Building Business by Referral: How Does It Work & How Does It Help

Building Business by Referral: How Does It Work and How Does It HelpBuilding a strong business referral network is a crucial component of a successful marketing strategy. It’s the same concept as word-of-mouth marketing from customers, except business referrals provide an expanded reach for your business that’s difficult to establish alone. If you are new to the business referral concept, you probably have many questions about how it works and how it can help you grow your business network.

What are Business Referrals, and What Can They Do for Your Business?

Referrals are a recommendation for a business, product, or service. You’ve likely given referrals yourself when you find a great contractor, a talented hairdresser, or when a friend needs an attorney. Business referrals are similar. The main difference is that a business professional typically gives referrals directly to a potential customer by recommending products or services from a professional who they know and trust. Over time this will organically help you grow your business.

Building Your Business Referral Network From the Ground Up

Often you don’t have to look any further than your own backyard. Establishing connections in your community will help you become known as a reliable, trusted business person in your industry. Participating in local networking events also provides opportunities to expand your business reach to surrounding areas or nearby towns and cities. You may have to try different groups and events to find one that best suits your needs. Creating lasting connections with other professionals in your area doesn’t happen overnight.

How to Grow Your Business By Referral

Growing your business by referral also requires you to put in the time and effort to maintain it. Regular networking with the same professionals you rely on for referrals is one of the easiest ways to keep a strong network while improving your professional development.

It’s also essential to reward your referrals to encourage future referrals. It doesn’t have to be monetary or tangible. It can be as simple as sending a personalized thank-you email or offering free merch after reaching a certain number of referrals. One of the most effective ways to bring in referrals from your business connections is by recommending their services to your customers and contacts.

What to Ask for From Business Referrals

In order to expand your reach, you need to know how to guide the conversation in your favor. It’s important to understand how to ask questions and, more importantly, how to ask the right questions when building your referral network.

A few quick icebreakers are ideal for starting the conversation with a potential new business referral. Ask where they are from or what line of work they are in. When expanding the conversation, keep in mind that open-ended questions allow for unlimited responses and provide more detail than closed-ended questions. Don't forget to ask for contact information from those who might be a good fit to help you expand your business reach.

For regular, dedicated networking opportunities across a wide variety of locations, join 4BR's business networking groups. Our groups are composed of professionals across industries who are focused on building effective networking connections. See what groups are in your area and get started with 4BR.

Building a strong business referral network is a crucial component of a successful marketing strategy. It’s the same concept as word of mouth marketing from customers, except business referrals provide an expanded reach for your business that’s difficult to establish alone. If you are new to the business referral concept, you probably have many questions about how it works and how it can help you grow your business network.

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