Today I’m going to let you in on the best referral marketing strategy for your business: referral partners. Everyone knows referrals are the best new customers you can get. All the stats show they are easier to close, they spend more, and they stay longer. As a bonus, they also typically refer others.
With referrals, you don’t need to worry about someone banning you from their platform or a social media site declining in popularity. As long as you have customers, provide great service, and have a method for getting referrals, you’re set.
I’m sure you’ve heard advice like, “Just ask for referrals and they will come,” or “Hand out referral cards.” That stuff may or may not work depending on your industry, but we’ve all heard it before. The harder truth is that you actually have to work to garner referrals and develop strategies that will generate them. I’m here to tell you how to do just that.
The No. 1 Way to Encourage Referrals
What if I told you there was a secret way to get more referrals — one that simply crushes it but rarely gets used?
What if I went on to tell you that it works even in professions that can’t give out gifts or prizes?
This is the exact strategy I’ve used for years as my largest source of new customers for The Newsletter Pro.
Here’s how my referral-partner strategy works.
There are entrepreneurs out there right now who have many of your perfect customers. They have sold to them, and these customers trust this other business. What would happen if, as part of this other company’s process, they recommended your service?
Do you think you’d get some more referrals from that? How many more, do you think? Would you get one, five, or 100 per year?
What if you have 12 referral partners? Hypothetically speaking, what if you had 12 referral partners and they each sent 20 referrals to you per year? Would 240 new customers in the next 12 months move your needle? It sure would move mine.
Take a second to think about this. Let’s say, for example, you were an attorney who wanted to get referrals from chiropractors in the state of Idaho. There are roughly 1,000 chiropractors here. If you did some good marketing over the next 12–24 months, you might get 40 chiropractors to refer 100 percent of their car accident patients and two dozen more chiropractors to refer you sporadically in their car accident cases.
How much more money would you make?
It’s not like you’re asking for the world. Forty referral partners would only be 4 percent of the chiropractors in Idaho. The other 96 percent could hate you and it wouldn’t matter because you’d be getting daily referrals — even multiple referrals per day.
The Power of Partnership
Let’s say the average settlement was $10,000 per case, and one-third of that went to you as the attorney. Let’s also estimate that each referral partner could only send an average of two cases per month. Your gross profits would be $266,666 per month. Most attorneys would be thrilled with even half that number.
In your business, what’s the average annual value of a customer to you? What if you could get 20, 40, 80, or even 100 more of those customers per month? What would it do for your business and life?
That is the power of the referral partner.
A company I do a ton of work with is called Infusionsoft. In April, they added 1,200 new customers with over one-half of their new business coming from referral partners. All the big companies use this strategy, but most of us smaller guys don’t, which is crazy.
I hear from people on a semi-regular basis who want to be referral partners with me, and one major mistake I see is their approach.
The Wrong Way
I currently have one guy who is working hard to be our partner, but in all the wrong ways. He called me 7–10 months ago, and at first, he said he wanted to send us business. Great! I jumped on a call with this guy, and we had a good conversation, but what he really wanted was for me to refer him … the old bait and switch.
Do you think we referred him to anyone? Nope! Now, I totally screwed up and didn’t take notes in Infusionsoft, so a few months ago, he called in again. My executive assistant, Karli, saw the notes about him being a potential good partner. I had time, so she booked him on my calendar. I took the call, realized what had happened, and ended the call rather quickly. He still just wanted to chat about himself and how we could earn money by sending him customers.
That approach is never going to work.
The Right Way
If you want partners, you need to give first before you receive. You need to send a referral or provide something of value to help them before you ask. You have to build a relationship.
There may come a time when people are beating a path to your door to be your referral partners, but that won’t be for a while, so be prepared to help a lot of people. After you’ve built those relationships, watch the referrals roll in.
Whatever you do, don’t walk in asking for referrals from them first. It is lame and won’t get you far with most people.
Cultivating referral partners is not an overnight success strategy, but personally, I like it the best. If you can create a marketing strategy that is difficult to replicate, your competition will never catch you. If your marketing strategy is to use Facebook ads that anyone can do, it is easy for your competition to replicate that and copy you.
On a side note, that’s one of the things I love about newsletters: They’re hard to replicate, and your competition doesn’t know you’re using them.
If referral-partner marketing sounds like it could be a win for you and your business, head over to DailyReferrals.com. I have an on-demand training video you can watch for free, where I walk you through more details of creating and marketing a referral-partner program.