Marketing mastery: Creating profitable referral relationships

May 30, 2017

May 22/29, 2017: Volume 31, Issue 25

By Jim Augustus Armstrong

 

(Second of three parts)

Screen Shot 2017-03-06 at 10.45.16 AMIn part I of this segment, I outlined the reasons why developing referral relationships with other businesses is such a powerful and important strategy for growing your business. I also presented two strategies for developing these relationships. Here are some additional ways to create these referral relationships.

The 3-step system
Step 1: Send letters to 10 business owners with whom you might want to work.
Realtors, designers, remodeling contractors and carpet cleaners are a great place to start. Make sure these companies have good reputations. Tell them about your business and that you would like to meet with them to discuss the possibility of developing a referral relationship. The letter should include a grabber to get their attention and set you apart. I’ve used dollar bills, lotto scratchers and dozens of other enticements. Always tie the letter in with the grabber.

Step 2: Call the business owner. Don’t try to sell him anything during this call. Your only goal is to schedule a meeting to discuss the possibility of working together to help each other grow.

Step 3: The meeting is where you establish the relationship. Make sure there is a synergy between the two of you and ensure you can work together. You don’t want to partner with a jerk. Discuss each others’ goals and what a mutually beneficial relationship would look like. Ask if you can stop by his place of business and leave business cards or other information.

Nurturing the relationship
Let’s say you begin a relationship with an interior designer who owns a brick-and-mortar store and has four designers on staff, plus a receptionist. You want to make friends with every one of her employees, including the receptionist, because these people will send you the majority of referrals. Stop by her business and introduce yourself to her staff. Bring cookies or other treats to leave behind. Leave a business card holder full of your cards on their front counter so they can give them to clients.

Don’t assume these people will remember you. Within a week you’ll be forgotten unless you continue to nurture the relationship. Subscribe each employee to your monthly newsletter. If there are seven people who work there, send seven newsletters personally addressed to each employee.

Drop by their business every month or two with goodies. If they are sending you a lot of referrals, send in lunch for the entire staff. Drop by around the holidays with seasonal treats.

Your goal is to become a hero to the business owner and the entire staff—to be their friend. You’re doing this for one sole purpose: When one of their customers needs flooring, they’ll instantly think of you and you’ll get the referral.

This may sound like a lot of work, but consider these numbers: Let’s say your average ticket is $3,500 and you have referral relationships with 20 businesses, each sending you a paltry four referrals per year. This equals $280,000 in revenue with few marketing costs. Imagine if you developed 40-60 referral relationships. You could easily add $1 million or more to your annual revenue.

In part III I’ll reveal creative ways you can do affiliate marketing with businesses who send you referrals.

 

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