Developing a referral network is one of the most effective ways to bring in a reliable and highly profitable lead source. Not only do referrals tend to convert at a higher rate than leads from other sources, but they're also more likely to refer themselves.
To help you develop a referral strategy, in this article, we'll explain how to:
- Audit Existing Connections
- Identify Networking Opportunities
- Leverage a Contact Management System
- Watch for Authentic Engagement Opportunities
- Adopt Check-In Cadences
By the end, you'll have a framework to start generating consistent referrals.
1) Audit Existing Connections
The first step in building a referral network is to audit your existing connections for people you'd like to develop a more mutually beneficial relationship with. Chances are, you have lots of LinkedIn connections and other contacts that could become a part of your referral network if you invest the time.
There are a variety of ways to approach auditing your connections. Here are some examples:
- Review reports of former clients. If they left on a positive note, they might be an excellent candidate to check-in with and, if that conversation goes well, ask for referrals.
- Review LinkedIn connections that fit your target. You can do this by sorting your contacts by the characteristics that would make someone a potential fit, such as working in your target market, being located in a critical geographic area, etc.
- Review reports of current clients and ask your account managers which ones are happiest with your offering. There's a strong chance that they will send referrals when asked.
Review any other repository of contacts and follow a similar process of determining who would be a good fit and adding them to a list to reach out to.
2) Identify Networking Opportunities
To develop a strong network, you need to source new referral partners regularly. In a mostly remote environment, finding valuable networking opportunities can be challenging since fewer options have 1:1 conversations. However, if you do your research, there are still plenty of ways to gain new connections.
Here are a few factors to look for when trying to find high-impact networking opportunities:
- The use of break out rooms or some other system to allow people to break off into smaller group conversations at larger events. This increases the likelihood that you'll have a chance to have meaningful interactions with others at the event.
- Online networking groups where your targets share ideas and best practices. Getting involved in those interactions, even if it is just commenting on others' posts, opens the door for you to start conversations with key contacts.
- The overall engagement level of the networking opportunity relative to others in the industry. Focus your attention on the ones where you're most likely to walk away with a couple of key connections.
After you've engaged with each networking opportunity, note its effectiveness. Over time, you'll hone in on the best options to source your target connections.
3) Leverage a Contact Management System
One of the most underrated strategies for developing a referral network is using a contact management system. Keeping all of your contacts stored in one place makes it easy to track your interactions, so you know when to reach out and who your most valuable referral partners are.
If you're currently using a CRM for your sales pipeline, create tags that allow you to separately track referral partners.
Include details such as:
- What other types of relationships they have with your/your organization. Ex. Customer, former customer, former employee, affiliate partner, business connection, etc.
- Dates and notes for all interactions
- Who they've referred
This information can provide insights into the characteristics and value of your referral network.
If you don't already have a contact management software, here are three strong options to consider:
- Affinity: This is a tool designed for networking and has built-in features that help you identify new networking opportunities. It's great if you want a simple app and don't need many advanced reporting capabilities.
- Monday: This is a highly customizable software that can be used to manage every aspect of your referral network, from staying in touch to managing the pipeline of leads they refer you. It's best if you're willing to invest the time to create a set up that perfectly fits your workflow.
- HubSpot: The best part of HubSpot's CRM and sales automation tools is its scalability. If your budget is tight and you only need simple features, you can get by on a free or low-cost plan. As your referral network and overall pipeline grow, you can upgrade to more robust features.
As you're evaluating different options, consider which one will be easiest for you to adopt based on the scope of features and intuitiveness. The goal is to find a tool that you'll incorporate into your daily workflows.
4) Watch for Authentic Engagement Opportunities
The most authentic way to keep your referral network engaged is to connect with people about the topics that are important to them.
There are two ways to do this:
- Scan LinkedIn, Twitter, and any other social networks you use for posts from connections who have offered you referrals in the past or who you would like to get a referral from. Respond to any posts that you can authentically comment on and send a message whenever you see an opportunity for a broader conversation.
- Monitor the news, industry blogs, and other platforms for content relevant based on your connections' interests, pain points, and/or companies and use it as a conversation trigger. Look for new information to increase the likelihood that your connections haven't seen it and will appreciate you sharing the insights.
Leveraging social media and relevant content helps you stay top-of-mind with your network by showing that you support their goals and interests. When the time comes to ask them for a referral, they're much more likely to speak positively on your behalf than if you hadn't worked to maintain that rapport.
5) Adopt Check-In Cadences
It's far easier to achieve your goals by working with your existing referral network than relying on a consistent pipeline of new partners. Thus, you don't want to rely solely on spontaneous social media interactions to sustain your relationships.
To ensure you're connecting with everyone in your network a couple of times a year, set up trigger-based check-in reminders in your CRM.
Triggers can include any reason to reach out that you can attach a future date to, including:
- Agreed upon next check-in dates
- Anniversaries (work and personal)
- Product launches & other company milestones
- Achievement derived from past referrals
- Attending an industry conference
Whenever you have a conversation with someone, look for additional triggers you can add so that you have various reasons to reach out.
Over time and depending on your referral network's size, your check-in reminders will become increasingly frequent so that you'll have a couple of people to reach out to every week. This system makes it easy to develop a habit of continuously fostering your referral network.
About the Author: Emily leads Prialto's content production and distribution team with a special passion for helping people realize success. Her work and collaborations have appeared in Entrepreneur, Inc. and the Observer among others.