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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?

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business networking and referral marketing

Business Networking and Referral Marketing

Presented by:

Martinsville-Henry County Economic Development Corporation’s

Office of Small & Minority Business Development

what is referral marketing
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
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
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
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
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
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
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
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.
  • 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
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
Business Cards in the Fishbowl Trick

Drawing for the prize.