How to: Build a Referral Network

You are probably networking so that you can generate business. Correct? Well growing your business requires referrals. You may already get ad hoc and other random referrals, but these can be difficult to predict and develop. So a great way to ensure regular referrals for your business may be to build a strong referral network.

What is a Referral Network?

A referral network is a network of individuals and organisations that provide referrals. Referral networks can be a mix of informal and formal agreements. More formal referral networks often include groups of companies within related industries that can work together to provide cross-referrals. Formal referral networks often have carefully put together groups of companies with a commitment from member companies to provide a certain number of referrals.

However, more often you will find that by building your network you build up an informal referral network. Learn what your contacts do, get to know people and cross-refer your contacts and make introductions.

The great thing is that referral networks can be used by anyone. The power of a personal recommendation is really strong. Therefore personal recommendations is a source of referrals that really should be used. Referral networks work best for businesses that share a target audience or work within the same industry (but are not competitors). They don’t compete for business, instead, they provide extra value to their own clients by being able to provide relevant referrals.

How to Build a Referral Network

If you are looking for something more formal start by looking locally for referral networking groups. Such as BNI. Alternatively, your local chamber of commerce or online communities relevant to your industry may also be helpful in facilitating these connections.

If you are looking for something more informal it is more about just getting started with connecting with industry professionals and other businesses that might be relevant for your target audience. For example, you might attend trade shows or industry conferences to start building up relevant contacts. Start small by just connecting and sharing contact information, then work on building and developing those relationships.

However, it is important to remember to provide genuine referrals. By recommending a business that you aren’t familiar with or confident in, you could be damaging own reputation if the client is not pleased with the service they receive. So do bear this in mind if you are referring and recommending others.