Eight Categories of Referral Sources for Your Business

Eight Categories of Referral Sources for Your Businessstring(54) "Eight Categories of Referral Sources for Your Business"

June 27, 2022
, , , , BNI, Business, Referrals 4

Referrals are often the most profitable way to gain new customers. And the only way to get referrals is through other people in your network.
I’ve found that most networkers only focus on existing clients as their main source for business referrals. However, there are seven other referral sources which can also be developed to generate opportunities for new referrals.

  1. Satisfied Clients
     One of your best referral sources is satisfied clients. Having firsthand experience with your products or services, they are true believers and can give convincing testimonials about you. Stay in touch with these customers; they are your top fans, your best promoters, and they can be very effective in helping others decide to do business with you.

  2. People in Your Contact Sphere
     A Contact Sphere is a group of businesses and professions that complement, rather than compete with, your business. Each of them has customers who can benefit from the services of the others. For instance: event planner, caterer, photographer, and florist.

  3. People Whose Business Benefits from Yours
     These are the people who get more business when you get more business: your suppliers and vendors. If you sell workbooks, the printer who prints them for you benefits. It is in these other businesses’ self-interest to give you referrals.

  4. Others with Whom You Do Business
     Think about the people you go to for your personal and professional needs. Your own business may not have anything to do with dentistry or hairstyling or automobiles, but in your everyday life you do business with a dentist, a hairstylist, auto mechanic, and many more. If you’ve been using their services for some time, they probably know what you do and that you’re a reliable, trustworthy person. Sometimes this is all the recommendation a potential client needs.

  5. Staff Members
     Except for customers, no one understands better than staff members how your products or services perform. Every member of your staff from all departments gives your business a boost when they talk with their friends, neighbors, and people they meet in their daily lives. Remember that working for your company will always be a part of your former staff members’ history, too, and is often part of their conversation with prospects as well.

  6. People to Whom You’ve Given Referrals
     You’re more likely to get a referral from someone to whom you’ve given a referral or helped them in some way. The best networkers believe in the “givers gain” philosophy (what goes around comes around). The more you give to others, the more you’ll get in the future.

  7. People Who Have Given You Referrals
     People who give you referrals for business, or direct others to you for advice, are demonstrating that they think highly of you and what you do. If they didn’t, they would refer people elsewhere. Strengthen and nurture these prospective referral sources; don’t take them for granted. Show your appreciation with personal communication and by referring prospects to them.

  8. Other Members of Business Referral Groups
    Referral groups are set up by their members mainly to exchange business referrals. A typical weekly meeting of such a group includes time devoted exclusively to networking and referring business. Get to know your fellow members to build mutually beneficial relationships that help each other’s businesses grow.

Community Service Organizations

As you think about the people you know in the eight different groups of referral sources, you may find that many of them are from community service groups you are involved with. These types of organizations give business professionals an opportunity to give something back to their community and to make valuable contacts.

While these groups exist primarily for community service, they also provide an excellent opportunity for businesspeople to meet regularly and develop relationships.
Local service organizations are usually populated with the movers and shakers of the community. Those who are long-term, active, and contributing members of such groups usually end up befriending people who can open doors and present little-known opportunities for them.

With any business organization, particularly service clubs, it is very important to remember that making effective contacts and building deep business relationships is a journey, not a destination.

Savvy professionals who know and cultivate their most likely referral sources get the largest number of high-quality referrals, and the more referrals they get, the more revenue they generate in the long run.

I urge you to make a commitment to reach out and connect with at least one person from two or three of these eight commonly untapped referral sources to start developing and strengthening your business relationship with your potential referral partner.

Business Growth During Economic Challengesstring(42) "Business Growth During Economic Challenges"

October 4, 2021
, Business, Networking Tactics 1

When the economy is slow, new business is harder to get. What can I do to build my business in a challenging economy?

I’ve heard this question many times over the years. The fact is that every economy goes through cycles, and business slows down for some people. My recommendation is – don’t join the ranks of miserable complainers. Use the time to improve your networking skills.

If you want to do well and have business growth during economic challenges, understand that is does absolutely no good to complain to people about how tough things are. When you complain about how bad business is, half the people that you tell don’t care, and the other half are glad you are worse off than they are.

Six Ways to Improve Networking Skills

  1.   Diversify your business network. If your network is a mile wide but only an inch deep, it is too shallow. You need to have networks that are broad and deep. Business networking groups such as BNI® are the deep part of that; they are where you build strong, mutually beneficial business relationships. You also want to participate in your local Chamber of Commerce & Industry, as well as in other professional organizations.
  2.   Refuse to be a cave-dweller. Get out there and meet people at business events, especially during a slow economy. Go to networking events with a positive attitude and decide that you refuse to participate in a recession or in any negativity. Learn how to work the network meetings that you attend and put forth the effort to do so. It is not called net-sit or net-eat. It is called network.
  3.   Learn networking systems and techniques that apply to the different organizations to which you belong. Focus your efforts on educating others about our business rather than trying to make a sale. Have a Givers Gain® attitude by asking how you can help others before asking them for referrals.  
  4.   Be prepared. Before a meeting, prepare effective introductions and presentations to share with your fellow members. Find ways to use whatever is going on in the economy as a way of marketing. Make it positive for your business, not negative.
  5.   Develop your contact spheres. A group of business professionals who have a symbiotic, noncompetitive business relationship with you are more important than ever. A referral to one person in the group is often a referral to many because each member of the contact sphere has products or services that the client can benefit from.
  6.   Establish a goal and reverse-engineer it. Know what you want to accomplish and share your goal with your networking group. Do the G.A.I.N.S. exchange with your referral partners. G.A.I.N.S. is from my book Business by Referral; it stands for Goals, Accomplishments, Interests, Networks and Skills.  

Your Network is Your Advantage

When you are part of a trusted network that you have established over time, and consistently participate in a positive way, you develop a huge advantage over the competition. You are building your business through networking, through referrals, through word-of-mouth. Your competition is just going to have to rely on increased advertising, while you have a powerful network to draw upon. If the times are tough around you, look for opportunities to market and use your network as the vehicle to do that. Be creative about working with your business network.

I have seen thousands of businesspeople grow and prosper during economic challenges because they developed their networking skills and learned to build their business through word-of-mouth marketing.

Don’t let a slow economy be your excuse for failure. Instead, make it an opportunity to succeed. It is not what you know or who you know. It’s how well you know them that really counts. In a tough economy, it is your social capital that has value. Make good use of it. While others may struggle, you can thrive.

You can’t control the economy. You can’t control the competition. You CAN control your response to any situation. Referrals can keep your business alive and strong, even during economic challenges.

Contact Sphere

Developing a Networking Contact Spherestring(38) "Developing a Networking Contact Sphere"

October 10, 2019
, , Connections, Networking, Relationships 1

A contact sphere is a group of business professionals who have a symbiotic relationship. They are compatible, non-competitive professions. Contact spheres are a broad list of professions that could work well with you. While your Power Team is only those that you are actively working with. Hence, the power team working that symbiotic relationship created in the contact sphere.

My favorite example of a contact sphere is the caterer, the florist, the photographer, the videographer, hairstylist, makeup artist, and the travel agent. I call this the “wedding mafia”! If one gets a referral to a wedding, then they all get a referral to the wedding. These professions, more than most, have truly learned how to work their contact sphere. A contact sphere can be a steady source of leads. Each has clients who can benefit from the services of the others.  This is why a wedding often turns out to be, on the side, a business networking and referral-gathering activity.

To get the most out of your contact sphere:

  • Identify as many professions as possible that fit within your company’s contact sphere. Take a look at what professions your industry tends to work with to get an idea of repetitive and reciprocal referrals. Create a list of these professions.
  • Identify specific individuals who could fit into your contact sphere. Go to various networking groups and consult your business card file and database.
  • Invite these people to participate in networking groups with you so you can formalize your relationship and have a way to stay in regular contact. Maintaining a relationship is key. A good way to do that is to participate in groups that put you together on a regular basis.
  • Evaluate the professionals in your contact sphere that you are presently referring to. If they are not reciprocating, you may have the wrong profession or the wrong person. Fill the spot with someone who is willing to reciprocate.

Although developing a solid contact sphere will greatly increase your business, you must remember that it alone is not enough. Because contact spheres consist of small groups, you’re not likely to gain exposure to a large number of individuals. Hence, work on developing your overall network of contacts at the same time you are developing your contact sphere. Good luck. Contact spheres are a great way to start building your professional network.

Building Up Your Power Teamstring(27) "Building Up Your Power Team"

January 28, 2016
, , , Credibility, Growth, Trust 1

ID-100223937How do you increase the number of referrals your networking contacts are helping pass to you? One way, of course, is to educate your contacts on how to best get referrals for you. Another easy way to increase your number of referrals is to create relationships with people who, based on their professions, are most likely to pass quality referrals to you. These ideal referral partners are broken up into two groups: Contact Spheres and Power Teams.

The difference between the two is minor, yet impactful. Your Contact Sphere is all the possible professions you can team up with, while your Power Team is the group that you have actually teamed up with. Often times, these groups will be made up of professions that work together symbiotically, and are naturally inclined to refer business to one another. Think somewhat related, but non-competing, businesses.

To build your Power Team, you’ll want to take some time and map out your ideal Contact Sphere. What professions could you work well with, if only you knew someone who worked in that field?

Once you’ve built your Power Team, your work isn’t done. You must always be looking for ways to pass a referral to your Power Team. Over time, you’ll develop trust and your Power Team partners will pass significantly more referrals to you.

Additionally, one thing that I have seen work well for Power Teams is a weekly meeting, or at a minimum every other week. These meetings should be outside of your regular networking events, and should be smaller, more intimate gatherings with your Power Team. To keep your meetings running smoothly, have a chairperson to lead discussion. Each member of the Power Team should discuss their ideal referral, and perhaps dedicate some time to brainstorming places to find these referrals. As a group, you may also discuss potential other professions who would fit well in your Power Team.

Common mistakes I’ve seen with Power Teams include:

  • Confusing them for Contact Spheres. Contact Spheres are a broad list of professions that could work well with you, while your Power Team is only those that you are actively working with.
  • Not dedicating time to them. Just forming a Power Team will not build up referrals for you. Like with any other relationship, you need to build up trust, learn the wants and needs of the other members of the team, and establish best ways to help everyone in the group meet their business goals.
  • Not building the right team. If you have someone in your Power Team who isn’t passing referrals to you, whether that be because they are having your services done in house or any other reason, they shouldn’t be in your Power Team. While you may not be able to avoid having them in your networking group, you are able to partner with someone outside of your group. There is nothing wrong with having multiple networks.

Four More Referral Sources to Tap into for Business Growthstring(58) "Four More Referral Sources to Tap into for Business Growth"

April 30, 2012
, , , , , , , , , , Business, Connections, Marketing/Sales, Networking, Networking Prep, Networking Tactics, Referral Institute, Referrals, Word of Mouth

A week ago today, I outlined a brief description of each of the first four of the eight referral sources.  I encouraged blog readers to spend the past week taking action in developing at least two of those referral sources and promised that this week I would explain the last four referral sources. 

* Remember, the more you learn about each referral source, the more referral sources you will develop; the more referral sources you develop, the more referrals you will get and the more your business will grow!

The Eight Referral Sources: Sources #5 — #8

  • Staff Members
    Except for customers, no one understands better than staff members how your products or services perform.  Not just sales and marketing staff–generating sales is what they were hired to do–but part-time or full-time staff members in administration, production, and other functions give your business a boost when they talk with friends, neighbors, associates, and people they meet in their daily lives.  Keep them happy; a disgruntled employee can do your business a lot of harm. Don’t overlook former staff members, either.  Working for your company will always be a part of their history, and often part of their conversation with prospects as well.
  • People to Whom You’ve Given Referrals
    You’re more likely to get a referral from someone to whom you’ve given a referral.  The more you give, the more you’ll get.
  • Anyone Who Has Given You Referrals
    People who give you referrals for business or direct others to you for networking or advice are demonstrating that they think highly of you and what you do.  If they didn’t, they would refer people elsewhere.  Strengthen and nurture these prospective referral sources; don’t take them for granted.  Show your appreciation with personal gestures and by referring prospects to them.  Call on them for further referrals, but don’t abuse their generosity.  Maintain the business standards that earned you their respect.
  • Other Members of Business Referral Groups
    Referral groups are set up by their members mainly to exchange leads and referrals.  A typical weekly meeting of such a group includes time devoted exclusively to networking and referring business.  If you’re a member, this is what you signed up for: ready access to potential new clients.  To encourage communication and limit possible competitive conflicts, business referral groups often restrict membership to one person per profession or specialty.

Between last Monday’s blog and today’s blog, you should now have a good understanding of the eight referral sources and there is no better time than right now to start developing them for more referrals! 

If you accepted last week’s challenge of developing at least two of the first four referral sources, I’d love to hear about which sources you chose to focus on and what your experience was.  Now the question is, which of these next four sources are you going to work on developing next?  Please leave your thoughts in the comments section.

The Eight Referral Sources–Learn More, Get Morestring(53) "The Eight Referral Sources–Learn More, Get More"

April 23, 2012
, , , , , , , , , Business, Connections, Marketing/Sales, Networking, Networking Prep, Networking Tactics, Referral Institute, Referrals, Word of Mouth 5

Last week I posted a video blog featuring Referral Institute Trainer Cheryl Hansen talking about the opportunity to significantly increase the number of referrals you receive by developing more than just one of the eight referral sources.  The fact is, the more you learn about each referral source, the more referral sources you will develop; the more referral sources you develop, the more referrals you will get and the more your business will grow!

Since last week’s video blog, I have received requests via social media to explain each of the eight sources in a little bit more detail, so today I am posting a brief description of the first four sources below and (for the sake of space) next week I’ll post information about the last four sources.

The Eight Referral Sources: Sources #1 — #4

  1. People in Your Contact Sphere
    A group of businesses/professions that complement, rather than compete with, your business.  A Contact Sphere can be a steady source of leads.  It’s almost a sure thing: if you put a caterer, a florist, an entertainer, a printer, a meeting planner, and a photographer in the same room for an hour, you couldn’t stop them from doing business.  Each has clients who can benefit from the services of the others.  This is why a wedding often turns out to be, on the side, a business networking and referral-gathering activity.
  2. Satisfied Clients
    One of your best referral sources is satisfied clients.  Having firsthand experience with your products or services, they are true believers and can communicate convincing testimonials.  Keep track of these clients; they are your fans, your best promoters, and they can be very effective in helping others decide to do business with you.  Of course, a dissatisfied client is equally effective in turning prospects away from you.
  3. People Whose Business Benefits from Yours
    Of the eight kinds of people in your referral network, none stand to gain more than those who get more business when you get more business: business suppliers and vendors, for example.  If you sell workbooks, the printer who prints them for you benefits.  A related business located close to you may benefit from your customers–for example, a health-food restaurant located next to your family fitness center.  In these circumstances, it is obviously in the other businesses’ self-interest to give you referrals.
  4. Others with Whom You Do Business
    Perhaps your business doesn’t have anything to do with dentistry or hairstyling or automobiles, but every day you do business with dentists, hairstylists, and auto mechanics.  By contributing to the success of their business, you will gain their goodwill; to keep you as a customer, they’re inclined to help you secure customers of your own.  If you’ve been using their services for some time, these vendors probably know what you do and that you’re a reliable, trustworthy person.  Sometimes this is all the recommendation a potential client needs.

Now that you know more about the first four referral sources, why not start developing them now?  Reach out and connect with one person from at least two (or all four if you’re really motivated!) of these different referral sources this week and be sure to come back next week to learn about the last four of the eight referral sources.