businesses without an official agreement. And if you nurture that relationship, the chances are you’ll find them referring people back to your business.
How to build a business referral network
Follow these five steps to build up a business referral network of your own.
1. Connect with other professionals
Your first step should be to connect with other professionals and companies both in and outside of your industry. Think about all the other products and services your customers would benefit from. If we look back at the earlier example we gave, as an estate agent your customers will also be in the market for a mortgage broker and a removals firm. Who are the people in your local area providing these services? And what value can you provide for their customers?
Networking events are a great opportunity to make valuable in-person connections. The idea of attending networking events isn't appealing to everyone, but the more you attend, the better you'll get at it. Besides, the purpose of networking events is not to treat it like a sales pitch. Have your elevator pitch ready instead. And focus on being genuine, being yourself and building mutually beneficial relationships.
2. Connect with your local Chamber of commerce
Your local Chamber of Commerce can be valuable in facilitating your professional connections. At the Bedfordshire Chamber of Commerce, we host regular networking events where you can meet with other businesses in the area and are always putting our members in touch with other businesses that could help them. Becoming a member of your local Chamber of Commerce is a great way to raise your business profile and gain referrals.
3. Get more involved in groups and associations
People like working with those they have common ground with. So find more ways to get involved in the associations, groups or organisations you are a member of to showcase your expertise. For example, if you’re a marketing company, offer to host a workshop for other small businesses in the group who could benefit from your knowledge.
4. Offer a discount or rewards program
Consider offering a discount or reward to customers or clients who provide referrals. This will help motivate people to talk about your business with others. For example, if you’re in online retail, you could consider a ‘20% off your next purchase' offer to customers who successfully refer your company to someone else. What’s more is the customer you’ve offered the incentive too is now primed to make another purchase. This doesn’t work for every type of company, but for some, it can be a great way of generating more business.
5. Be referrable!
Of course, the best way to ensure referrals is to offer an excellent and consistent service to your current customers. Focus on providing an outstanding service - a service that people want to talk about and share with others - and you will naturally start to see your business grow.
A business referral network is a great thing for any business to have. It’s an effective strategy because it’s based on trust. Focus on building genuine connections, sharing your knowledge and giving back to other businesses in related industries, and you’ll see your customer base grow.