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

There are many different ways to grow a business. Your marketing, promotions, products, customer service, and so much more contribute to your success in both the short and long term. One avenue of growth that you might not be familiar with is business referrals. 

What are Business Referrals? 

Referrals are a recommendation for a business, product, or service. You’ve likely given referrals yourself, when you find a great handyman, a talented hairdresser, or when a friend needs an attorney. Business referrals are similar. The main difference is that business referrals typically are given by a professional directly to a potential customer recommending a different professional’s products or services. 

What is the Point of Business Referrals? 

If you’ve seen success with referrals from customers or your own marketing efforts in your area, business referrals can seem unnecessary. But business referrals provide an expanded reach for your business that’s difficult to establish alone and more regular referral occurrences than relying solely on customers. 

How Do Business Referrals Work? 

Business referrals are built on professional relationships between individuals or businesses in different industries. You don’t want to establish referral relationships with your competitors, that defeats the point of providing referrals for other professionals. You wouldn’t recommend a potential customer visit your closest competitor instead of using your own services. Instead, with professional referral relationships established outside of your own industry, you can take advantage of an entirely different customer base than your own. 

Referral relationships can be established with any professionals in your network. Typically, business referrals are a two-way relationship. Your connections keep an eye out for customers who may be interested in your services while you do the same with your customer base who may need services outside of your industry. When someone is in need of services or products that you offer, your referral connections will have you in mind to pass along your business card, website, or other contact information. 

Building a Sustainable Business Referral Network

The biggest component of finding success with business referrals is creating a robust referral network. You need to be connecting with a variety of professionals and maintaining those connections in order to build the relationships that lead to referrals. Establishing that network takes time, in the same way that making new friends or feeling at home in a new city takes time. One of the best ways to grow your network and use your professional time wisely is with networking. Networking can provide a regular opportunity to establish the connections that can become referral relationships. 

Look for networking opportunities where you’re meeting professionals outside of your own industry regularly. There are a wide variety of networking options out there. Try to narrow them down to find the best networking groups or events that will suit your needs. Some networking opportunities focus more on professional development or education than building relationships. Other opportunities include dedicated groups that help you build a strong referral network. 

4BR is an organization of referral groups that are designed to help business professionals see business growth with regular networking, professional development, and referral expectations. Join a 4BR group in your area today to get started with your referral network.