The Nature of a Referral Relationship

Over the years, I’ve run into countless people who believe that joining groups and organizations and becoming active by volunteering, taking on responsibilities and working side-by-side with other people on a common goal will cause people to get to know them and refer business to them.  However, this is not how things work.

Granted, it’s easy to think that if you rub elbows with someone long enough he or she will spontaneously start sending you business opportunities. But that’s really nothing more than an entitlement mentality.

Getting referrals usually takes three things: visibility, credibility and profitability.  Ordinary participation in an organization, even a strong-contact referral group, will get you visibility and perhaps some credibility; it won’t automatically get you profitability.  That takes a much more focused approach, along with some explicit talk about the kinds of referrals you want.

By nature, referral relationships are rewarding and valuable when they are created purposefully and by design. If you are assuming that the idea of giving you referrals is going to pop into someone’s head spontaneously if you hang around long enough, you are definitely misunderstanding what a referral relationship is supposed to be.

Woody Allen once said that “90 percent of success is just showing up,” but he wasn’t talking about referral marketing.  “Just showing up” will get you a seat at the table, but you have to pass the food to others and snag your own steak whenever it comes around.  It’s not “netsit” or “neteat“–it’s network!”  If you want to build your business through referrals, you have to learn how to deliberately work the networks to which you belong.

You see, participating in a group is one thing; performing is another.  To get referrals, you have to perform.  If you don’t perform–talk specifics about your business, your specialties and your ideal referral, and refer business to others in your group–how are they going to know what you do and what you need?  You have to take specific actions to let people know how they can refer business to you.  Being a good citizen is the right thing to do, but it’s not enough to get you the referrals you need to run your business by word-of-mouth marketing–you need to actively feed and water your referral relationships, so to speak, in order to significantly grow your business through referrals.

5 thoughts on “The Nature of a Referral Relationship

  1. Ivan, your post is right on! Networking events are places to go and “meet and greet” people. I love your statement about “it isn’t net sit or net eat.”When all is said and done, people do business with people whom they like.I spoke at an event in NYC last week with about 50 people–they came out on one of the worst nights, rainy and cold, to hang around and meet people. After interviewing several of these people this morning they all told me they came out to find meet people and find out about their business. How can you market to people you don’t understand. I will use your quote, it’s not netsit or net eat, very nice.

  2. When you Net-Sit , you ask for a sit and you get one .

    When you Net-Eat , you ask for something to eat and you get something to eat .

    And here’s the exciting part .When you NetWORK , you ask for Work and WALLA … you get work, a contract, a deal and BIG Business …. You indeed get what you ASK for . Ask and it shall be given ,as the saying goes . Only in an environment that not only ALLOWS but ENCOURAGES NETWORKING where members can ASK for WORK( via EFFECTIVE BUSINESS PRESENTATIONS and MUTUAL CO-OPERATION ) and flourish via INCREASED BUSINESS , can we truly say it is the RIGHT GROUP to join for NETWORKING and INCREASED BUSINESS .

    Happy Networking via increased Visibility, Credibility and Profitability .

    Ken Chin
    Kuala Lumpur , Malaysia ( 6012-3752756 )
    Member of an Organisation called BNI ( Business Network International ) since the year 2001 .
    check out

  3. You said, “If you want to build your business through referrals, you have to learn how to deliberately work the networks to which you belong.” I think that this is great advice. One avenue which some of our clients have enjoyed success at is promoting a referral program to existing clients, friends, colleagues and contracts. How that works is the referrer gets a monetary reward when they refer a new client succesfully. This encourages the referal process and gives the referer an incentive to refer you over someone else that they know who offers the same product or service.

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