How to Increase Sales through Business to Business Referrals
I don’t often write about marketing because it’s not my area of expertise but I wanted to write about a practice I would see when I worked for a small, local business. The method of partnering with other businesses to send each other referrals provided a solid stream of new customers for the business so I I thought I’d share my ideas on it and how it can be done. This marketing method is not new or unique and there are likely many other article out there that cover it in great depth. These are just my thoughts.
Referrals are a great way to increase sales. By increasing leads, you’re able to demonstrate your expertise to potential clients that you otherwise would not. However, “word of mouth” referrals are not always in abundance and your business should take measures to ensure that people are hearing about it. While customer referrals are certainly helpful, it’s not always the easiest to manage. If you’re in an industry that providers products or services that people only need on a very limited basis, incentivizing referrals may also prove to be difficult because sending friends or acquaintances your way might not be too high on a customer’s to-do list. Therefore, business to business (B2B) referrals are a method by which you can dramatically increase leads by teaming up with other businesses. Here’s how:
Determine Your Target Client
Assuming you’ve identified your niche field, you must also identify a target client or customer. Who are they? What do they need or want? How do they search for it? Write this information down in a graph, spreadsheet, text editor, or anything that lets you organize it and keep track of who you’re targeting. This way, you can refer back to it in the future.
Research Local Businesses that Offer Similar Services
Now that you’ve determined who your target client is, what they need, and how you provide a solution, seek out other businesses that offer complimentary services (not too similar or identical). For example, if you run a local tax prep business, some potential compliments to your services might include attorneys. Legal and financial services are similar yet distinct and both could benefit from being able to refer the other.
Propose a Referral or Affiliate Relationship
Now that you’ve found some potential compliments to your business, contact the owner or manager and propose a businesses relationship that will include business referrals and/or affiliation. This relationship can include a link exchange (great for SEO) and reciprocal advertising on each others’ websites. I’d suggest avoiding financial compensation for referrals and advertising unless you’re proposing an affiliation for online-product sales. The goal is to approach this person in a simple way and keep things as easy as possible. You may have to explain why such a relationship would be beneficial to the business your pitching to so make sure to have answers to some likely questions (What are you proposing? How does it work? How can I benefit? What if it doesn’t work out?…).
Agree to Special Offers for Referred Business
Simple business referrals may work but it’s helpful to have a special offer your referrer can offer their clients or customers. By being presented with a special offer, these customers will have more of a reason to purchase from you (a coupon can be more enticing than a simple, verbal recommendation). A good example may be 25% off tanning services at XYZ Tanning with a haircut from ABC Hair Salon. Come up with an incentive for your referrer’s clients that is suitable for you.
Give Your Referrers’ Clients Priority
Why? Because when they visit your store or contact you about your product/service, you aren’t only representing your business; you’re also representing your referrer. It goes both ways so make sure that you communicate this with whatever business you partner with. You wouldn’t want your customers putting up with crappy service from someone you recommended because they’ll remember who sent them there. Appreciate their patronage (even if it’s at a discount) because your referrer is sending people through your doors.
Now Get to Work
Referrals are a fantastic and powerful tool to generate leads for almost any business. Evaluate your current methods for generating leads and determine how you stand to gain from a referral plan. Make sure to follow the steps above and enjoy the results!