steps | Dr. Ivan Misner®

Much of what I write about networking and referrals emphasizes the circuitous, sometimes mysterious nature of referral networking. In a deep, broad-based, mature referral network, where you spend a lot of time doing good things for others without looking for a direct reward, and where the good that you do winds its way through the system and eventually comes back to you in the form of referrals, it may seem odd to describe referral networking as a system. But that’s what it is, and when it comes to the actions of generating, developing, and closing a business deal through a referral, there is a well defined, systematic process.

What is a referral? It’s not as simple as it’s sometimes made out to be. We leave college and go into business knowing little about referrals, because referral marketing is rarely part of the curriculum. We know what a great thing it is to get a referral, because it generally means lucrative business with a reliable client. We often think of it simply as a connection to someone we can call on to do business with or, if it’s not our kind of business, someone we can refer to someone else.

We understand that referrals are the best kind of business. What we don’t understand is how to make them happen when we want them and, when they come in, how to get the best results from them and make them last. The referral process is a system that has a lot of feedback built into it. If you follow it for every referral, you will get predictable results: more closed business deals and a never-ending supply of referrals.

I have broken the referral process down into eight easy steps:

Step 1–Your Source Discovers a Referral
Step 2–Research the Referral
Step 3–Check Back In With Your Referral Source
Step 4–Meet With the Referral
Step 5–Report Back to Your Source
Step 6–Your Source Gets Feedback from the Referral
Step 7–Your Source Reports Back to You
Step 8–Close the Deal

I’ll be breaking these steps down in detail in several different blog entries over the coming weeks so if you’re interested in getting specific guidance on how to execute each step in the referral process, be sure to check back in weekly.

Developing an effective word-of-mouth strategy that results in a strong referral-based business takes endless time, energy, effort and, above all, commitment. The actions and steps necessary to create a successful referral-networking campaign are simple, yet far from easy; they take tremendous dedication and drive, and results can be a long time in coming.

So why should you put forth the time and effort to develop a word-of-mouth strategy for your business? Because, if you commit to doing it right and don’t give up, the payoff can be unbelievably high.

In fact, many businesses have become so adept at referral marketing that they get most of their sales through referrals and spend little or no money on advertising — and they never have to place cold calls. Some of these businesses hire most of their employees through referrals, manage complex financing arrangements and even procure necessary products through referral contacts they have cultivated for many years.

But a referral-based business can reward you in ways beyond those measured in dollars. Dealing with people you like and trust is a better way to live and work than sparring with strangers all day long. You may even find the relationships you form with your referral sources more important than the dollars your new customers bring you. Such relationships are central to both the referral-generation process and the satisfaction you derive from your work.

So, the next time you find yourself doubting whether your networking efforts are really worth it, remember: If you don’t give up, and you continually devote yourself to working on making your word-of-mouth strategy better and better, the payoff can be enormous both financially and in terms of happiness in business and life.