The process of starting a new business can be very overwhelming, but one thing that doesn’t have to be is building your referral network. It can be your most powerful source of new business and increased revenue and a critical piece of your small business identity. According to a study conducted by my company, Manta (an online communities dedicated to small businesses), more than half of small-business owners get their biggest boost in business from referrals, which in turn leads to a boost in profits.
The following five tips will help you build your referral network.
1. Stay in touch with your local community. You might be surprised to learn how many other small-business owners live in your area. Stop by their stores and introduce yourself. Does their business’ value proposition fit yours? If so, strike up a conversation about doing a ‘Shop Local’ partnership during the holidays this year. For example, if someone buys goods at your store during a certain time period, they get a 25 percent off coupon for your neighbor’s store. Building and then strengthening relationships and partnerships with other small-business owners in your local community can only help drive business for you and the rest of your peers.
2. Be active in online forums. Your online presence is immensely important, not only because it’s where many of your customers are searching for products and services, but because it’s also where small-business owners turn for information. By joining a small-business forum online, you’ll be able to gain insights from other entrepreneurs, engage in the group's interactions, post comments and also share what you know. Other business owners in the group will start to notice your activities, and if they like you and what you do, they will add you as a business contact or ask to learn more. This alone is incredibly valuable and promotes online word-of-mouth about your business among potential customers and partners alike.
3. Be unconventional. Be on the lookout for unique networking opportunities to grow your referral network in new ways. Think about it, in your everyday life, you are constantly on-the-go meeting new people. Why not use it as a form of networking? Use those pesky waiting lines at the DMV to strike up a conversation with someone else in line and see if it makes sense to mention your business. Other great places to start a dialogue include on an airplane or even at your local grocery store. Be friendly, outgoing and talk to the people around you. You never know what connection you might make for your business.
4. Join social networking sites. You’ve heard it before, but I’ll say it again—build your referral network and online presence through social networking sites. It’s really important to join the right networks for your business where you can help other small-business owners and they can help you in return. Networking sites are great places to grow your customer referral base, but these sites also provide a unique mentoring opportunity. You can connect with small-business owners who don’t live in your local community, but may run similar businesses and can share advice on what has worked for them.
5. Follow up. This is an important element of both building and strengthening your referral network. Regardless of the type of networking, the key is quickly turning those new contacts into active connections in your network. Do this by practicing 24-hour follow-up. Reach out to new contacts (via e-mail is easiest) within a day of first meeting them. Mention the specifics of your conversation and the next steps you discussed. You both will appreciate the quick turnaround and now your network is one-person stronger
These are just a few easy steps to get you started on the road to building a powerful referral network. The sooner you get going, the more connections you’ll make, which will help you grow and build your business.