In Part one of this three-part series we looked at why you would want a Referral Program that connects you with like-minded professionals who sell to customers similar to yours, the advantages of having a network of Referral Partners, and how a prospect that comes to you via a referral is more qualified than someone who comes to you through any other form of advertising.
Now let’s look at the actual workings of the Program, what’s involved, and what you need to know.
We’ve said it before: you and your Referral Partner should have similar types of customers in common. You should also know how your Referral Partner conducts business, and they should know the same about you.
If your Referral Partner doesn’t know you very well, building trust can be a challenge. Help him or her come to know, like and trust you by sharing “Before and After” Case Studies, testimonials and online reviews.
Tell them about other referral relationships you have. Look to see if you have any customers in common from before you started the referral relationship. Happy customers are the most powerful proof of your business expertise you can offer.
The more your Referral Partners feel they can trust you, the more business they will send your way.
Successful referral programs flow both ways. Give first, and you’re more likely to get. The best way to start getting referrals is to start sending some.
After you share the profile of your ideal customer with your new Referral Partner, get to know your Referral Partner’s ideal customer, too. You expect him to know yours – turnabout is fair play.
If the situation occurs where you’re doing all the referring and/or not getting referral fees, you’re not benefitting from the relationship. Time to make some changes. Don’t invest any more time, effort and energy. Find someone new who is tuned into the program.
Communication snafus will de-rail your Referral Program faster than any other challenge. What you meant to say, what you actually said, what they thought you said, and what each of you remembered about the conversation – so much room for misunderstanding. Always be as clear as possible.
Best practices say you both should agree to touch base regularly; once a month is ideal.
Don’t hesitate to pick up the phone. Every minute you spend talking with a Referral Partner will be beneficial. Every communication, whether face to face, on the phone, or via e-mail builds trust.
E-mails such as these are great:
• “I wanted to let you know that your customer and I were able to touch base and set up a discovery call.”
• “The discovery call is done and your customer plans to make a decision by the end of the month.”
• “Great news! The customer is signing with me – I will keep you posted.”
Stay in touch and build the relationship; don’t be “out of sight, out of mind.”
How you want to handle referral fees should be discussed at the onset of the relationship. By having this conversation when you first begin to explore the possibility of forming an alliance, you help to avoid any unpleasantness down the road. And what causes more unpleasantness than money?
Referral rewards should be generous enough to encourage referrals. The more money involved in the transaction, the bigger the reward should be. Your reward program can be as simple as a certain dollar amount paid for a certain dollar amount sold.
Some referral programs acknowledge the referral at two points: (1) when the referral is received and (2) when the referral closes.
Send a reward when you receive the referral so that even if the referral doesn’t result in a sale, the referral is acknowledged and rewarded. One suggestion is to send some expensive chocolates, together with a hand-written note saying thanks.
The cash fee is paid when the sale closes.
If your Referral Partner doesn’t want cash for some reason, don’t be cheap! If you send a gift rather than cash, it should be appropriate for the cost of the closed sale. Possible suggestions: concert tickets, movie tickets, gift certificates to restaurants, a bottle of liquor or wine for those who drink, steaks from Omaha or other online purveyor. Think of something you would like to receive — that’s what you should send.
There’s no better way to encourage your partners to send more referrals to you than to reward them for the ones they sent.
Your Referral Program will only flourish and thrive if you work it, and this means taking care of your Referral Partners: from nurturing them through the discovery and launch of the partnership on through reinforcing their confidence in you by taking excellent care of your new customers who are referred to you.
Remember the win for Retail Partner-win for the customer-win for you? There it is: your Referral Partner is satisfied, your new customers are happy, and your business continues on a path to growth.
The successful Program will create a cycle that runs on trust: Your Referral Partners are happy because you did what you do, which in turn leads to more opportunities for you to do what you do that then makes them happy.