Monday, June 27, 2011

Business Referrals: How to Dig a Well

If you're an entrepreneur, you know how important referrals are.

Among the thousands of small business owners I've met over the years, referrals are usually their #1 source of new business, bringing in anywhere from 50% to 100% of revenue.

Dozens of excellent books have been written on referrals, and I've read most of them.

But I want to share a new idea (for me) on referrals and networking that I learned last week in a seminar led by Jim Bear

Here's the idea: Stop going after glasses of water (single referrals) and start digging wells (referral partnerships).

Let me explain ...

According to Bear, average networkers ask for referrals. Master networkers ask for referral partners

What's the difference? It's huge ...

Let's say an average networker asks for one referral to a new client every week; about 4-5 every month. With a closing ratio of 50%, in a year they get 26 new clients.

That's good.

Now let's say a master networker asks for introductions to a specific referral partner every week; about 4-5 every month. With a closing ratio of 50%, they get 26 new partnerships in a year. However, each referral partner sends 4 new clients every year to the master networker, which works out to 104 new clients.

That's better.

What does a referral partnership look like?

Think of an orthodontist. How does s/he typically get new patients? Through referrals from a dentist, who sees kids before they need braces.

Dr. Cindy the dentist typically tells a parent, "Your child needs braces. I recommend you see Dr. Bob the orthodontist down the hall. I send all my patients to him." The parent thanks Dr. Cindy for the referral, and will almost certainly give their business to Dr. Bob.

Hint: You want to be in Dr. Bob's position -- with referral partners sending you qualified prospects.

Action Step: Start asking for introductions to people who see your clients before you do. All you need are a half dozen solid referral partnerships to fill your calendar with qualified prospects.

Of course, you must find a way to reciprocate, or the referral partnership falls apart.

If you can't send business back directly to your referral partner, find somebody else who can. That way, everybody wins.

Example: Dr. Bob the orthodontist can't send new patients to Dr. Cindy the dentist. But he can set up partnerships with real estate agents (whose clients need help finding a dentist), the pediatrician (who sees babies before they have teeth), and others.

All it takes is a little imagination and effort. The rewards -- in the form of never-ending revenues from referral partners -- are worth it.

You'll find more ideas like these in my Free Report, Guaranteed Marketing.

1 comment:

  1. Excellent thought process on thinking bigger about referrals!
    Thanks for the insight :0)