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5 Tips for a Reciprocal Referral System
By Stuart Ayling
The idea of having a reciprocal referral system is very popular. Everyone wants referrals. And setting up a referral system with a business that serves the same clients as you do is a great idea.
But it’s not always easy.
And sometimes the results are poor. Lots of effort and few referrals.
Follow these tips to create an effective reciprocal referral system.
(1) Choose carefully.
Make sure your referral partner is a good fit to send suitable prospects your way.
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Do they serve a similar type of client?
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Do they have similar values?
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Are they geographically convenient?
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Do they have a communication channel to their clients (e.g. newsletter)?
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Do they have the volume of enquiries/clients to make it feasible for you?
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Will they commit to making it happen?
Equally, make sure you are in a position to refer back to them. The alliance is meant to be a two-way relationship. If there is an imbalance in potential for referrals by one party discuss it up front to clarify interests and expectations for everyone involved.
(2) Educate your referral partner.
People will only make referrals to you when they know, like, trust and understand what you do. You must help them understand 'how' you help clients. Schedule a meeting with them and explain in detail the process you use. Give examples of what clients experience with you. Clarify how you would handle any referrals from them. Idea: provide a simple step-by-step guide to making referrals.
(3) Develop a shared action plan.
What will be done by both parties to make the referral system a success? Be specific about including information in newsletters, invitations to events (either individual or as joint events), and client networking opportunities. Documenting this commitment is a good idea. But you don’t need a fancy agreement. It’s more about confirming intent from both parties than creating a binding legal document.
Importantly, this document can be used as the basis for your regular review (see tip #5).
(4) Provide material to be sent to the partners clients.
Creating a regular flow of information to your referral partners clients is a key component of an effective reciprocal referral system. You may need to create special information that will suit the communications opportunities provided by your referral partner.
Examples include: articles for their newsletter and website; educational tips sheets; updates on changes in your industry and how that might affect them; handouts at seminars or events.
(5) Follow up and meet regularly to review progress.
It is important to maintain a regular review of referrals and actions taken by each party. Don’t leave things ‘under the carpet’ that really need to be discussed. Be professional and treat the alliance on a business basis, addressing the problems or challenges, without criticising the person. Plan ahead to keep the relationship alive. Stagnation and inaction are the enemies.
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