Building a Referral Network: How To Generate Leads Using Connections

Whether you’re a small business or a sales professional, recommendations are vital to the growth of your company and sales, which is why it’s so important to build a referral network – a network of businesses or fellow sales professionals that target the same audience as you do but fulfill different needs so they aren’t competing with you. Here’s why you need to start building your referral network as part of your lead generation activities.

Defining a Referral Network

A Referral Network is a formal or informal group consisting of various individuals or companies that provide referrals for one another. In short, this mutually beneficial structure builds upon existing customer satisfaction, creating a web of connections that provides value to every party involved. 

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“Do I Need A Referral Network?”

86% of companies with an adopted referral program have increased revenues over the past 2 years, so in answer to “Do I Need A Referral Network?” Absolutely.

Any business that shares your target audience but isn’t crucially a competitor is an ideal connection for a referral network. They’re instrumental if you can identify complementary businesses to your own; for instance, if we consider real-estate brokers, they should be able to refer customers to moving companies.

In particular, it’s stated that 87% of Sales Reps, 82% of Sales Leaders, and 78% of marketers agree that referrals are the best leads you can get. Still not convinced? The benefits of building a referral network are pretty clear-cut:

Also read: 3 Online Professional Networking Tips ALL Salespeople Must Know

Free Advertising

Genuine connections are becoming the face of marketing, and when people talk – they boast of their satisfaction with your product or service, and suddenly, they’ve advertised your business for free. Testimonials are everything; they’re authentic and invaluable in generating new leads. So it’ll come as no surprise that relying on word of mouth will have a higher generation and conversion rate. 

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• How to Accelerate & Optimise Your Sales Cycle
• How To Use Clubhouse To Grow Your Business
• 15 Best Social Selling Books | Prepare To Join The Evolution of Sales
• Discover Vital Skills All Reps Need Now

Outside-the-Box Opportunities

In many industries, your success is usually based on who you know rather than what you know. Now, consider that if you connect with highly influential businesses in your industry, you will benefit from having access to their network of highly regarded organizations. An invaluable tool you wouldn’t otherwise have access to had you not built a web of connections.

Now, if we consider that you could forge a connection that opens up a whole host of opportunities from partnerships, leads, and joint ventures, the world is your oyster. However, be mindful not to jump headfirst into an opportunity without first conducting due diligence on the situation, aligning your goals to the project, and ensuring that it’ll actually benefit your business.

Also read: The Ultimate Guide To Selling To The C-Suite

Establish Your Reputation

Expanding your industry exposure will ensure you start to get noticed, raising your profile tenfold! Ideally, you want to solidify your reputation as a reliable, valuable, and knowledgeable figure – you’re aiming to become that business that automatically pops into other businesses’ heads when referring. Ensure you attend every networking opportunity available, whether in-person or virtually; you want to keep your business on the tip of everyone’s tongues. 

A Guide To Building Your Referral Network

We’ve defined the concept of building a referral network and even summarized the benefits – but now you need to know how to get started growing your own. We’ve collated a small guide of tips and tricks that you can use to further your business referral network. Be mindful that you don’t need to strictly follow these steps in chronological order – rather, implement them as soon as possible to start gaining even better business. 

Generate Leads Using a Referral Network from Tom Abbott, CSP

Get Involved

It would be best if you were a regular fixture on your industry’s radar; dedicating time to connecting with those relevant businesses is completely vital to building a referral network. Attend every industry event or trade show you can; you’ll be guaranteed to meet like-minded individuals.

Evaluate Existing Connections

It’s time to evaluate your strongest connections and, inevitably, your weakest. You need to really consider who is most relevant to your business; By organizing the value of businesses to your own sales cycle, revenue and exposure, you can then utilize this evaluation to decide where to apply the most attention. By investing time in strong connections, you’ll find that these connections offer the same reciprocity – creating solid foundations for future endeavors.

Share Knowledge

Sharing your knowledge will ensure you’re recognized by other professionals in your industry and will aid you in gaining authority in your network. Also, consider that you’ll increase your visibility within these circles by sharing only valuable information – not sales pitches.

“If you want to go fast, go alone. If you want to go far, go with others.”

African Proverb

Referral Checklist

Everything starts with preparation, and referrals are no different. You enter every sales stage with a specific approach, so consider building a checklist to ensure you can build a successful referral program. Consider using our points below to begin your own template:

1. Have you perfected your product or service?
2. Who’s your ideal customer?
3. Set achievable goals: What is it you want to gain? More revenue? Exposure? Influence?
4. Reward Loyal Customers

Excel Your Customer Service

This tip may seem obvious, but ensuring your existing customers are satisfied and well looked after can determine your referral network’s success. Not only are your customers more likely to return, but they might return with a friend! People talk, specifically when they’re looking for referrals – you want to be on the top of every customer’s mind.

Collaborate

It’s said that there are, on average, about two hundred connections behind every person, so wouldn’t you love to build a network of connections who know who you are and what you do?

Take our advice and examine your network; who’s complimentary and not a competitor? Then, start reaching out to people with a view of taking conversations online or offline to set a collaboration in motion.

Tom recently collaborated with 2 social media influencers (Natalia Wiechowski and Andreea Zoia) while visiting Dubai. They tapped into each other’s networks and created valuable videos shared on their respective platforms, thereby creating more revenue for all of us.

Next Steps

Looking to Increase Your Networth With Your Network? Perhaps you want to tap into your digital resources and learn How To Network Effectively Using Social Media.

Whichever your needs may be, here at SOCO Sales Training, we’re committed to sharing our knowledge of best sales industry practices.

This is why we recommend Our SOCO Coaching Program, designed for sales professionals, sales leaders, and company owners looking to master the sales skills needed to transform their results.