How to Identify Strategic Referral Partners

strategic referral partners

In last week’s blog post, you received an eight-step process you can use to get more referral partners and encourage them to send you clients.

This week, I’m going to go into detail on how to identify the RIGHT strategic referral partners.

My name is Frederick Geiger, and I’m a BNI area director and a certified Duct Tape Marketing Consultant.

I specialize in helping people to get more referrals, and I rely on the strategy myself because it has the highest ROI of any marketing activity – IF you use it correctly, and partner with the right people.

That second element is often overlooked, but it’s extremely important to your success, partly because your choice of referral partners determines how many referrals you’ll receive.

Even if someone serves your ideal client in a way that complements your offer, they still might not be able to send you business!

There’s also the fact that giving referrals correctly is as important as getting them.

When you help your customers to find all the services and resources they need, you become much more valuable in their eyes, which increases the likelihood that they’ll recommend you or work with you again, so giving referrals can be as beneficial as receiving them.

But if you send your clients to the wrong people, they might never trust your advice again.

In this blog post, I’ll do a deep dive into how to choose the right strategic partners, form partnerships with them, and actually exchange referrals, so instead of knowing what to do but not how to do it, you’ll know exactly which steps to take in order to give and receive business.

Start by identifying what your clients need that your strategic referral partners can provide

For people to be able to send you clients, they need to be in touch with those clients. And for you to successfully give them referrals, they need to be selling something your customers actually want.

While it’s true that anyone you meet has the potential to encounter one of your ideal clients once in a while, you’ll get much better results if you work with people who already interact with dozens of those clients on a regular basis, and whose services complement or necessitate yours.

On top of helping you get more referrals, this also makes you more valuable, because your clients don’t just want your product or service – they want a RESULT. To get that result, they often need a whole product – and no, I’m not just referring to a single entire product.

What do I mean by ‘whole product?

When I was responsible for software product management, I became aware of the concept of the whole product.

The whole product wasn’t just a piece of software – it included the training, implementation, hardware and other services that were necessary for the business client to get the full use of the product. All too often, the software developers who worked for us didn’t get that concept.

Apple, on the other hand, took the concept of the whole product to insanely great new levels. The iPod became iTunes on a Mac, which then became Apple music. Then they added the App store for apps, which became a phone, and on and on until an entire ecosystem evolved out of what was originally a small white thing with 1,000 static songs on it.

The real value of the device came into being when thousands of software developers created apps. These apps are strategic partners.

In working with small business owners, many of whom are technicians operating a business, I’ve found that they often think like software developers – which is to say, they only think of the thing that they are selling.

But when you put them all together, it isn’t just music anymore – it’s a whole system of obtaining and listening to music, using millions of systems and conveniences that no one ever realized they wanted or needed until Apple offered them.

You can accomplish the same goal, and stand head and shoulders above the crowd, by partnering with people who can give your clients a more comprehensive, effective and easy-to-use service than anyone else is offering.

If you aren’t sure what kinds of businesses complement yours, ask yourself these questions:

Q1. “What result do my clients want, what are all the steps and tools they need in order to get there, and do I provide all of that?”

Walk yourself through the customer’s journey, step by step. Do they get all the necessary steps from you, or do they have to look elsewhere for some of them?

Don’t just think about what you’re offering them now – think in terms of what they want, and the whole product they need to get that result.

Q2. “What do I often advise my clients to do that might require additional services or products?

For example, if you’re a business coach who helps entrepreneurs to be more productive and make more money while working fewer hours, you might advise them to hire a team. While you provide the advice, you don’t provide a team or the labor they’d perform.

That being the case, you could form strategic partnerships with a copywriter, a virtual assistant, and a graphic designer.

Here’s another example: You are a real estate agent, and you’re working with affluent baby boomers who are ready to downsize.

Your client might need a home stager to get the excess junk into storage so the house looks clean and fresh. They might also need a downsizing coach, like the one I met training in BNI yesterday, to help them with the process.

They will need different furniture in the downsized space and might want to have an auction to get rid of all the possessions they no longer want or need.

The list goes on and on, and often these service people meet your potential clients before you do, which means they can refer the clients to you. Use your imagination, and think about what a person in your clients’ position would need in addition to your services.

Q3. “What do my clients often purchase after or during our work together?”

Asking your clients that question can give you insight into what they need that you aren’t providing, so you know what products or services you want your referral partners to offer them.

It also lets you know which brands they trust, which is very important for choosing who you should entrust your valued clients to.

Speaking of which…

Partner with “best of class” providers who serve the same people you do.

It’s important to work with “best in class” providers – people who give their clients excellent service, and who have their trust and goodwill as a result.

Those companies will be better able to make referrals, because their clients like them, believe them, and are willing to act on their recommendations.

You’ll also be more confident in giving them referrals because you’ll know that if you send them a client, it will help your relationship with that client instead of hurting it.

If you couldn’t send your best customer to someone with 100% confidence, don’t enter a referral partnership with them – it will do more harm than good in the long run.

If you always ask yourself what your referral relationship will mean for your customers, that will help you to stay on the right track, even when you’d otherwise be unsure of whether or how to proceed.

When you’re thinking about putting a lot of time and effort into a referral partnership, research that company first. What kind of customer reviews do they have?

Similarly, when it comes time to request referrals from them, be prepared to provide them with your reviews and testimonials, so they can see that the people they send to you will be in good hands.

You both stake your reputations on each referral, so it’s important to know that your clients will be glad you made the recommendation.

Go where your ideal referral partners hang out.

Just as you’ll get better results by working with strategic partners who are in touch with high concentrations of your ideal clients, you’ll find those partners much more quickly and easily if you go to places with high concentrations of potential referral partners.

BNI and the Chamber of Commerce are great places to start because they’re full of business owners who are being actively taught to create referral partnerships.

Make sure your referral partners know EXACTLY who you serve and how.

When you tell your strategic partners what kind of clients you want them to send you, they should be able to immediately picture the face of someone they know. If they can’t, the description is too vague, or it might focus on things they can’t readily detect.

For example, “parents with false or negative beliefs about how to raise their kids” might be an accurate description, but it doesn’t tell people what signs and symptoms to look for.

“Busy working parents whose children don’t listen, throw tantrums, struggle in school, and resist doing their chores” is a far better description, because now people know exactly what kind of people to keep an eye out for and what symptoms to look for or ask about.

For best results, tell them how to identify three types of clients: the “bread and butter” clients who buy your most basic offer, the “cream” clients that need your mid-level product, and your “dream” clients who purchase your highest-ticket item.

Use the right approach when initiating the referral partner relationship.

Once you’ve chosen your candidates for strategic partnerships, you need to approach them in a way that makes you stand out and gets them interested in working with you.

All too often, business owners go to networking events hoping to sell their products or services to the people in the room or to go straight to receiving referrals.

This strategy tends to fall flat on its face, because of the networking paradox: everyone’s there to sell, but nobody’s there to buy! You’re selling to a room where there are no interested clients.

The good news is, this means you don’t have to spend as much time figuring out what the people in that room want because you already know: they want to get more leads and referrals, and to make more sales!

Because of this, you can get their attention by offering them something you know they want – and you’ll increase the odds that you’ll get what you want in the process.

68% of people who receive a referral from you will feel compelled to give you a referral in return, so just by sending them a client, you’re well on your way to receiving more business.

Having said that, even if you’re offering them something they want, they might not be convinced that you’re someone they want to work with. It’s important to have all the elements and strategies you need to form a lasting and lucrative partnership.

It’s also vital to use the right approach when you’re starting the conversation.

Many people try to initiate strategic partnerships by simply cold-calling their prospects and suggesting that they work together. This tactic isn’t very enticing, and will probably cost you a lot of could-have-been-lucrative relationships.

Instead, reach out and ask them to show you the best way to introduce your customers to them.

This is especially easy and effective if you’re approaching potential partners that your clients recommended since that common connection is a good icebreaker and the fact that your mutual customers trust you will help them to trust you too.

Ready to start meeting great referral partners who can send you dozens of clients?

Next week, I’ll reveal the best ways to contact potential referral partners, provide scripts that will help you to start exchanging referrals, and recommend specific strategies you can use not just to make a referral here and there, but to send dozens of clients to each other with less work.

In the meantime, now that you know who your ideal strategic partners are, you need to go out and start finding candidates!

At BNI, we make that process easy for you.

Our meeting rooms are full of people who are actively looking to form referral partnerships, and we have systems in place to make sure everyone has a chance to tell everyone who they help, how they help them, and who their ideal referral partners are.

Our methods are so effective that in 2016, our average members made over $20,000 in extra income just from referrals they received from their fellow BNI members!

If you want to form strategic partnerships that benefit you, your referral partners and your clients, we’d love to see you in our next meeting.

Click here to find a BNI chapter near you!

For more information about Frederick Geiger

For more information about Duct Tape Marketing

Imsger Credit – Adobe Stock

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Trackbacks & Pingbacks

  1. […] Today, over 80% of people buy based on personal referrals. Having a strategy in place to get referrals is one of the most cost-effective things you can do in 2018 to grow your small business here in Pittsburgh. Getting referral’s today in a social media-infused and app infused world is easier than ever.  So, look at ways both online and offline to get referrals.  Personally, I am partial to the BNI approach to creating strategic referral partnerships. […]

  2. […] our blog posts over the past month, you’ve gotten some valuable strategies and templates for identifying your ideal strategic partners, contacting them, creating a networking follow-up strategy that gets results, and running mutual […]

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