business referrals Archives - Dr. Ivan Misner®
building deep referral relationships

Get More Out of Networking by Building Deep Referral Relationships

To become successful at networking, you need to be building deep referral relationships. Many people rely on referrals from others as a primary source of business. However, not everyone who relies on referrals is successful.

Many people have surface-level referral relationships.  They know just enough about a referral source’s business to get by. They probably could not tell you anything else about the business than you can read on their business card. They have not built enough social capital with their referral relationships to count on them when they need something.

Building deep referral relationships is almost completely dependent upon the social capital you have built with someone. Social capital is like financial capital. To amass financial capital, you have to invest and grow your assets. You have to have money in the bank before you can make a withdrawal.

Building Social Capital Is the Groundwork for Future Payoff

In this video, I discuss why Building Social Capital is one of the best investments you can make to secure future success for yourself and others with whom you network.

 

Do you have a personal story about social capital similar to the one I shared in this video about Alex? Please share your story in the comments below about how you have built great social capital with someone who is now just itching to help you in any way they can.

Are You Building Deep Referral Relationships?

Before you ask for a referral, make sure you have built a deep referral relationship first by knowing the following points about that person:

  • You believe they are an expert at what they do.
  • You trust them to do a great job and take great care of your referred prospects.
  • You have known each other for at least one year.
  • You understand at least three major products or services within their business and feel comfortable explaining them to others.
  • You know the names of their family members and have met them personally.
  • You have both asked each other how you can help grow your respective businesses.
  • You know at least five of their goals for the year, including personal and business goals.
  • You could call them at 9 p.m. if you needed anything.
  • You would not feel awkward asking them for help with either a personal or business challenge.
  • You enjoy the time you spend together.
  • You have regular appointments scheduled, both business and personal.
  • You enjoy seeing them achieve further success.
  • They are “top of mind” regularly.
  • You have open, honest talks about how you can help each other further.

Referral Relationships Reality Review:

  1. What conclusions do you have about the depth of your current referral relationships?
  2. Are your relationships more or less in line with these points?
  3. What points can you improve upon to deepen your relationships?

Over the years, people have asked me to promote something for them.  It happens to me almost daily on LinkedIn. Now, I don’t want to pick on LinkedIn.  It can happen on any social media platform. The majority of those who contact me have never actually met me or had a previous conversation with me. They never invested in the relationship, yet they wanted a withdrawal from it. Please stop and do not pitch to me (or anyone) on LinkedIn.

You may be shocked at the level of personal knowledge required for building deep referral relationships. I completely disagree if you believe that referrals should be all about business. Referrals are personal. It takes a lot to develop this type of relationship. When you give a referral, you give a little of your reputation away. You need to know the person that is going to affect your reputation but those who do will certainly succeed at building a business from referrals.

receive referrals

How long does it take for people to receive referrals from their network?

From my experience, strong referral relationships are a lot like building close personal friendships. It takes time for people to become close enough to receive referrals from their network. Facebook has redefined what a “friend” is, but I’m talking about truly close friendships with people. In a study published in 2018 by the Journal of Social and Personal Relationships, it was found that it takes about 50 hours of interaction to move from being an acquaintance to becoming a “casual friend.” It takes a total of 90 hours to be become “real friends,” and a total of 200 hours to become “close friends.” According to the study, “friendship status was examined as a function of hours together, shared activities and everyday talk.”

So, how long does it take for people to build a close relationship where they trust you enough to give you regular referrals?

So, you want referrals and you want them now?  Well, you can’t have them. Unless you’ve built meaningful relationships with your referral partners first. Well, it takes somewhere between 90 and 200 hours for people to receive referrals from their network.

I know that 90 – 200 hours sounds like a lot but that matches up almost perfectly with what I’ve seen in BNI. When BNI members hit the 90-hour mark of participation they almost always begin receiving more and more referrals. Based on an independent study published in 2012 for BNI, when those same individuals cross the 200-hour mark, they generate an average of over five times the number of referrals they did in their first year! Yes, you read that right: more than 500% more referrals when they have built strong friendships with their referral partners.

The Steps You Should Take If You Want to Build Business Off Referrals

Ask yourself the following four questions until you have attained success and the answers become obvious.

2. Am I regularly making stimulating, educational presentations to my fellow networkers about the value I provide to my clients?

3. Am I doing business with others in my network so I can give them dynamic testimonials and steer business to them in hopes they will return the favor?

4. Am I meeting regularly with my networking colleagues to learn about their businesses so I can confidently refer my contacts to them?

If you’re following these simple tactics, then you are well along the road to getting all the referrals from others’ networks that you deserve. Building a referral-based business is all about building a powerful, personal network. If your network is a mile wide and an inch deep, you will never get the kind of referrals that will make a difference for your business. This means that you have to go deep in building a number of strong relationships.

The best way to speed up the process is to actually spend time in the process of developing relationships with the people you are networking with. Networking truly is more about farming than it is about hunting. It is about building relationships and friendships with other business professionals. Remember, it takes time to build friendships.

Becoming a Notable Networker–Tips and Insights

If you really want to succeed at networking, take a look at the following tips and insights:

  • Notable Networkers are people who are skilled at networking and committed to the idea that givers gain. By helping other businesses get new clients or customers, they get new business sent their way.
  • The key to building a word-of-mouth-based business is mutual support, not necessarily friendship.
  • Organizations that network effectively provide opportunities to develop and exchange quality business referrals. Being a member of a well-organized network is like having dozens of salespeople working for you, each referring prospective clients your way.
  • A Notable Networker must have a positive and supportive attitude. Good networking involves providing a positive and supportive environment for other businesspeople.
  • A Notable Networker must have and use the right tools to network skillfully, including an informative name badge, business cards and a business card carrying case to hold others’ cards.
  • Networking is an acquired skill; it requires listening to CDs, reading books and articles, talking to people who network well, and practicing what you’ve learned.
  • Effective networking requires practice, practice, practice–and then more practice.

Is there a bullet point in this list you would like me to expand on? If so, leave a comment and let me know; I’m more than happy to oblige. 🙂

Networking Minus Follow-Through Equals a Waste of Time

Smart, enterprising businesspeople know the importance of networking and how it is a huge opportunity to increase word-of-mouth and gain business referrals. However, one of the biggest mistakes people can make is failing to follow through.

One of my employees recently told me a story that should serve as an important lesson to all of us on how networking without follow-through is nothing more than a waste of time.

Note: The names in this story have been changed to protect the innocent . . . and the guilty.

My employee, whom we’ll call Winnifred (since she’d like to remain anonymous and it’s the most unfitting name for her that I can think of . . . well, aside from maybe Gertrude ;-)), was in need of a graphic designer to assist her with the creation of a website for her father’s business. She attended a local networking mixer where she met a graphic designer, “Blake,” who seemed excited about the project and claimed he could accomplish exactly what she needed at a very reasonable price.

They exchanged contact information and connected the next week by phone to discuss the project in further detail. Winnifred was pleased with Blake’s ideas and liked the examples she’d seen of his work. She told him he seemed like the perfect person to help her with the project and that she’d like him to send her a price quote as soon as possible.

A week went by and Winnifred heard nothing from Blake.  When she called him, he said he was working on a quote and gave some lame excuse about being busy. Another week went by and, again, nothing from Blake. Frustrated, but willing to give Blake another chance because she really did like his work, she sent him an e-mail and left him a voicemail saying that she would love to give him her business and was really anxious to hear back from him.

After two weeks went by without hearing back from him, Winnifred found another graphic designer. To this day, Blake has never responded.

Here is what blows my mind . . . I know for a fact that this guy, “Blake,” is still frequenting local networking mixers (which cost money to attend, by the way) trying to drum up more business. Yet when he had money practically sitting on the table in front of him, he failed to follow through. No matter what his reason was for not getting back to Winnifred–being too busy, too lazy or whatever else–he shouldn’t be out there networking if he can’t follow through on what he claims to be able to deliver. He’s wasting his time (and money) and, more important, he’s wasting other people’s time–which is earning him nothing more than a bad name.

The moral of this story: If you aren’t prepared to follow through, networking is no more than a big waste of time.

If you have a “Blake the Flake” story of your own, I’d love to hear about your experience. Please feel free to share your story in the comments section.

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