Does glad handing your city mayor and speed networking at your local chamber really work? Does attending an after-hours mixer with drinks get results or get a bunch of “business professionals” tipsy? Does waking up at 5:30 a.m. to attend a 7:00 a.m. breakfast for your local Realtors, Builders, or BNI club get you referrals or just an early start to a long day? The answer is in you first and the event second.
First, you get what you put into it. If you want the local Chamber of Commerce, Realtors Association, Builders Association, etc. to be an effective referral network for you then you must attend the breakfasts, or luncheons and you must go to most of the after-hours mixers for that club. Showing up is 50% of getting the referral. If you don’t show up, you’ll never meet the referral partner, hence no referral. The other 50% is the work you put into each individual event. You could choose to stand in the corner and drink coffee. You might find that some outgoing person will come up to you. It’s doubtful, but it may happen. Instead, you need to walk up to a group of strangers, interrupt them gracefully when there is an opportunity and introduce yourself. Be prepared to talk about something other than work so that folks will get to know who you are, not just what you do. But when someone asks what you do, you need to be prepared to answer with a 30-second description of why you matter, not what you do. No one cares about what you do, they care about why you do it.
Why do you want to build a network?
Referrals. Pure and simple, referrals are the best way to grow your business in a profitable way. Why? Because referrals are the most likely customers to purchase from you.
Referrals have a 70% higher conversion rate
Referrals report a 69% faster close time on sales
28% of millennials say they won’t try a product if their friends don’t approve of it
Word of mouth is the primary factor behind 20-50% of purchasing decisions
Every book, magazine, article and blog on sales will tell you to ask for referrals, I’ve even heard it called the “kiss goodbye”. Nice, really. Yes, you should always ask for referrals – from everyone, everywhere. The faster you embrace this philosophy the faster your business will grow. It’s important to commit to a system and have goals to achieve the metrics you want to achieve. Brian Buffini has laid the foundation of “Working by Referral” and I highly recommend reading his book regardless of what sales industry you find yourself in.
A friend of mine asked me to join BNI? Should I?
BNI and its counterparts are an excellent way to grow your referral network…or waste your time and money. It all depends on you. Again, I’m going to circle back to you get what you put into it. If you show up, engage, and give referrals, then you’ll get a few as well. Some professionals have eliminated all their other associations and focus their entire efforts on their BNI or similar group because it’s that effective. These are highly effective and successful salespersons who have a large networking group to pull from so they know how to give many referrals and therefore they get many referrals. It also helps when there is a perfect match in a club such as a Realtor and a Lender. Pairings such as those are especially lucrative in those exclusive clubs. In any case, “It’s important to be surrounded by like-minded individuals to truly grow your business and achieve your goals,” says Startup Nation. “If you don’t have anyone to bounce ideas off of, you’ll get stuck in an echo chamber. Being around other, more experienced entrepreneurs will inspire you to achieve your dreams, instead of that empty “hustle” that many entrepreneurs constantly find themselves striving for.” If’ you’re offered a seat, give it a try, if it’s not for you, you’ll figure it out.
Can LinkedIn Build my Referral Network?
Microsoft Dynamics started touting their integration with LinkedIn as if it was this golden ticket into the networking world. Factoid - it isn’t. LinkedIn is great if you want to stalk a prospective employee in private mode to get more info on their work history. Or, if you’re an HR professional it’s useful to scavenge for potential recruits for that “Entry Level Marketing Manager” position that actually pays commission only and is really just a sales position that no one wants. Other than that, keep sending “Congrats on your work anniversary” messages to people you met once…maybe. If you want to build your referral network, do it in person. That doesn’t mean dump your LinkedIn account. Let’s just hope that someday LinkedIn will figure out what to do with the incredible platform they have.
How to Build Authentic Relationships
Essentially, networking is about nurturing a relationship with a partner to the point that you have built a lasting and authentic relationship with a strong referral partner that sends you multiple referrals each month without hesitation. So how do you achieve that goal? First, you need to be authentic yourself. That’s why I said start with talking about you first and not your business. Relationships are built on a mutual understanding of each other, not each other’s job. Second, explain why you do what you do so that your referral partner feels emotionally attached to your cause. This means you need to have a good “why” developed before you meet your referral partner, so start with that now. Like Simon Sinek suggests, people don’t buy what you do, they buy why you do it. Figure that out now. Then develop your 30-second introduction into why you do what you do. Include your name, your company name, but leave the rest up to the “why”. You’ll be surprised at how people respond to your introduction because everyone is used to hearing the same, tired list of items people sell. No one cares about that. Be different.
Offer to Help
The next step in the relationship is offering to help. Once you’ve developed a rapport with the referral client whether it’s 15 minutes later or 3 months later, offer to help. If you can offer solutions directly from your business product offerings, then Bingo! You nailed it. But any offer to help is usually well received. Think outside of the box. If your business can’t provide a service that can help, consider ways that you can partner with a non-profit that can provide services for this valuable referral partner. How can you assist them? Maybe you can refer them someone you know!
Give a Referral to Get a Referral
I have a metric that I use for all of my referral clients. I aim to give 3 referrals for every 1 referral that I get. I don’t always achieve that goal, but I try. Referral partners love it when you refer back to them most of all. It makes them feel validated for their efforts. It’s better than a Thank You card, better than a box of chocolates and better than a Starbucks gift card – even if the referral doesn’t work out. It’s the fact that you thought to give them a referral that counts. Always give referrals. Be on the lookout for your referral partners and become a hub in your community where you are constantly referring people to your network. This is the most precious tool of the most effective salespeople.
Ah, the notecard. Yes, salespeople love to loathe the notecard. It’s time consuming, it requires thought. It must be handwritten which troubles some of us who are penmanship challenged. Yet, it is a crucial tool for getting referrals. After every referral received, you must write a Thank You note. It must be handwritten, and it must be unique. After every sale, you must write a Thank You note. It must be handwritten, and it must be signed, and it must ask for referrals. Don’t skip this step or you’ll be leaving referrals on the table for no good reason. Once you get into a process, it will be much easier to knock out first thing in the morning, or after lunch. One multi-millionaire salesperson told me he wrote them in his Mercedes after lunch with his wife every day. Whatever works for you, just get it done.
Why not just advertise? It would be so much easier
I’ll put my referral network up against your Zillow ads or your Google Ads or your Facebook ads or your radio, newspaper, website – you name it ads any day. My referral network close ratio is in excess of 91%. That is every referral from day one. Does Zillow do that for you at how much per lead? How about Google? Besides, my referral network gives me personal rewards. I get to spend time with people I enjoy talking to. I engage professionals and develop in ways that I never would by answering lead calls all day. Of course I think you should advertise too, don’t be ridiculous. A quarterback doesn’t just pass the ball. (I had to throw in a football analogy, sorry soccer fans.) No business has any justification being a one-trick pony. However, learning to develop your referral network will pay out in dividends over the long term that will make selling much easier for you as your business grows. Therefore, put in the extra effort to develop your referral network now and enjoy the rewards of your efforts during the years to come.
Dan Barry, Safewest Insurance