The Technique Professional Networkers Use To Generate Business From Their Network

We live in an age of fake news and fake reviews. As a result, the buyer has become more cynical, skeptical, and unwilling to believe something that doesn't come from a trusted source. For service-based professionals, it's taking longer to go from introduction to paying client and conversion rates from leads to customers are falling. So, it’s no surprise the cost to acquire a new client in terms of money, time, and aggravation has increased.

The most effective and efficient way to counteract these trends is by establishing and leveraging a network of advocates for your business with a reach you cannot develop yourself. Referrals from trusted sources shorten sales cycles, reduce customer acquisition costs, and attract more loyal customers. 

Referrals based on trust are significantly more valuable than those that aren’t and it’s very personal. You’ll know you have robust referral partnership when someone is willing to put their reputation on the line to give you a warm introduction or hot lead. 

Referrals from customers who can speak first hand to your value proposition are the highest quality and have the highest ROI. However, developing a network of trusted relationships with others that access your target market, can get you a significant number of introductions as well.

"Peer-recommended leads are 2.5x more responsive than leads generated by any other marketing channel".

-- The American Marketing Association --

"A referred customer has a 16% higher customer lifetime value."

--The Journal of Marketing--

This is why it's surprising that the majority of B2B companies don't have a strategy in place to consistently generate qualified referral leads. Most businesses take a passive stance on producing referrals resulting in not giving it the attention and time it takes to execute a well thought out program. 

Or is it not surprising at all? 

Getting referrals requires you to invest time in building a relationship before asking for introductions. The amount of trust you develop, how easy you make it to refer, how much recognition you give, and how top of mind you are will all determine how successful you are in receiving referrals. It's a long term strategy, and most companies are focused on short term gains.

Referrals fall into two categories: reactive and proactive. Both are important but have different strategies to make them successful.

Reactive referrals are generated as a result of learning of a need for a product or service and being top of mind with the person who learned of this need. In other words, two things need to happen for a reactive referral to occur:

1. Someone needs to be talking about a need they have
2. You need to be top of mind of with the person that is hearing about the need

However, a need may not necessarily be a pain point. For reactive referrals to be of value, the need has to be a pain point they are actively seeking a solution for. 

Most networkers rely on reactive referrals. Given that most referrals will be reactive, you want to ensure you have a clear plan for success by:

1. Knowing who you want to do business with, 
2. How you are genuinely different outside of price and customer service, 
3. What pain point you will solve for them, and 
4. The opportunity they will lose if they don't do business with you.

The secret weapon for professional networkers is a proactive referral. A proactive referral is a planned and well thought out introduction that requires people to collaborate to:

1. Establish a plan to introduce one another the way they want to be introduced
2. Make sure the introduction is remarkable and easy to make
3. Ensure that giving and getting are balanced

The time you spend receiving a reactive referral vs. a proactive referral is essentially the same. One is not better or worse than the other. However, the ROI is vastly different. In the first case, you will spend your time chasing leads, and you will need more of them to convert to reach your sales goals. In the second case, you will spend time educating your referral partners and arming them with the proper tools to make warm introductions. However, these referrals have a significantly higher conversion rate. Eighty-four percent of B2B decision-makers start the buying process with a referral, and those have a conversion rate of approximately 70%. At Centricity, our members have seen, on average, an 81.3% conversion rate because of the proactive referrals given. The return on investment is significantly higher with proactive referrals than reactive ones.

So why do more people not provide proactive referrals if they have a higher ROI? 

It takes work.

But, when did anything worth doing come easy?

Most referral strategies don't amount to much more than keeping your fingers crossed and wishing, hoping, and praying that someone will recommend you, out of the blue, to someone in their network. As we like to say at Centricity, we pray that magic will happen. 

A proactive referral requires effort. It takes most business owners and salespeople out of their comfort zone because it's no longer about them or features and benefits. They need to think about it from the perspective of the referrer. The person you are asking to make an introduction is doing you a favor, and it is your responsibility to make it easy and compelling for them to do so.

The ambitious and growth-focused professionals spend time working through this plan of action because they know the vast majority of dollars will come from these proactive referrals.

At Centricity, we educate, coach, and help B2B professionals build and leverage their network to get these coveted proactive referrals. But here are some strategies you can use to get started on your own.

Five Strategies You Need To Generate Proactive Referrals 

1. Engage in regular, high quality, outcome-driven, one-to-one sessions with each referral source. Each referral partner will be different. You need to understand which tools they need to ensure they can introduce you to potential clients or other referral sources. It is imperative that you collaborate on the best way of introducing you to the people you want based on the network they have. Otherwise, you won't get the kind of business you are looking for.
2. Make it easy for others to invite people in their network to learn about your solution. 
3. Don't leave anything to their imagination. Make it clear whom they should refer to you, how your referral process works, what your referral partner can expect in terms of recognition or rewards, and the next step.
4. Make your referral partner look good by providing immediate value to the person they referred you to. Provide value regardless of if they become a customer. Communicate this value to your referral partner.
5. Arm them with compelling, clear, and concise stories that make them look intelligent and like a go-to resource to their network. Don't drone on about features and benefits that won't knock out a competitor. If they don't see WIFM (what's in it for me), they will not be proactive in their introductions. Raising a person’s social capital with their network is worth more than any monetary incentive you can ever provide.

An advocate for your business who has a positive experience will be happy to refer you because of their social capital with someone in their network will increase. In other words, they will look like the hero for helping someone in their network solve a challenge they have in their business.

Engaging in this process and executing this strategy will take time and effort. But the rewards are significant in the long run. We have spent the last five years developing the strategy, processes, and tools for professionals who want to take their networking to the next level and generate business from their network. We welcome starting the conversation.