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Building A Referral Network

5 Sep, 2006 By: Howard Meltzer imageSource

Building A Referral Network

Most dealers that I work with across the country place very little emphasis
on one of their most productive sources of potential sales: referrals. Those
that do encourage the practice, and the investment among their sales force,
swear by the results. And, in some cases, they even require involvement in local
groups as part of their prospecting agendas.

Statistically, every person you meet knows 250 other people. The odds are
pretty good that some of these people are legitimate prospects. The trick is to
narrow down the base by cultivating business contacts that have an interest in
developing referrals that benefit both parties. This can be accomplished in many
ways starting with your normal prospecting activity that will inevitably develop
kindred spirits that are willing to help you expand your referral base. These
become primary sources and should be cultivated carefully and on a reciprocal
basis. As Stephen Covey states, "Seek first to understand and then to be
understood." The objective for close contacts is knowledge, and for distant
contacts, money.

The second level of developing a network is to cultivate business development
and non-profit groups such as the Red Cross, United Way and American Heart
Association. To be most effective you must get involved on committees. The
Chamber of Commerce can also be a productive organization for contact
development in proportion to the amount of involvement you provide. Civic
organizations such as the Rotary or Kiwanis are also great for getting involved
in the community.

There are also those organizations such as "Business Network International" (BNI)
and "LeTip" that are specifically structured to develop mutually productive
referrals. Both can be found on the Internet.

Basic Techniques

No matter how you choose to develop referrals there are a few basic ground
rules common to every method that’s worth noting:

  • Choose the right groups and events. Don’t waste your time attending
    conventions of Fortune 500 companies if you are looking for individual
    business owners.
  • Focus on quality contacts versus quantity. Don’t be the person at an event
    who, while talking, keeps his eyes roving around the room seeking his next
    victim. The rule of thumb is to make between two and five new contacts at each
    networking meeting. Focus on the quality of the connection and people will
    become much ore trusting.
  • Many people are anxious during public events. Quickly put your contact at
    ease by asking about their business, listening intently to the answers. This
    will create solid ground for them and make it easier to develop a meaningful
    conversation which is the whole point of the contact – and a meaningful
  • Be prepared to clearly state what you do. Develop a ten second
    introduction as well as a thirty second presentation. The introduction
    explains what you do and for whom. It also should be designed to prompt
  • Follow up after the event. Preferably the next day, send a handwritten
    note to each person that you met including a reference to something that the
    two of you discussed. It should express your interest to stay in contact.
    Include a business card.
  • Within two weeks, contact the person and arrange a meeting for coffee or
    lunch. This will generate a more in-depth discussion of your businesses, their
    challenges and how you could potentially help them. It is not, however, a
    sales meeting – it is for relationship building.

Your Primary Networking Tool

The single most powerful networking tool you have available is your business
card. It is compact, energy-efficient, low cost, and keeps working on your
behalf for hours, weeks and even years after it leaves your hands! For example:

  • It tells people your name and the name of your business.
  • Provides prospects with a way to contact you.
  • Gives others a taste of your work, style and personality.
  • It can take many forms that are unusual, attractive, strange, charming or
    funny; but should stick in the mind like a good TV ad.
  • It is reusable as it passes your message from person to person.

The two main functions of your card are to gain business from the person you
give it to, and to get your name out to other people whom that person comes into
contact with. Like all good tools, there are ways to best utilize their

1. Don’t leave home without them. Keep a small box in your car as a backup.
Be sure to have a few in your jacket pocket, briefcase, wallet and computer bag
just to make sure you never run out. Be sure to keep an eye on your supply to
avoid running out before you reorder.

2. Be sure that your networking partners have a supply of your cards on hand
to pass out on your behalf.

3. Whenever you communicate with someone in writing, enclose a card if it’s
appropriate to the occasion. Enclose several cards in every packet of sales
material you mail out.

4. When handing out your card, hand-write something on one side such as your
cell phone number or a secondary e-mail address, etc. This will give you a much
better chance that the recipient will hang on to it. At the same time include a
few extra cards for your contact(s) to pass along.

5. If you need to record information such as phone numbers during a contact,
be sure to write it on one of your own cards to avoid the impression that the
other person’s card is of no value.

Proper and thorough utilization of the small 3" X 2" business card as part of
a professional networking program is powerful in that it will advance
relationships and improve both short and long term sales. It’s worth the small
effort it takes to ultimately enlarge your profits.

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