Referral Key is free and setting a Bounty (the amount you’d be willing to reward others for a referral that results in new business) is as simple as selecting an amount from the drop down menu.
Your Bounty will always appear under your profile picture , so other members will know that you’re serious about taking on new clients and they’ll know you’re equally serious about rewarding them for sending you new business. When you receive referrals from other Referral Key members, those referrals will appear in the “View Referrals” section.
You can follow up with the person referred and if YOU decide the referral was a success, simply click “Send Bounty” and the money will be immediately emailed to the member who sent you the referral.
Briefs are 200 character micro-messages visible to trusted partners in your private referral network. A Brief is similar to a “tweet” on Twitter® with some key differences that help you strengthen partnership within your private professional network.
On Referral Key you exchange referrals with other seasoned professionals who are also eager to help you boost sales. Unlike other social media services, that make your information public, and often foster broadcasting promotions rather than intimate sales networking for small businesses; Referral Key Briefs are relevant and sales focused.
To post a Brief, simply type your message and click post.
Type “@FirstName-LastName” to direct a Private Brief toward a single (or more) associates. I.E. If you want to tell Steve Smith to meet you for lunch, but don’t want the rest of your network to know, you would type “@Steve-Smith”
You can attach brochures, documents, and files
You can Sync Briefs with other social media services to increase your reach and exposure.
Referral Key is the fun way to help friends, build referrals and grow your business. Unlike any other social or business networking service, every feature on Referral Key has been optimized to help you generate more referrals. Simply put, we bring new business to you!
Experienced professionals can become so entrenched within their specific industry that they lose the ability to effectively describe their services to the general population. Your referral marketing success is contingent on your prospects not industry insiders and competitors.
2. Lose the Jargon
Save the the acronyms and jargon for industry newsletters and colleagues, convoluting your message with superfluous detail and terminology may make you appear intelligent in an abstract way, but it will not land you the sale. You’d be surprised how quickly people will be put-off if you make understanding your services a big challenge.
3. How’s your pitch?
Seriously, you need a pitch. You may not be selling investors on the reinvention of the wheel but even an informal pitch is an incredible asset. Word of mouth won’t be very effective if half the people you count on advocating for you, can’t accurately relay the value of your services.
4. The worst type of referrals are the ones that never happen
Even something as straightforward as landscaping is subject to interpretation:
My fictitious pitch: “Referral Key Landscaping provides outstanding commercial landscaping services, specializing in tree removal, landscaping masonry, snow removal, and all aspects of planting and landscaping design.”
Good: Later on today your brother tells you he needs to redo his patio and might need a mason. Armed with the right knowledge you would say, “You should consider a landscaping mason. I know this great guy Chris at Referral Key Landscaping, he has commercial contracts with some very scrupulous clients but I bet he’d be willing to take a look at your patio and give a reasonable quote. I’ll tell him to give you a call”
Now imagine I take the assumptive approach when you ask me what I do:
“I do landscaping, cmon’ you know, lawns and stuff”
Bad: Later on today your brother tells you he needs to redo his patio and might need a mason. You don’t know any masons so you never refer your brother, I never get a sale, and your brother misses out on quality services.
5. Practice
If an attorney can effectively explain their legal services to a young child, they are golden. If a programmer can give their elderly aunt an idea of the opportunities and limitations of a complex programming language; they’re not only a good programmer but a talented business person as well. It’s easy to do a lot of back slapping and ego boosting over lunch with an industry insider. Seek out people who don’t have anything to do with your industry and see if they can absorb what you say and then accurately relay it.
The Test
Referral Key members generally fall into one of about 150 service industries. This is by no means a complete list but it will give you an idea of the diversity of small business professionals out there. Take a look. If you are unsure what just one of these service providers actually does, there’s a chance someone is looking at this list right now and may be unsure what you do.
Referrals are a vital source of sales for most small businesses. What separates the mediocre from the truly profitable referral marketers? Many pros are left scratching their head, wondering why some professionals seem to always have a mountain of new business while others sit around waiting for the phone to ring, you need to consider the referral marketing basics; the difference between mediocre and highly profitable referral marketing.
1. What is the quality of your business network?
Highly Profitable Referral Marketing: My business network is made up of top-notch service professionals I trust and whose quality of work I am familiar with. They refer people to me because they know I’m the best at what I do. We periodically reconvene to ensure we are both on target and continue to work toward our sales goals.
Mediocre Referral Marketing: My business network is an undefined cluster of people whom I have loose relationships with. I don’t personally know most of these people so it would be a bit uncomfortable to call them and talk referral marketing. I send out an email blast once in a while and hope for the best.
2. Do you regularly send referrals?
Highly Profitable Referral Marketing: I view referral marketing as a serious business activity and approach it with the same gravity as I would taxes, employees, and accounting. Everyday I am looking for more opportunities to refer people to other professionals I trust. Referral marketing allows me to leverage my most powerful asset; my reputation.
Mediocre Referral Marketing: I view referral marketing as a business-esque social activity. I expect people to send me business before I refer anyone to them. I sent one referral last month, unless an opportunity falls into my lap, I don’t bother.
Highly Profitable Referral Marketing: The people I refer are integral to maintaining my reputation amongst my associates. My long-term referral marketing success is contingent on my ability to create referral situations that are positive for both parties. It’s just as important that I refer quality prospects as it is that I am referring those prospects to quality professionals. I always follow up with both parties to ensure the referral was a success.
Mediocre Referral Marketing: I may refer someone but after that, it’s sort of out of my hands. My business associates should just be happy that I’m even sending people their way. If there is a problem they’ll let me know.
4. Are you organizing and tracking your referral relationships?
Highly Profitable Referral Marketing: I closely mange my referral marketing activities. To be successful I need to be able to answer fundamental questions. I want to know who’s in my network, which referrals are they sending to me and which am I sending to them? Are they following up on my referrals? Of the referrals I send and receive, which result in sales? Do my business networking partners feel the same way about our business relationship or are we totally out of sync? Which relationships need more attention? Are there opportunities to expand my network?
Mediocre Referral Marketing: I hand out business cards and wait for the phone to ring. I’m not exactly sure where my new business is coming from and I couldn’t really tell you how people in my network feel about the referrals I send them. I figure if there are any problems they can call me.
Small businesses on Referral Key fall into one of over 140 distinct industries. Being service professionals, we share an eagerness to network and exchange referrals. But outside of business networking and referral marketing, these small businesses are extremely diverse and can be grouped or divided according to many factors. One such factor is whether the day-to-day activities of the business occur in front of the computer or not.
Work and Pleasure
Marketing consultants, PR agents, graphic designers, programmers, etc. may spend the majority of their day browsing on a computer. For these professionals, leisure and work are often interspersed throughout the day. The line between using the web for fun and for work can be blurred too. It’s no wonder that these professionals are the strongest advocates of, and make up the majority of small business owners participating in blogs, Twitter, Facebook etc.
i.e. Jill is a freelance graphic designer, throughout the day she bounces back and forth between Photoshop and the net. (Twitter, her favorite blogs, Referral Key, message boards…)
Work then Pleasure
Landscapers, dentists, doctors, home inspectors, contractors, etc. are less likely to be in front of a computer; and if they are, they tend to be running specialized software. For these professionals there is a much clearer dichotomy between computing for work and computing for leisure.
i.e. Dave is a contractor. He has two Nextels and a calculator on him at all times. He carries his laptop in his truck but almost exclusively uses it to run his CAD software.
What Do You Think?
Do you believe think certain professions are more likely to be drawn to, or reap the benefits of new social technology?
If this is true, will there be a social media divide and what is the fallout?
Mobile apps may be a way to engage everybody but I wouldn’t count on them being a deal breaker. Most people don’t discover and become acclimated to tools via mobile, adoption usually happens the other way around. Mobile app users tend to be even further entrenched in a social media than their desktop-only counterparts.
We randomly selected 100 social media-savvy small business owners and asked them the following question:
“Do you generate more new from professional relationships with at least some face to face networking or do you generate more new business from exclusively online networking relationships?”
While this is not the largest sample size, it reminds us that a small trusted business network is much more effective at generating sales leads than a massive network of loose social media connections. The optimal idea is to incorporate both social media technology and your trusted business network into a sales focusedreferral marketing strategy.
Avid Twitter user and Toronto area networker Tad Mclaughlin:
“As great as social media is, and as much as it can enrich your existing relationships, the bottom line is that the majority of your new business is going to come from networking with professionals you already know and trust.”
How organized is your referral marketing strategy? You may be surprised to learn that many of your colleagues and competitors are beginning to use the internet to effectively track and generate sales leads. Professionals who send, receive, and track the majority of their referrals through Referral Key see a substantial increase in sales.
We followed the progress of two dozen professionals over the course of six months.
Tracking leads becomes more profitable the longer professionals consistently do it. After about three months, professionals who track leads are already identifying trends within their network and making smart decisions based on that data:
Identifying the strengths and weaknesses of particular strategies
Addressing imbalanced relationships
Finding key sources of new referrals
Understanding what compels colleagues and customers to refer you new business
Meanwhile, professionals who do not track leads will continue to get the same mixed results because they’re not arming themselves with any knowledge to improve their strategy. Online referral tracking will become a standard practice in the near future. Those who stand to gain the most are those who get organized today… ahead of the curve.
Connecting professionals within your business network is not only mentally rewarding but it can be financially rewarding. All too often we only consider the sales needs of ourselves and our immediate referral marketing circle. Creating synergy between other professionals is an important way to expand your network.
I bet you can think of at least half a dozen opportunities for collaboration between two parties that don’t directly know each other.
As you become more aware of your colleague’s needs, you’ll find the opportunity to connect professionals is overwhelming.
1. Social Media naturally rewards those who give their customers something worth talking about.
2. Business Networking in the digital age means colleagues have greater access to information in determining if you’re someone they should associate with; that’s sound referral marketing.
3. Large companies are getting larger which inherently makes customer service more difficult for them and makes individual service that much more appealing.
4. The prevalence of outsourcing makes in-sourcing that much more appealing.
5. Communication is quickly becoming the most important the most important business asset and customer service is where the rubber meets the road.
Customer service is no small matter and it’s a big deal for the long term success of small business.
We proudly present Fable Fridays. This weekly installment will draw parallels between referral networking and some of society’s most cherished moral tales: Aesop’s Fables.
You could go to expensive seminars and buy up every book on referral marketing, but it doesn’t take a marketing genius to realize that Aesop got it right nearly 3,000 years ago.
A FLY bit the bare head of a Bald Man who, endeavoring to destroy it, gave himself a heavy slap. Escaping, the Fly said mockingly, “You who have wished to revenge, even with death, the Prick of a tiny insect, see what you have done to yourself to add insult to injury?’ The Bald Man replied, “I can easily make peace with myself, because I know there was no intention to hurt. But you, an ill-favored and contemptible insect who delights in sucking human blood, I wish that I could have killed you even if I had incurred a heavier penalty.”
“Revenge will hurt the avenger”
The Two Small Business Bloggers
There once were two small business bloggers. Each had their own marketing formula of which they’d write about and promote. They also each had a small but loyal niche audience; many of whom read both blogs. One week, the first blogger, seeing an opportunity to criticize the second, released an article disparaging the others marketing strategy.
The article had the affect of highlighting the triviality of both blogger’s offering.
“Marketers who criticize other marketers often reveal more about their own services”
David is an accountant and John is an attorney. Dave and John are familiar with and value the quality of each others work. At lunch one day, they decide to begin exchanging sales leads with each other. The next day David finds out one of his loyal clients may need estate work done. David refers that client to John and hopes that he will refer clients to his accounting firm as well. Both David, John, and the client feel good about doing business with each other.
Marketing 101 tells us that our existing clients are our most valuable asset in growing our small business. Lisa is a seasoned Realtor who’s developed a network of many satisfied clients; they know she does good work. To encourage word of mouth and to generate sales leads, Lisa offers an incentive to those who send her qualified sales leads. Carol’s cousin Dale is looking for a new home. Carol refers Dale to Lisa and Dale ends up purchasing a home through Lisa. Lisa pays Carol a commission for helping her generate sales leads. Lisa may opt to offer a non-monetary reward as well i.e. travel, charity, gift cards etc.
3. Referral Marketing with Three (Or More) Degrees of Separation
Successful referral marketers don’t wait around for opportunity to come knocking, they seek new referral opportunities everyday. Kevin is a financial planner and he receives a lot of new business from Ted, an accountant. The problem is that Kevin rarely meets people who need accounting services. Instead of waiting around for the referral relationship to break down, Kevin reaches out to his colleague Thomas, whose law firm has clients who often need accounting services. Ted receives an equitable amount of referrals because Kevin ensures Thomas’s clients consult Ted for their accounting needs. Kevin does meet people who need legal services and of course, in exchange for allowing him to be a liaison, Kevin refers those clients to Ted’s law firm. Kevin, Ted, and Thomas benefit from their referral relationships.
Every individual has a unique style of finding business referrals. Certain industries may be more suited to work within a particular strategy. A business network is as unique as the members it’s comprised of.
Brought to you by Referral Key “Your Trusted Referral Network”
What Referral Marketing Is:
Referral marketing is a relationship based marketing strategy whereby, individuals agree to send each other new business. Referral marketing is probably as old as humanity and as natural as breathing. We have an innate need to promote positive experiences and encourage others to share in that experience. From recommending a favorite pizza joint, to arranging a meeting between a trusted accountant and a colleague, we love to promote what we like. Even as mass media has allowed for large scale advertising, referral marketing is the bread and butter for many small business owners. Small business owners who master relationship based marketing achieve high levels of financial and personal fulfillment.
If you promote your business, actively find new referral partners, and maintain balanced relationships with an organized referral management system; you will generate sales leads and drive more revenue.
What Referral Marketing Is Not:
Referral marketing is not a quick fix marketing solution. The limitless potential of referral marketing is largely based on momentum. In other words, referral marketing rewards those who consistently and consciously manage and expand their business network. The arrival of the internet and mass communication has also signaled the arrival of millions of rogue marketing programs which range from questionably-unprofessional to unethical. While most of these people rarely turn a profit, they leave their cyber-junk all over the internet. Unfortunately, some of these people have adopted legitimate sounding terms for their programs i.e. marketing, referrals, business network.
Bottom Line:
Email lists, advertising, and cold calling pale in comparison to the power of exchanging business referrals with professionals that know and trust you.
We proudly present Fable Fridays. This weekly installment will draw parallels between referral networking and some of society’s most cherished moral tales: Aesop’s Fables.
You could go to expensive seminars and buy up every book on referral marketing, but it doesn’t take a marketing genius to realize that Aesop got it right nearly 3,000 years ago.
One day a countryman going to the nest of his goose found there an egg all yellow and glittering. When he took it up it was as heavy as lead and he was going to throw it away, because he thought a trick had been played on him. But he took it home on second thoughts, and soon found that it was an egg of pure gold.
Every morning the same thing occurred, and he grew rich by selling his eggs. As he grew rich he grew greedy; and thinking to get at once all the gold the goose could give, he killed it and opened it only to find nothing.
“Greed often overreaches itself.”
The Superfluous Accountant Referral
One day a fledgling accountant was contacted by an overburdened bookkeeper. The bookkeeper said, “I saw your profile in the small business directory and was impressed with your rating. Due to a new venture I’ve been pursuing, I’ve been unable to find the time to follow-up with every lead I receive. I’d like to refer a few clients who could use your services in the hopes that you will reciprocate someday.”
Seeing this as an opportunity to boost lead generation, the young accountant eagerly agreed.
The accountant received an occasional referral from the bookkeeper; this supplemented his current clientele. The accountant thought to himself, “How can a bookkeeper with such little time have such a surplus of referrals? Perhaps I can circumvent this bookkeeper and go straight to the referral source!”
After browsing LinkedIn, the accountant realized that the bookkeeper was receiving referrals from a close colleague at a larger firm. When the firm met with potential prospects who were too small to use their services, they would refer the prospect to the bookkeeper.
The accountant contacted the bookkeeper’s colleague without the bookkeeper knowing. He never heard from either of them again.
Bank of America and Citibank are anything but small which makes them an odd place to look for exemplary small business lead generation.
Never the less, both banks know the power of referral marketing and understand that promotion campaigns are a very effective way of generating new business.
Small business owners should take notes and learn from “the big guys” mistakes. If you want to apply what you learn here and run your own promotion campaign, check out Referral Key
So who has the more effective referral program?
We looked at both Citibank and Bank of America’s referral program and analyzed them on three important factors:
1. How effective is the message?
2. How enticing is the referral reward?
3. How easy is it for the referrer to be rewarded?
Bank of America
How effective is the message?
BoA is very outspoken about their Customer Referral Program and it is very easy to find the details of this program online. The program breaks into 3 categories of accounts your referee can open (Student, Personal, Small Business) and you are rewarded ($10, $25, $50) respectively. Their referral offer message is very clear. Below we’ve scanned in a brochure from a local branch:
How enticing is the referral reward?
If your referee opens a student account you’ll receive $10, a personal account you’ll receive $25, and if they open a small business account you’ll receive $50. Your referee will need to maintain a $125 balance in their student/personal account or $250 in their small business account, for at least 30 days for you to be rewarded.
A $10 reward for a student referral seems a bit menial but $25 for a personal and $50 for a small business referral could be considered a fair offer by some.
How easy is it for the referer to be rewarded?
BoA does not make it easy for existing clients to participate in the referral campaign and send them new business. After 90 days and 3 trips to the bank, a $25 reward does not sound as rewarding. Furthermore, passing a physical “referral card” between at least four different parties all but ensures complications, a call to customer service, and a resulting headache.
The process a participant must go through before they are rewarded for sending BoA new business:
Open and print a PDF form (Or get a form at a local branch).
Complete the form.
Physically hand the form to the person they are referring.
The person you are referring must then take the form to a local branch.
The person referred needs to open an account, qualify, and maintain a minimum balance for 30 days ($125 for Student/Personal and $250 for Small Business).
The reward arrives via check up to 90 days after the referee opens their account.
Presumably, the referrer returns to the bank to deposit the check.
Citibank
How effective is the message?
It’s very difficult to learn about the Citibank “Member Get Member” program. After an extensive online search and a lengthy customer service call, we decided to visit a branch where we found some literature about the program. The program breaks into 3 categories of accounts your referee can open (Student, Personal, Citigold) and you are rewarded ($10, $50, $100) respectively. Their referral offer message is clear and unlike BoA, they make the referral reward readily visible. Below we’ve scanned in a brochure from a local branch:
How enticing is the referral reward?
If your referee opens a student account you’ll receive $10, a personal account you’ll receive $50, and if they open a Citigold account they’ll receive $50. Your referee will need to maintain a $100 balance in their student/personal account or $1,000 in their Citigold account, for at least 30 days for you to be rewarded.
As with BoA, a $10 reward for a student referral seems a bit menial but $50 for a personal and $100 for a Citigold is a much better motivator than BoA’s.
How easy is it for the referer to be rewarded?
CitiBank does not take advantage of an online referral tracking system like Referral Key. Bank of America does not make it easy for existing clients to participate in the referral campaign and send them new business. Citibank also makes it too difficult for their current clients to send them new business. The main difference between the BoA referral process and the Citibank referral process is that Citibank has certificates which save you the time of filling out a form but also requires you to make another trip to a local branch to pick them up. Citibank’s direct deposit of the referrer’s reward is much more seamless however, 90 days is a long time to wait to be rewarded and 120 days might as well be “someday.”
The process a participant must go through before they are rewarded for sending Citibank new business:
Pick up literature at the Bank to learn about the offer.
The referrer picks a custom certificate from a teller at a local branch.
Physically hand the form to the person they are referring.
The person you’re referring must then take the form to a local branch.
The person referred needs to open an account, qualify, and maintain a minimum balance for 30 days ($100 for Student/Personal and $1000 for Citigold).
The reward arrives as a direct deposit up to 120 days after the referee opens their account.
Synopsis
Final Thoughts
Some may say, “Isn’t the better program the one that generates the most new accounts?” but every referral has a life beyond the sale. They may have gotten a new sale but if they didn’t track those referrals and make the process as easy as possible, they now have two more people who think less of your company.
Large corporations understand the power of W.O.M. (Word of Mouth) marketing. They also understand that an incentive can be the best way to get both current clients and prospects talking. It’s no wonder that promotion campaigns have become an everyday part of commerce. Whether it’s $50 for referring a friend to Bank of America or free Vonage phone service for getting your family on-board, promotional campaigns are highly effective.
Unfortunately, many small business owners miss out on dozens of potential pre qualified leads because they’ve never tried running an effective referral marketing promotion campaign. One of the most difficult challenges to an effective campaign is tracking incoming referrals. People that refer you new business need to be confident that you will reward them for referrals that result in sales.
The Power of a Promotion Campaign
For example: Joe is a computer repair specialist with a few hundred contacts. Joe informs his contacts that if they send him new clients who eventually use his services, he’ll send them a $20 gift certificate to Starbucks. It’s a no-brainer. Joe’s typical job will bring in a $100; if he closes a sale that he otherwise wouldn’t have, then the $20 gift certificate is considered short-change. Joe’s promotion campaign can become exponentially more powerful when you also consider the opportunity for repeat business from these new clients.
The Tricky Part
Sounds perfect, right? The only challenge of a promotion campaign is ensuring the right people are rewarded.
For example: Diane receives Joe’s offer to send him new business. Diane knows first-hand that Joe does good work and she’d also like to have her morning coffee paid for; she is more than happy to refer her friend Lisa who’s been having computer troubles.
Lisa eventually gets around to calling Joe. As you could imagine, unless Lisa specifically says that she has been referred by Diane through the promotion campaign, Joe is not going to reward Diane. Furthermore, it may be a few weeks before Joe closes the sale with Lisa. During the interim, Diane is going have to play phone tag with both Joe and Lisa to determine whether her referral lead to a sale. You can image that this is uncomfortable for everyone. Situations like these are common, they often result in referrals not being rewarded and sometimes negative feelings.
Direct TV Promotional Campaign
Direct TV is currently running a powerful promotion campaign. They’re offering a $100 savings to customers that refer them new business. But to see a very visible example of why it’s important to effectively track your promotion campaign you need only to Google, “Direct TV Refer a Friend.” The fourth search result is a RipOff Report. The gist of the report was that clients were not properly rewarded for sending new business. Who’s right or wrong is irrelevant. What’s important is that this was a good relationship gone sour. We can only imagine how many times this must have happened but was not publicized.
The Solution
The idea is to make it as seamless as possible for your contacts to refer you new business and be rewarded. You can use technology to eliminate the guess work for you and more importantly your participants. A tool like Referral Key turns promotion campaigns into an exact science. Automatically upload the contacts you’d like to recieve sales leads from, create a custom campaign that makes sense, and send it. When the recipients want to send you new sales leads, they simply send you the prospective client’s contact information directly through Referral Key. They can be confident that you have the ability to see who the referral came from, the prospect’s contact information, and the ability to properly reward referrals in a timely manner.
In 1934 at the height of the Great Depression, Charles B. Darrow of Germantown, Pennsylvania, showed what he called the MONOPOLY game to the executives at Parker Brothers. Fast-forward 75 years and not only is Monopoly the most popular board game in the world but the economic circumstances that lead to it’s inception seem eerily similar to today’s.
This is Part 1 in a series that examines the parallels between the world’s most popular board game and referral marketing.
Preparing for Success
Some people play Monopoly as a way to pass the time on a rainy day, while for many others Monopoly can be a heated game of business strategies whose outcome may even hint at one’s entrepreneurial prowess.
Just like in the “real” business world, success in Monopoly is both a combination of skill and luck. One of the biggest differences between people who consistently win in Monopoly and those who don’t, is how they approach the game.
It’s the same as running your small business; Monopoly is a game of relationship building, not short term sales. Establish strategic relationships early in the game, only then will you be in a position to drive revenue. It’s only after you’ve established a trusted network that you can begin to leverage a whole new set of opportunities.
For example, you can establish trust with “Uncle Joey” over the course of several turns. Overlook a rent fee, cheer him on, hang on to properties that Uncle Joey may need in the future, propose some favorable trade options, or maybe just grab him a drink from the fridge.
A few hours into the game you’ve bought two rail road properties and your cousin “Dave” has bought one as well. Whoever gets the fourth railroad will be able to double their profits from the rent; a substantial long term payout. Low and behold, Uncle Joey gets the final railroad. Uncle Joey now has a bargaining chip and both you and your cousin Dave will begin to pitch Uncle Joey on why your trade is a better deal.
No matter how good a salesman Dave is, you’ve got an advantage because you’ve built trust. At the very least, you’ll probably be able to convince Uncle Joey that your offer is a much more mutually beneficial option. You may want to use this opportunity to strengthen your relationship with Uncle Joey by looking out for his best interest. Say something along the lines of, “On second thought, I think you should hold onto that railroad Uncle Joey. It’s only likely to increase in value over time. In fact, I’d be willing to pay you to not sell this property to Dave. Just simply hold onto it and I’ll look out for you.”
As you could imagine, overtime your relationship with Uncle Joey could be the most important reason why you’re the last two in the game and Dave is sitting on the coach catching the end of the ball game on TV.
This isn’t just Monopoly 101, relationship building is a strategy that transcends the dinner table. Small business owners who are serious about driving revenue are equally as a serious about leveraging professional relationships to generate more business referrals.
For more insight into applying your Monopoly strategy to your small business (or vice versa), check out:
We proudly present Fable Fridays. This weekly installment will draw parallels between referral networking and some of society’s most cherished moral tales: Aesop’s Fables.
You could go to expensive seminars and buy up every book on referral marketing, but it doesn’t take a marketing genius to realize that Aesop got it right nearly 3,000 years ago.
Once upon a time there was a Miser who used to hide his gold at the foot of a tree in his garden; but every week he used to go and dig it up and gloat over his gains.
A robber, who had noticed this, went and dug up the gold and decamped with it. When the Miser next came to gloat over his treasures, he found nothing but the empty hole. He tore his hair, and raised such an outcry that all the neighbours came around him, and he told them how he used to come and visit his gold.
“Did you ever take any of it out?” asked one of them.
“Nay, said he, “I only came to look at it.”
“Then come again and look at the hole,” said a neighbor; “it will do you just as much good.”
“Wealth unused might as well not exist”
The Accountant and his CPA Referral
Once upon a time there was an accountant who belonged to a very powerful referral network. Every week he would gloat over the caliber of the professionals within his network but would rarely send referrals to them.
A competing CPA from the business directory, who had noticed this, began encouraging others in the referral network to send him new business. He promised them a timely and qualified business referral for every referral they sent him.
When the accountant noticed he was receiving less referrals, he called his colleague and told him about decline in new business.
“Did you always thank your referral source and send them reciprocal sales leads?” asked the colleague.
“Nay, said the accountant, “I rarely send new referrals back to my colleagues.”
“Then come and look at the phone book,” said the colleague; “these sales leads will do you just as good.”
“Referral relationships unused might as well not exist.”
Referral marketing is an essential strategy for most small business owners. Effectively managing your referral is one of the easiest ways to increase the quantity and quality of your sales leads.
A Contact Manager
Contact management may seem like an obvious necessity to good referral marketing but you’d be surprised just how many people assume their “gmail” is the best way to manage their contacts. The best marketers keep notes and classify contacts into categories that make sense for them i.e. friends, colleagues, referral partners, clients, prospects, U.S., Canada, …..
Throwing your contacts into one e-mail list puts you at a real disadvantage.
Referral Tracking
Referral tracking is one of the most overlooked stages of the referral process. It can be relativity easy to network and find people with need professional services however, it is tracking those leads that will truly help you drive revenue. From the moment you receive a sales lead until after you have closed, you should use a tool that can help answer these fundamental questions:
Do you think the referral will result in a sale?
Did the client expect you to contact them?
Who did this referral come from?
Did the referral result in a sale?
When did you follow up with the prospect?
When was the referral sent?
Was the referral qualified?
Was the referral timely?
Reciprocity Reports
Reci…what?!! Reciprocity reports let you and your referral partners understand how you view your professional relationship. In other words, you may get a lot of business from Dave the realtor and maybe you don’t send Dave an equitable number of referrals. Perhaps, you forgot, didn’t think Dave wanted new business, or just haven’t had an opportunity. Whatever the reason, this relationship will eventually break down because it is imbalanced.
A reciprocity report asks both parties to rate their referral relationship as either “balanced”, “I should send more referrals”, or “I should receive more referrals”. If either person indicated an “imbalance” in the relationship, both parties will be made aware and encouraged to open a dialog.
Surely, you can think of at least a few professional relationships that have either become inactive or sour because either person didn’t feel the relationship with balanced.
We proudly present Fable Fridays. This weekly installment will draw parallels between referral networking and some of society’s most cherished moral tales: Aesop’s Fables.
You could go to expensive seminars and buy up every book on referral marketing, but it doesn’t take a marketing genius to realize that Aesop got it right nearly 3,000 years ago.
A father had a family of sons who were perpetually quarreling among themselves. When he failed to heal their disputes by his exhortations, he determined to give them a practical illustration of the evils of disunion; and for this purpose he one day told them to bring him a bundle of sticks.
When they had done so, he placed the bundle into the hands of each of them in succession, and ordered them to break it in pieces. They tried with all their strength, and were not able to do it.
He next opened the bundle, took the sticks separately, one by one, and again put them into his sons’ hands, upon which they broke them easily.
He then addressed them in these words: “My sons, if you are of one mind, and unite to assist each other, you will be as this bundle, uninjured by all the attempts of your enemies; but if you are divided among yourselves, you will be broken as easily as these sticks.”
“Union gives strength”
The Bundle of Small Business Leads
A small business CEO had a Sales Team, a group of IT Specialists and several Marketing Consultants who were constantly blaming each other for poor performance. When the team was unable to meet revenue expectations for the quarter, the CEO decided to teach his team a costly lesson in the power of union.
He gave his Sales Team a budget to buy expensive marketing programs, attend big-ticket seminars, and fly all over the country seeking the secret to sales success.
He gave his IT Specialists an allowance to spend on a pricey Pay-Per-Click campaign to gain ad placement by outbidding competitors twice their size.
He gave his Marketing Consultants the funds to launch an experimental social media campaign whereby a group of 10 people would be paid to blog 24 hours a day.
At the end of the quarter he gathered his team together and asked them how they had done. Neither the Sales Team, the IT Specialists, nor the Marketing Consultants were able to claim any net profit. They were unable to offset their spending and therefore unable to break last quarter’s revenue drop.
He then said, “I want each of you to write down the names and contact information of 20 professionals you know and trust; then combine your networks and figure out a way to send each professional a few qualified sales leads.”
By connecting the right service providers with the appropriate prospects, they were able to create an incredibly efficient network. They increased the quality and quantity of their inbound referrals, they had also become an integral source of revenue for others; making their word of mouth reach phenomenal.
Open ended questions are the secret sauce when it comes to good business networking. Simply asking open ended questions will do more for your networking game than a three piece suit and the best pitch on the planet.
Studies show that when people do most of the talking in a conversation they have positive feelings after the interaction.
If you’ve got the time, you can even play a game, “see how long you can keep the other person talking with as little interruption as possible.”
I was recently on the train between Boston and New York and I struck up a conversation with the gentleman sitting behind me. We seemingly had nothing in common; he may even have been busy with some paper work now that I recall. However, by using just a handful of open ended questions and showing some genuine interest, I was able to keep the conversation going for the entire three hour trip. When the train pulled into New York, which one of us do you think insisted we stay in touch?
The same goes for open ended Tweets, instant messages, and communication in all of it’s forms.
Let’s say you want to get your Twitter followers involved in a blog on your site. Instead of just announcing your blog, solicit an open ended response.
Example:
Blog Title: “Obama’s New Plan for Small Businesses”
Tweet: “How do you feel about Obama’s new plan for small businesses? [Link]”
When it comes to networking events and referral marketing, success could be as simple as having a few open ended questions on hand.
Example:
What differentiates you from some of the other professionals in your industry?
In what ways do you think your industry has changed since you started?
Ideally, what does the future look like for your business?
What is your experience with face-to-face networking events?
Customer lead generation and b2b lead generation are two different forms of referral marketing and require a slightly different approach.
Within a business network, there is usually an obligation or at least an understanding, that professionals are going to actively send each other new sales leads. When referral partners fail to reciprocate, it is completely understandable to address the imbalance in the relationship and in some cases withdraw from the relationship.
Customers have no obligation to advocate for you. While we’d like to think that if we offer top quality services our customers will promote us via word of mouth, this not necessarily the case; even for some of our most loyal customers. There are a variety of reasons why your customers may not be sending you new business. Perhaps you’re just not “top of mind”. Whatever the reason, it would be inappropriate to expect your customers to do your marketing.
This leaves you with two options. You can either ask yourself, “Why does everyone say word of mouth marketing is so important if it never works?” or you can take hold of the reigns and offer your customers an incentive to spread the word about your services.
In this economy something as simple as a Starbucks gift card could be all it takes to get people talking.
Run a promotion campaign to encourage people you know to talk about your services.
A recent study conducted by the ES Research Group, a consulting group which provides sales training and market research, has released the results of a study which evaluates the actual effectiveness social media has on closing sales.
There is endless noise and publicity surrounding online sites like LinkedIn, Facebook and Twitter. The term, “business networking” is loose at best when describing these sites and there’s been very little evidence to conclude whether or not the time spent networking on these sites creates actual sales for your small business.
ES Group interviewed 392 sales people to answer the question, “Do The New Social Media Enable B2B Selling?“. The results were surprising.
Survey recipients were then asked a single question about each of these tools — “Do these tools help you win B2B sales?” — with available responses of:
don’t use;
never helps;
rarely helps;
sometimes helps; or
often helps.
According to the study, claims that these tools “sometimes” or “often help” B2B sales were underwhelming, at best. The responses break out as follows:
LinkedIn…………………………36 percent
Hoovers and OneSource……….33 percent
Jigsaw…………………………..10 percent
Facebook…………………………8 percent
Plaxo……………………………..7 percent
Twitter……………………………4 percent
ESR’s CEO, David Stein says, “given the sales department’s ‘quick-fix’ attitude toward problem-solving, all the hype and noise around social media — in particular, mostly unproven and unstructured channels such as Twitter and Facebook — will only serve as a distraction. Stein warns of salespeople who misguidedly assume that social media empowerment means they no longer have to focus on Sales 101 — a mistaken view, not unlike perceptions of CRM in its early days, that social media is going to be ‘the savior’.”
Our Synopsis:
The term “business networking” is being redefined to accommodate people’s activity on social media sites and the sites themselves are not necessarily facilitating profitable business activities. You need to ask yourself for instance, ” Is asking everyone in your LinkedIn network to read your nephew’s resume business networking?” While we may be socializing with professionals or sharing resume’s… while we’re at work, the true test of a tool is it’s ability to help you do business.
Don’t forget the power of sales 101 basics like generating qualified sales leads through referral marketing with people you know and trust.
We proudly present Fable Fridays. This weekly installment will draw parallels between referral networking and some of society’s most cherished moral tales: Aesop’s Fables.
You could go to expensive seminars and buy up every book on referral marketing, but it doesn’t take a marketing genius to realize that Aesop got it right nearly 3,000 years ago.
One afternoon a fox was walking through the forest and spotted a bunch of grapes hanging from over a lofty branch. “Just the thing to quench my thirst,” quoth he. Taking a few steps back, the fox jumped and just missed the hanging grapes. Again the fox took a few paces back and tried to reach them but still failed.
Finally, giving up, the fox turned up his nose and said, “They’re probably sour anyway,” and proceeded to walk away.
“It’s easy to despise what you cannot have.”
The Accountant and the Bookkeeping Referral
One day the accountant received a sales lead and followed up with the prospect. “”Just the thing to fill up my schedule this tax season,” quoth he. While speaking with the prospect he learned that they were actually looking for bookkeeping services. He was unable to close a sale.
Finally, giving up, the accountant muttered, “Why did this guy call me anyways, it clearly says I do accounting on my website; not bookkeeping!”
“We often forget that sending indirect referrals today, could be the first step to a prosperous referral relationship tomorrow”
Referral marketing is not an isolated activity. Any successful networker will tell you that the opportunity to send and receive referrals happens anywhere, at anytime. Waiting around for a biweekly networking meeting or handing out business cards, is not only antiquated, it’s counter productive.
It’s easy to see how digital communication such as text messages and cell phones have added to the productivity of our businesses. Referrals are no exception.
We took Referral Key for a spin on the iPhone, the Blackberry Storm, and the LG Touch; we were quite pleased with the results. You can send, receive, track and manage your referrals anywhere in the world.
How’s that for a mechanical advantage?
You are more likely to meet new people outside the confines of your office. It is only natural that most new referral opportunities are also created outside the office. You may find yourself chatting-up your neighbor at a ball game. Wouldn’t it be nice to send a timely, trackable, sales lead to an associate who’ll be able to follow up with the prospect?
Better yet, you’re sitting on an island in the Caribbean. Don’t you want your colleagues to know they can send you leads anytime, anywhere? They’ll be confident you received the prospect’s contact information and both parties will be able to track the referral for success. That will soften the jet lag!
With the right tools and the right mentality, you’ll be exchanging a limitless amount of referrals.
Due to the popularity of our last post, “Snow White and the Seven Referral Networkers” we proudly present Fable Fridays. This weekly installment will draw parallels between referral networking and some of society’s most cherished moral tales: Aesop’s Fables.
You could go to expensive seminars and buy up every book on referral marketing, but it doesn’t take a marketing genius to realize that Aesop got it right nearly 3,000 years ago.
The Hart was once drinking from a pool and admiring the noble figure he made there. “Ah,” said he, “where can you see such noble horns as these, with such antlers! I wish I had legs more worthy to bear such a noble crown; it is a pity they are so slim and slight.” At that moment a Hunter approached and sent an arrow whistling after him. Away bounded the Hart, and soon, by the aid of his nimble legs, was nearly out of sight of the Hunter; but not noticing where he was going, he passed under some trees with branches growing low down in which his antlers were caught, so that the Hunter had time to come up. “Alas! alas!” cried the Hart:
“We often despise what is most useful to us.”
The Web Designer and the Massive Network
The web designer was browsing her LinkedIn profile and admiring the hundreds of online connections she had amassed. “Where can you see such a large network as this, with so many connections! I wish my ‘real-world’ referral partners would grow large online networks too; my attorney barely has 50 online connections.” Within a month the economy turned for the worse and her sales had dried up. Yet, because of the designer’s intimate networking relationship with her attorney, she was able to keep her head above water. One day she received a lead from a stranger on LinkedIn and she followed up. Unfortunately the lead was useless and the prospect said, “I don’t know who told you to contact us. We don’t need a website, we’ve got a LinkedIn profile with hundreds of connections.” “Alas! alas!” cried the designer.
“Stay true to your reputation, expertise, and close colleagues; everything else is ornamental.”
You can find hundreds of blogs citing examples of good networking practices, but at the risk of sounding negative, most avoid the topic of bad networkers. We thought a “G” rated movie would be the perfect vehicle to sneek past the status quo and engage a topic we all deal with now and then; bad networkers.
Below are some bad networkers you already know.
Bashful
Yeah, we all thought bashful was cute in the movie but in this article he’s a real drain on your referral marketing strategy. Bashful is not an active networker. Sure he’s a nice enough guy, if you get him alone for lunch, but the last time he sent you a referral Snow White and the Seven Dwarfs was in theaters. Bashful might make a better friend than a referral partner. Even if they are nice, there’s no room for freeloaders in your referral network.
Doc
Doc’s smart. He knows all the buzz words, he’s bought all the e-books, he has a Facebook friend list that rivals the population of China and every referral author on speed dial. He’s already Tweeted about this blog and we haven’t even finished it. Yeah, he sent you a referral just yesterday… unfortunately 50,000 of his Twitter followers got the same referral too. You don’t get points for being intoreferral marketing, you get points for doingreferral marketing. Tell Doc to go write a referral marketing book and find someone else who’s ready to play ball.
Dopey
Dopey is the opposite of Doc, he just doesn’t get it. You’ve tried to explain it 600 ways but he just doesn’t get how referral networking works. He blew $5000 last month trying to generate sales leads through a pyramid scheme. He doesn’t accept your invitations to exchange referrals, hasn’t followed up with any of the leads you’ve sent him, and probably wouldn’t think to mention you if there was a prospect standing in front of him with a megaphone, begging for the services you provide. While this guy is still looking for the “on switch” to his referral system; ditch him!
Grumpy
Grumpy claims to have a boat-load of referrals but he’s just not going to send any until he gets one from you. He’s still playing a chess game from 1983; he refuses to go first. Referral marketing isn’t poker and you don’t need to call his bluff; it’s time to call someone else.
Happy
Happy couldn’t be more different than grumpy. He views referral marketing as a holy path to nirvana. He gives self-help seminars on “referral marketing and your inner child”. He thinks that tracking referrals is wrong because he teaches that anyone who expects their professional relationships to be balanced must be evil. You’re not making sandwiches, so lose the fluff. There are more worthy charitable causes than deadbeat referral partners. It’s time to let the rubber meet the road. Let this guy “conceptualize” revenue as he gets smaller in your rear view mirror.
Sleepy
Sleepy’s referral was timely… last month. You once sent him a client in need of pediatrics but unfortunately by the time Sleepy followed up, the client needed geriatrics. Besides, Sleepy gets Grumpy if you interrupt his siesta. It’s time to kick Sleepy off the couch and tell him to go home.
Sneezy
Sneezy is a good sport but his reputation is a little under the weather. He can put his business card in your pocket from forty feet away but what you’ll really need is a tissue to soak up your client’s tears after they experience the quality of his work. Don’t worry about Sneezy, he just doesn’t see the value in repeat business. It’s time to quarantine this referral relationship.
Do you think Walt could have foreseen the terrible networkers he had created?
Mirror mirror on the wall. Who’s the most referrable of them all?
We all want to generate new business. Networking events, tradeshows, books, and advertising are all time consuming (and expensive) ways of generating sales. If you haven’t had the pleasure of taking a collegiate marketing class then here’s a tip; “Start Growing your Business from your Current Base of Satisfied Clients”
Marketing 101 tells us that referral marketing within your current base of satisfied clients is a strategy that is extremely rewarding for professionals who do good work. In other words, if you’ve sacrificed quality for high turn over, then this article isn’t for you.
It takes a lot of time and energy to to find new clients but if you’re confident in the quality of your work, then you may have a team of marketers and not even know it. Customer lead generation is all about positive word of mouth promotion.
Don’t sit back and wait for the phone to ring. Perhaps your service isn’t as buzz worthy as the latest Hollywood flick but a little encouragement could be the key. Every small business needs leads; if you haven’t tried actively leveraging your current client base then why not give it a shot?
Here are some examples:
1. My accountant Dave had a few cancellations and he’s looking for a new clients to ensure this tax season is as profitable as the last.
He’s currently running a promotional campaign with about 50 of his past clients. He’s offering them dinner for two at Legal Seafoods for every sale they send him.
Did it work?
Dave’s already filled his schedule to the brim and now he’s passing on some of the leads to other accountants he knows. This good karma will ensure Dave has plenty of referral sources to rely on next season.
2. Lauren, a mortgage broker, works in an office adjacent to mine. She’s looking for real estate agent referrals to pass on to her associate who’s been sending her quite a bit of business this quarter. What’s interesting is that she’s actually running a promotion campaign to find leads for her colleagues, not herself. She knows that many of her past clients may be interested in realty services. Couple that with a juicy incentive and Lauren’s been able to balance quite a number of profitable referral relationships with a diverse group of realtors.
3. Warren is a computer repair/networking guy we know and he’s one of the best in the city. He also happens to know the power of a morning coffee. In this economy many of us are even second guessing that morning cup of designer coffee. Warren has a customer base of several hundred. If they send Warren new business, he’ll send them a $10 gift card to Starbucks. This is an example of a great word of mouth marketing strategy and it certainly wouldn’t be possible by sending stationary or joining an expensive business network.
The truth is that no two professionals have the same exact approach to B2B lead generation. Inevitably, some professionals place a much higher priority on business networking than others. If we were all very honest with ourselves we’d probably come to the conclusion that we have quite a few relationships that are less than balanced. Either you are working hard to ensure the success of a colleague or someone is working very hard to help you; and the effort isn’t mutual. We often avoid confronting imbalanced relationships because it can be uncomfortable and easier to just ignore. We pose the hypothetical situation:
David is a property inspector with his own practice. For David, it’s all about business lead generation. He generates most of his new sales leads through his close referral relationships with talented local Realtors. Part of David’s key to success is his ability to actively seek out qualified prospects which he then sends to his Realtor associates. David often has to make difficult decisions as to who he’ll send new referrals to. He takes several factors into consideration such as the client’s specific needs, the Realtor’s area of expertise, and the Realtor’s ability to return the favor.
David met a Realtor named Kevin at a networking event. They quickly built a good rapport and agreed to send each other new business. Over the past three months David has sent Kevin six timely sales leads and Kevin has sent David one; the client Kevin referred isn’t even looking for a property inspector.
Now the easy way out is to say, “Well, he’s making a nice gesture towards Kevin and that should be enough.” But like anything, the reality is that there’s always a give and take. Every nonreciprocating lead David has sent Kevin, has been a missed opportunity to help a different Realtor. For example, Deborah just opened her own firm and she’s hungry for new prospects. She needs the business and is eager to do whatever it takes to make sure David is taken care of too. His other associate Susan is getting close to retirement and is recognized as one of the most experienced Realtors in the area.Susan advocates for professionals she believes in and having Susan’s blessing could be very powerful. She doesn’t have the energy to chase down every name that crosses her desk but she would appreciate a few solid sales leads from David.
We often associate referral marketing with sales leads and generating new business. While referral marketing is the best way to boost your sales, you’d be wise to think of how the same relationship based approach can be applied to the hiring process. Assuming you don’t have a dedicated HR department, small business owners often rely on a passing gut instinct; with varying results.
Here is just one example of how you can take a referral approach to finding good talent. Let’s say your law firm has recently taken on a number of new cases, because of the increase in volume of work, you need to find reliable clerical support. This is a good example of when it is beneficial to have similar businesses, which you may even view as competitors, in your business referral network. For a variety of reasons, the law office that your referral partner owns can probably refer you to the right people or at least, generate some word of mouth that you have an opening.
“It is necessary to add some structure to an employee-referral program, communicate the benefits to employees, track the success of referred candidates, reward successful referrals and discourage low-quality referrals.”
If you’ve ever hired someone then you know that it’s a huge waste of time to take on a person who either can’t get the job done or is not fully committed to the task. You can find an endless number of prospects in the classifieds, Craigslist, or job posting sites. In this economy, you’re likely to be overwhelmed with responses. To ensure that you will end with that one-in-a-million candidate, don’t play a numbers game, use qualified referrals from people you know and trust.
Tax season is in full swing and that means referrals are more important than ever.
There have been many changes in the tax legislation this year and the topsy-turvy economy means that the difference between finding an accountant, and finding the “right” accountant, is that much more important. Find accountants that others refer to you.
Most state agencies and watch-groups agree that having friends, family, or a colleague refer you to the right accountant is the way to go. The consequence for haphazardly hiring an accountant can range from mediocre service to malpractice.
“Get referrals from your financial institution, attorney, family or friends.” Nashville Business Journal
If you’re a small business owner tax season means you have a few weeks left to send some business referrals to your trusted accountant. You can be certain that your accountant will have plenty of time to think about returning the favor; after April
And if you’re seeking your own personal accountant, then be smart about where you look. Avoid decisions based on advertisements. Literally, anyone can print up an ad but not just anyone can build an enduring reputation for quality work.
“Initially family, friends and associates can be a reliable source…”
Eric Taylor, Helium
If you don’t know any good accountants, you may want to check a business directory. Look for peer and client reviews. Avoid “pay to list” directories as any accountant with a few dollars can pay to be on a list, thus it is an advertisement and not a referral.
Over the last couple of months, we’ve seen a number young small business owners join Referral Key.
We often don’t think of high schoolers or even college students as being small business owners but you’d be surprised just how entrepreneurial and motivated the younger generation is. At a time when unemployed professionals are taking jobs that in more prosperous times, would have gone to young adults; many young adults are forced to think outside the box.
Lawn mowing, caddying, snow shoveling, dock-hands, and even web design are just a few referral based jobs that require good word-of-mouth and very little capital.
Young adults, who take an entrepreneurial approach to their financial future, may be walking away with more than just a little spending money. They are learning the fundamentals of good business; relationship building, developing a reputation, and following through.
Good referral marketing practices are likely to help you throughout life whether your landing the biggest contract of your life or carrying a second bag to the green.
Dave O’brien has been an accountant for over 40 years. In that time, he’s worked with many top firms including KPMG Peat Marwick (Now KPMG) in Boston and Isner & Lubner in New York City. Currently, Dave specializes in taxes. Given his expertise, as well as a very important tax season, he finds no shortage of freelance work.
Throughout your forty year career as an accountant, what strategy has helped you generate new business?
Word of mouth… all referral based. The accounting business was strictly referral business.
Where did you meet your connections and referral partners?
I tried several networking groups over the years. At one point, we even started our own meet up group. We had an insurance guy, an attorney and so forth. It was a great idea but eventually the group broke down due to our busy schedules. It was very difficult to get everyone at the meetings.
I wish I had a tool like Referral Key thirty years ago.
How have you helped build your reputation over the years?
Its about recognizing your strengths and referring clients to the right people whenever possible. I worked with a lot of new businesses and clients looking to incorporate. I would send them to the right people because I knew that my reputation and the possibility for a long term relationship, were contingent on my associate’s ability to provide the clients I was referring to them, with the best possible service.
I would refer them to lawyers that could best serve the clients and their needs, not the lawyer. When I first started, there were a lot of lawyers that would help you incorporate but only authorize a limited amount of shares in small increments. This would allow them to accrue more fees over time because inevitably, the business owner would be interested in acquiring more shares.
I would also send the same clients to banks that were receptive to their needs, not a bank that would be unresponsive when the client needed a new loan a few months down line.
Can you think of any bad referrals that stand out?
Ha ha ha… yes, the client didn’t pay.
What is the most important advice you could give an accountant who’s just starting out?
Get out there and build strong relationships. That’s the key. Also, to avoid situation where client’s don’t pay you for your services, you should check with their previous accountant to ensure you’re dealing with the right people.
It’s simply not enough to say “I want referrals”; great, so do millions of other small business professionals. As with most things, successful lead generation requires a little bit of planning and tact.
Below I’ve outlined a simple strategy using my own fictitious network.
For this example I’m a marketing consultant (Because I am). I exchange referrals with many small business owners but here is just a small sample of some key players I’d like to add to my network this week.
Harold H.
Industry: Law
Connection: Harold works in the same office building as me. We’ve known each other for years but haven’t formalized a referral relationship… it’s long overdue.
Challenge: Harold is an older professional, very pragmatic and set in his ways. He’s a snail mail kind of guy and never really viewed his professional relationships as a source of new business. He spends a lot of money on outbound marketing and is a bit frustrated with his ROI as of late. Never the less, he’s a talented attorney and the sheer quality of his work alone makes him a candidate for my referral network.
Strategy: Between our brief conversations in the lobby over the years and the fact that an entrepreneur friend of mine was pleased with his work; I’m comfortable with sending Harold a few qualified leads and I know that he works with quite a few small business that could use my services too. I set a date to do lunch and follow through. At lunch, I explain to Harold that I am eager to send him new clients if he’d keep me in mind when he comes across clients who may need my marketing services. I tell him to expect a formal email invitation to join my referral network. It doesn’t end there; after lunch I immediately send Harold an invite and proactively seek to secure him a referral as soon as possible. Setting the rhythm early on will keep expectations high and revenue flowing.
Denise R.
Industry: Graphic Design
Connection: A past client of mine had a website done. During one of our appointments they shared their website and I was really impressed; she is talented.
Challenge: While talented, Denise is young and I don’t want her to confuse referral networking with loose social networking. If I am going to be sending her qualified sales leads I don’t just want a smiley face on my Facebook profile in return.
Strategy: Denise designs websites for businesses obviously looking to increase their presence. I help market those websites. This could become a very profitable relationship and one that’d be foolish to overlook. I call up Denise and explain our connection. I probe her to figure out what she already knows about referral networking and of course I fill in the gaps. I ask to see some more samples of her work to determine if the quality of her services are on par. I follow up with Denise and explain my intentions and why we should be taking advantage of our unique situation. I make my expectations very clear. If she’s up to it, I invite her to join my referral network and hopefully I can send her a lead within the following few days. I want to set a good example so I make an extra effort to not only send her quality leads but to take good care of any client she sends my way. With a little bit of diligence, this could easily blossom into a very profitable long term relationship for both of us.
James L.
Industry: Accounting
Connection: Jim is a friend of a friend. Jim is also a slick talking networker, about as good of a salesman as he is an accountant.
Challenge: Jim talks the talk and while many people can testify to the quality of his work, I don’t want to get lost in the shuffle. I’ve got an accountant named Dave who also does good work and I want to let Jim know that the leads I send him are very valuable and I expect the relationship to be a two-way street.
Strategy: Because of his reputation for top-notch services and his powerful connections, Jim could be a very critical player to have in my referral network. I’ll want to have a one on one conversation with Jim and tell him that I am serious about exchanging referrals. I will also want to remind Jim that I will be tracking our referral relationship through Referral Key and phrase it in such a way that I want to ensure I send him an equitable amount new business. It will be very important that I utilize referral tracking reports to keep this relationship balanced and profitable for both Jim and I.
A recent case study by Cambridge based online marketing consultants HubSpot, revealed a 230% increase in traffic leads to the online referral network, Referral Key.
This exciting news is important for two reasons.
First and most importantly, it tells us that small business owners are thriving. They’re driving more sales by banning together and taking a proactive approach to exchanging qualified sales leads. Members can track these numbers right from their Referral Key homepage. Yet, these aren’t figures you’re likely to see on the evening news. And while the talking heads churn out report after report of massive layoffs and corporate failings, you aren’t going to see any figures about the solid sales leads so many talented small business owners have been able to generate in the face of naysayers and pessimists.
Second, Referrals Key’s own growth is indicative of the power of a relationship based growth strategy. Whether it’s working with HubSpot to offer up useful content to the community as well search engines or it’s working with its members night and day to individually teach each members how to really take advantage of this tool, it’s all about reciprocal behavior.
Everyone wins this wins when we exchange referrals!
At a recent networking event I found myself engaged in an exciting conversation about best networking practices. I had briefly touched upon Referral Key’s ability to allow professionals to track their referral relationships for reciprocity. There were several accountants, realtors, amongst others who were intrigued by the idea; they seemed eager to learn about referral tracking.
Shortly after finishing my sentence, a man, who I believe may have been a small business coach, said “We don’t do that here!” Puzzled, I replied, “What is it that you don’t do?” The man seemed a bit unnerved when he followed up, “We don’t keep score, good business networking is about helping others out because you want to, not because you’ll get something in return.”
As seemingly innocent as his interjection was, it didn’t sit right with me. As a whole his philosophy seemed very detrimental to a small business’s growth, as it overlooked the most important premise of referral marketing. Charity is not a substitute for mutually beneficial business practices. In fact, a “don’t expect anything in return” goes against the fundamental rules of good economics. This is why I decided to come up with a short list of important reasons why small business professionals should keep score of every referral they send and receive.
1. Identify your strengths
Who have you been sending new business to? Has all of your new business leads been going to one industry within your network (i.e. graphic designers)? If so, is there a way you can leverage your “design” leads to help out other professionals in your network? Perhaps ask the recipients of your “design” leads to send you customers looking for photography work. You can then pass those leads on to a photographer in your network and further develop trust.
2. Identify your weaknesses
Your colleague with the loudest pitch or the heaviest handshake may not necessarily be your best source of new business. For instance, having two accountants in your network, one of which is your good friend but never sends you business, the other is a bit distant but is always sending you new leads, it would be foolish to constantly send your friend new business and ignore your colleague who always looks out for you.
3. Are you better off than you were last quarter?
The mind is a funny thing. We often think of our own success in a compartmentalized immediacy. When you ask yourself the question, “Professionally, am I better off than I was last year?” don’t let this morning’s coffee spill or successful sales call influence your assessment. Use quantitative data to really get an idea of where you’ve been, where you are, and where you’re going.
Not keeping score for the sake of altruism is ultimately a copout… bad business for you and your network.
Seasoned small business blogger and author of “Good Plum” Eliott Kosmicki, says it best in his recent post The Secret to Winning Online, or Anywhere, “It’s not always fair to get down on yourself if you miss a writing appointment or don’t get through as many sales calls as you planned. However, if you have your game plan set - you’ll be able to keep score easier, knowing if you lost a day or won a day.
At the end of a week or month, you’ll have a clear idea of where your weak spots are and can adjust to get better.”
In a perfect world, we would provide our service to a client and assuming we did a good job, that person would start telling their colleagues and all we would need to do is sit back and let the referral business roll in. The reality is that effective referral networking requires a two pronged approach. First we need to exchange referrals with professionals and customers who already know us and are familiar with the quality of our work; a tool like Referral Key helps track and manage those referrals. Second, we must build relationships via an open dialog with those who are not comfortable with us yet.
To this end, it is important that we build an ongoing communication stream with the people we want to recommend us. This serves multiple purposes; it reminds them that we are an expert in our field who is willing to share that expertise with them and it keeps us “top of mind” so that when an opportunity to refer comes up, they remember us. There are a number of ways to build these types of relationships (in-person meetings, webinars, direct mail, etc.) but the most efficient is via an Email Newsletter sent through a service that creates a professional-looking message that is trackable. These newsletters can be short – no more than a paragraph or two – but as long as they are providing valuable content to the recipient, they meet the dual objective of confirming your expertise and staying in touch with potential referrers. When thinking about newsletter content, always try to make sure that after reading it, your recipients will either feel “smarter” or “cooler” than they did before. If instead, your recipients will feel like they just endured a long sales pitch, start over again.
A real-life example of how this works is a Human Resources consultant who sends out a few sentences in her monthly newsletter regarding issues relevant to Human Resources personnel. Within a few hours of sending the newsletter, her phone rings and she gets business either from one of her recipients or someone that received a forwarded copy of it. Many times, the business has nothing to do with the content of her newsletter but is a result of her sending useful information and building relationships through regular communication.
Building relationships through a dialog with your current clients and members of your business network is crucial to generating referrals – and it is easy to get started. Share your expertise and you will be on your way to building your referral network.
Whether you’re using a referral system like Referral Key to drive revenue to your small business or you’re using corporate-support on Linked In to get your resume out there, business networking sites are indispensable tools for the modern professional. Once you’ve established yourself on a business networking site, it can be timely and difficult to make changes to your “virtual reputation”, so the best strategy may be to start-off with a game plan.
It may seem trivial but when joining a business networking website ask this simple question, “What is my overall goal in networking?” Not all networking produces the same results therefore, not every approach should be the same either. We all network for a wide variety of reasons. Let’s take a look at some major networking stereotypes.
1. The Newbie - Some network online as a form of entertainment, chatting with strangers and spying on estranged colleague’s profile-pages to fill the gaps in their day. These people like to think of themselves as riding the wave of new social trends however, there is very little expectation for real-world benefits from their endeavors. These people make up the bulk of online networkers. The effort is minimal therefore, the expectations should be too. To achieve this level of networking one merely needs to sign-up and start browsing.
2. Professional-Professional Networkers- Then there are others who actively, share, discuss, and contribute to networking sites. These networkers are the heart and soul of the website, often playing important roles such as group leaders, forum moderators, and content creation. These people’s true reward for networking is in the act itself. In the virtual world they’re king however, if you find yourself asking the question, “They are on this site all day, how do they get any work done?” the answer may simply be that “they don’t”. As exciting as technology is, we haven’t been able to add more hours to the day. That means spend two hours networking online and something’s got to give… hopefully it’s not your business.
3. The 500’s – Know what it’s like to have 500 close friends? I don’t think anybody does either but some use business networking sites to develop a contact list that rivals the phonebook. These networkers will add just about anybody to their network, from the CEO of a company they’ve never heard of to their high school sweetheart’s former dog –walker. The reality is that just because it says you are friends with someone on a webpage doesn’t mean you have any juice. In fact, having so many contacts could make you a less effective networker. If I am looking for legal advice and I contact “Larry” and tell him I am your acquaintance and he says, “Who the hell is that?”, I might be better off knocking on doors than consulting your massive network. If having a massive contact list is your goal, grab some Joe and start clicking.
4. The Promoter- Just like the 500, the Promoter has a huge cache of connections. Unfortunately, if you happen to be one of these damned connections, you mind as well make friends with a billboard. The Promoter will use any free space to shamelessly advertise everything from their resume to their cousin’s real estate listings. They often clutter your homepage and inbox with poorly constructed messages like, “Hey, how have you been? By the way, did you know that Dubai is one of the fastest growing real estate markets..”. I think you get the point.
While some may partially embody several or some of these stereotypes, none of these strategies really add value to your small business.
The key to getting good results is to decide early-on what it is that you want. If you are counting on timely and qualified referrals to help you generate new business, don’t start a resume pool. Develop a strong referral network of a few dozen small business professionals you actually know. Give them a call and let them know what your intention is. After you’ve developed the proper infrastructure, you can then go onto a business networking website and use technology to maximize the effectiveness of your efforts. If giving your contacts a call beforehand seems like too much work or it feels unnatural then they probably shouldn’t be in your network to begin with.
We all understand that online networking can be incredibly powerful. But like most endeavors, there is only a very small subset of people who actually know how to unlock the full potential of these technologies. They understand the Golden Rule of online networking, “Exchange qualified and timely referrals with professionals who know and trust you, and you will drive revenue.”
Online networking cannot replace the time-honored strategy of developing a tight-knit real-world network as much as the telephone did not replace good conversation.
Only mortgage brokers with the highest ethics and best track-record are likely to attract clients these days. Many associate the current economic calamity as a direct result of predatory lending. The fact is that no matter where you place the blame, borrowers are much more cautious about where they get their loans from and the lending industry is likely to change forever. Many states already have new legislation in the works that will hold mortgage brokers to the same “client-first” standards as many other service professionals i.e. lawyers, financial planners and real estate agents.
According to MSNBC, “While mortgage regulations vary dramatically from one state to another, the new system creates a uniform application for mortgage brokers and a database that banking regulators, and eventually consumers, can use to track down brokers who try to work in one state after being banned from another. Consumers should have access by next year.”
Putting your clients first has always paid off in the referral networking world. Part of maintaining a strong referral network lies in understanding that no single sale is an isolated transaction. This means, sell someone a bad loan to make a quick buck and you’ve seriously injured your relationship with both your client and the associate who referred that client to you.
If you are a potential client looking for mortgage referrals or you’re a professional looking for a broker to exchange referrals with, do your homework. Testimonials and recommendations are reasonable expectations before perusing any professional relationship. You can find many peer and customer rated mortgage brokers in the small business directory on referralkey.com.
Unfortunately, Webster’s Dictionary hasn’t caught up to the small business world quite yet, but it sure would be nice to have a working definition of a ‘qualified prospect’. In a world saturated with Craigslist postings, friend requests, and e-mail lists: it is important to be able to distinguish between a qualified sales lead and an unqualified sales lead.
One of the easiest ways to differentiate from the two is to pose this simple question: Do I have a clear advantage over any other professional who may be trying to court a particular prospect? You can apply this formula in nearly every referral marketing situation. For example, Tracey, a web designer who is looking for new business pays to post dozens of ads on Craigslist. Jim, a restaurant owner is browsing Craigslist and is possibly interested in creating a relationship with a web designer to help create and maintain his restaurant’s website. Now let’s pose the question: Does Tracey have a distinct advantage over any of her competitors when it comes to Jim’s decision? …The answer is absolutely not!
Tracey’s firm is competing with thousands of other firms, both locally and nationally, who can just as easily post a picture on Craigslist. Jim may do a bit of browsing, but he is likely to become overwhelmed with the hundreds of seemingly identical options. Pursuing unqualified sales prospects forces you to cast your net extremely wide and expend a tremendous amount of effort in the hopes that you’ll entice a stranger to give you a call. To be blunt, when was the last time you hired a service professional based on a Craigslist ad, cold call, or a classified?
Suppose Tracey has a good relationship with her accountant named David. She knows that David works with quite a number of local businesses including restaurants. Tracey calls to touch base with David and also takes the opportunity to remind David that he may have a few clients that could use her design services. Later that afternoon, David is on the phone with one of his clients, Jim who happens to be opening a new restaurant. Through some tactful networking, David discovers that Jim will need to establish a website in the near future. Of course, David will want to send Jim’s contact information to Tracey immediately using Referral Key.
Does Tracey have a distinct advantage over her competitors? …The answer is absolutely yes! There’s accountability all around. Jim trusts David’s advice and David is familiar with the quality of Tracey’s work. Jim is focused on running a successful restaurant. He doesn’t have the time to follow up with dozens of Craigslist responses and he certainly doesn’t have time to play phone-tag with an unqualified web designer. Or worse a web designer based out of his basement in Aruba who hasn’t returned his phone calls in a month since Jim’s last payment.
The bottom line is if Tracey immediately follows up with Jim, she is almost guaranteed to close the sale. Jim is an example of an extremely qualified prospect. This polarizes the clear difference between the effectiveness of a strong business referral network and blanketing Craigslist with your pitch.
Select a Cash Bounty Amount
Consider setting up a Cash Bounty that you'd be willing to pay to people who send you new business. It's free to setup and you control whether to issue the cash.
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At a recent networking event I found myself engaged in an exciting conversation about best networking practices. I had briefly touched upon Referral Key’s ability to allow professionals to track their referral relationships for reciprocity. There were several accountants, realtors, amongst others who were intrigued by the idea; they seemed eager to learn about referral tracking.
