How to Build a Referral Based Business

Most small business owners know that the best customers and clients come from referrals. These leads usually require the least amount of “selling”, they convert better, and are usually less price conscious than cold leads or inquiries. Here are some no cost methods of developing a powerful business referral network.

Let’s look at some potential sources for acquiring referral based business. Some are well known (but rarely used), while others are very practical but surprisingly “out of the box” for most business owners. And even if you’ve used the strategies below, most of us aren’t consistent in our efforts to build this part of our business. And if that’s you, it’s costing you money!

• Companies that might traditionally be considered your competition.Ex: You’re a contractor, manufacturer or (fill in the blank). You work on smaller or less complex or costly projects. A potential client inquires with you about a larger job beyond the scope that can provide. Have 1 or 2 sources that you can refer them to with the understanding that the larger company will do the same for you. If you’re a larger company, do the same with jobs that you aren’t interested in pursuing because they’re too small. If you’re a retailer, you can utilize sources that offer products you don’t and vice versa.
• Teaming up with complementary businesses to market your companies together.Ex: You’re a baked goods distributor that supplies the food service industry. Team up with vendors that supply other products that these clients purchase (dairy, meat, office supplies etc.). Or, you’re a financial planner or business consultant. Network with accountants and attorneys that assist the type of clients that you can help. A car repair shop can refer to a tire store or vice versa. The possibilities are unlimited.
• Owners (corporate level) and reps (street level).Whenever possible work directly with the owner. If that’s not possible, you and your team should seek out opportunities to develop referral relationships with commission based sales people that have direct customer contact and a financial incentive to grow their book of business.
• Referral partner business website or physical location.Get listed as a trusted partner on your referral partner’s website (if they have a page set up for that). Ask for permission to leave business cards, flyers or other marketing materials at their physical location when appropriate.
• Find targeted spheres of influence on social media and make comments that are respectful and helpful, that highlight your expertise on their blog or Facebook page. LinkedIn can be a great resource for professionals if worked properly.
• BNI International, Chamber of Commerce, Networking functions, trade shows or similar business networking groups or associations.
• Work your customer/client database. Consistently communicate with them, monthly is usually optimum with a newsletter, email, updates or friendly branding message. The best time to ask for a referral is right after a client or customer has complimented your work. If you’re communicating with a client and their raving about you, your product or service, take a moment to genuinely thank them for their praise. Then casually mention that you’re always looking for an opportunity to help others, and ask them if they know of anyone that might benefit from your product or service.

Discovering how to build a referral based business and following a plan to build one is one of the wisest decisions you’ll ever make as a business owner. Building a referral based business should result in a substantial increase in your business revenue for many years to come!

Call Mulligan Funding at 855-326-3564 to discuss your financing options today!

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.