Business Networking and Referral Marketing Presented by: Martinsville-Henry County Economic Development Corporation’s Office of Small & Minority Business Development
What is Referral Marketing? • When starting your business, where did your first clients come from? • Did people already know you and trust you because of your prior business with them? • Did you use your network of contacts to gain business for you company? • If yes, then you are referral marketing.
Network of Contacts • Collection of social capital that you accumulate everyday!!! • Family, friends, business associates, suppliers, members of your social groups, Church groups, neighbors, Chambers of Commerce, networking groups (like Lisa’s!), etc. • In-Rolodex Selling. • Metcalfe’s Law: The value of a network is directly proportional to the square of the number of its connections.
Getting Quality Referrals • Requires you to plan and organize your contacts into manageable parts. • Not all contacts will be equally profitable (e.g. Family Members and Friends!). • Prioritizing and targeting your best contacts within your network is a useful investment of your time. • Five step process.
Step One: Identify and Prioritize Order your contacts: • People in your current Contact Sphere. • Satisfied Clients and Customers. • People whose business benefits from yours. • People with who you do business. • Business co-workers, present and former. • Members of business groups you belong to. • Fellow members of social and religious organizations. • Family, friends, teachers, mentors and coaches.
Step Two: Identify Patterns and Break Down into Subcategories • Notice the patterns that develop expose the strengths and weaknesses of your network. • The quality of this list is in direct proportion to your current networking skills. • Break the list down into three sub-categories: • Your Information Network: Those people who can help you with knowledge, experience, and expertise. • Your Support Network: Those people who can offer emotional, physical, spiritual, and financial support. • Your Referral Network: These are people who have the resources and connections to pass you potential referrals. • From this list, focus on customizing your network to your market.
Step 3: Determine Your Contact Sphere • To determine your Contact Sphere: • Look at sources readily available to you (Rolodex, daily planner, PDA, etc.). • Look at your supplier list. • Make contact with the professionals you listed in Step 2. • Establish a reciprocal relationship with the businesses that have a best fit with yours. Compatible but noncompetitive. • Offer “bird dog” fees when appropriate. Formalized referral. • Become a “Referral Hub”. A Referral Hub is someone who has an extensive resource list of referrals and shares them generously. This takes time and a deep conviction to becoming an exceptional referral marketer. • “It’s not who you know, but rather, it’s who they know.” You have no idea what your network can offer until you start making the connections in a formalized manner. • 6 degrees of separation (or in Martinsville 1)!!!
Step 4: Establish a Contact System • Select your referral partners. • Recruit your perspective referral partners. • Educate your new referral partners. • Give your referral partners the tools to take action. • Initiate contact with prospects your referral partners give you. • Reward you referral partners.
Step 5: Expand and Diversify Network • This is also known as “filling the gaps”. • Look through Steps 1-4 and identify areas where you need to make contact but do not have the network. • Fill the gaps through: • Existing contacts/referral partners. • Trade Associations. • Chambers of Commerce. • Informal Networking Groups (Lisa!!!). • Professional Networking Groups. • Make sure any professional networking group restricts access through non-competitive membership.
Activities • Handshake, eye contact, and elevator pitch. • Be shameless. Wallflowers do not close deals. • Ask for forgiveness and not permission. • Listen, listen, listen and identify the pain. • Get personal (Kids? Pets? Wedding ring? Need a date?). Look for hidden clues. • Be personable. Personality gets a 2nd meeting. • Get the business card. • Follow-up.
Fill Out The Form!!! • Contact 1: • Name: • Company: • Contact info: • Products/Services: • Personal info: • Contact 2: • Name: • Company: • Contact info: • Products/Services: • Personal info:
Business Cards in the Fishbowl Trick Drawing for the prize. THANK YOU!!!!