As a business owner one strategy to consider in growing your business is to create a business referral network with other companies that service your local markets. This network can be built with local business leaders in your area. Most referral networks will include a handful of companies that do not directly compete, but complement one another. If you create the right referral network then you won’t have to pay out referral fees to companies that send you a lead because the payment you’ll provide will be the next new lead you send them. This type of customer sharing can be very valuable as long as everyone involved participants and helps feed the network by sending new leads to one another. When one company only accepts leads and doesn’t add new customers to the pool, it will fall apart.
Example of Business Referral Networks
An example of a typical business referral network that most small business owners have seen in action is the relationships that are often developed between business lawyers and CPAs. While both service the same set of customers they don’t provide the same type of service and they don’t make referral revenue from making introductions. Another form of a business referral network that is very successful is in the home construction and repair industry such as plumbers, electricians, general contractors etc. When on the job they often see problems that need attention but are outside the scope of the service they provide, therefore they can refer the business to their network of home construction professionals who can service the needs of the customer.
Build a Business Ecosystem
It is important as a small business owner that you attend business functions that are both focused on your industry as well as business practices in general. These types of networking opportunities will allow you to meet other professionals that may have customers in need of your product or service. While it can take some time to develop the types of relationships needed to receive referrals from a business network, the value of the leads over the course of several years will be well worth the time and energy you’ll invest. One of the best strategies for getting referrals from a business network is to make connections and start feeding it with new leads.
While you may not get any new business immediately, if you represent yourself as someone who can deliver quality leads, eventually you’ll be on the receiving end. If no business comes through from a specific contact then move on and start sharing leads elsewhere. Over time you’ll develop a referral network that is reliable and committed to helping everyone grow their business.
Put in the time to build a business referral network with the right types of businesses and you will reap the rewards for a long time to come. Every business will have to evaluate the right types of connections that make sense for their company, therefore all business referral networks will not look the same, but the core idea is the same. A group of business owners committed to supporting each other and sharing quality leads.
Christian Fea is CEO of Synertegic, Inc. A Joint Venture Marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.
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