Step 8 of Building a Better Business: Build Strong Networks for Referral Generation in Your Business
Referrals are a powerful means of securing new business, and one effective way to generate them is by building strong networks. Networking and referrals offer a cost-effective strategy for business growth, with a potentially significant return on investment. Here are five ways to maximise referrals from your networks:
Calculate the Lifetime Value of a New Customer
- Determine the revenue expected from a new customer.
- Consider rewarding them for repeat business, fostering positive word-of-mouth.
- Calculate the lifetime value using this formula: Average transaction value x average number of transactions x gross profit margin x customer lifespan.
Identify Complementary Businesses
- Find businesses with shared interests in your customer base.
- Establish an informal group for regular meetings.
- Collaborate with professionals who aren’t direct competitors, encouraging reciprocal referrals.
Practice the Law of Reciprocity
- Give more to your networks than you seek in return.
- Cultivate the habit of referring others, triggering reciprocal referrals.
- Express gratitude to those who refer business your way.
Discover Target Client Hangouts
- Identify networks where your potential clients gather in large numbers (e.g., BNI, Rotary, Chamber of Commerce).
- Join relevant networks to immediately tap into referral opportunities.
Engage with Non-Profit Organisations
- Choose organisations aligned with your passion.
- Avoid overtly promoting your business; focus on genuine involvement.
- Build trust by wearing branded clothing and subtly displaying signage.
Remember the wise words of Keith Ferrazzi: “The currency of real networking is not greed, but generosity.”
Take action today to expand your network and optimise your referral potential. What steps can you implement right now to build strong networks?
On Tuesday 13 February from 8-9am, Sharp Accounting will be running our Building a Better Business in 10 Steps Seminar. This will be held at our offices here in Ballarat. Click here to find out more and register at no cost.
