Three Referral Marketing Types
One of the key areas I recommend for any small business to review immediately is whether or not, there is an established referral system. It’s also important to have more than one referral partner to keep your business stable with multiple sources of opportunities. If you don’t have referral partners yet, then networking can help you connect to those individuals. It takes time to develop referral partners, but it is a worthwhile strategy for growth and stability. Therefore, I reviewed “Sue Clement’s Success Formula for How to Get More Referrals” and here is a summary below.
Developing an effective referral strategy takes time, but can make a huge difference for your business. Your referral strategy should not be one where you have to chase clients month to month for more business. A system needs to be in place in order to consistently receive high quality referrals. We need to shift away from looking for prospective clients in the short-term and start developing long-term relationships with referral partners.
The first step is to understand the difference between a referral source and a referral partner. A referral source is anyone who sends you prospective clients. These are often random referrals without consistency, and are not necessarily of the best quality. A referral partner has the INTENTIONALITY of helping your business and is a formalized source of receiving referrals. Seeking referral partners is a good start towards receiving warm referrals in a consistent manner. There are three different types of referral partners:
1. Reciprocal Referral Partners
In order for both parties to benefit with equitable referrals, each partner must have the same opportunity for sending referrals and must be non-competing industries. For example, realtors partnering with mortgage brokers, interior decorators with artists, or IT consulting, such as PCIS with IT vendors, such as IBM, Microsoft, BlackBerry and Bell.
2. Ambassador Referral Partners
In this type of relationship, the partners do not have similar expectations of receiving equitable referrals. The “Ambassador” partner is expected to send referrals over to the other partner, but does not expect as many (or any) referrals in return. The partner who sends referrals is usually a hub or centre of influence that comes in contact with a lot of people within a specific target market that fits with the receiving business. For example, a hair-dresser can be a great Ambassador Referral Partner for a Beauty Salon if they see and talk everyday to clients who would be ideal for manicure or pedicure services.
3. Client Referral Partners
Your own clients, especially your “raving fans”, can be an excellent source of endorsement for your business. The key to an effective client referral partnership is to develop a system that is “top of mind” and encourages collaborative effort from your existing or past clients. Think about what you need to do differently to get your clients to refer you business. Do you keep in touch with your clients by inviting them out for lunches? Do you use email newsletters to keep your clients up-to-date? Do you reward them with a gift card or some other form of recognition for their referrals?
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