Business Networking and
Referral Marketing
Presented by:
Martinsville-Henry County Economic
Development Corporation’s
Office of Small, Minority, &
Entrepreneurial Business Development
What is Referral Marketing?
• When starting your business, where did
your first clients come from?
• Did people already know you and trust
you because of your prior business with
them?
• Did you use your network of contacts to
gain business for you company?
• If yes, then you are referral marketing.
Network of Contacts
• Collection of social capital that you
accumulate everyday!!!
• Family, friends, business associates,
suppliers, members of your social groups,
Church groups, neighbors, Chambers of
Commerce, networking groups (like Lisa’s!),
etc.
• In-Rolodex Selling.
• Metcalfe’s Law: The value of a network is
directly proportional to the square of the
number of its connections.
Getting Quality Referrals
• Requires you to plan and organize your
contacts into manageable parts.
• Not all contacts will be equally profitable
(e.g. Family Members and Friends!).
• Prioritizing and targeting your best
contacts within your network is a useful
investment of your time.
• Five step process.
Step One: Identify and Prioritize
Order your contacts:
1. People in your current Contact Sphere.
2. Satisfied Clients and Customers.
3. People whose business benefits from yours.
4. People with who you do business.
5. Business co-workers, present and former.
6. Members of business groups you belong to.
7. Fellow members of social and religious
organizations.
8. Family, friends, teachers, mentors and coaches.
Step Two: Identify Patterns and Break
Down into Subcategories
• Notice the patterns that develop expose the
strengths and weaknesses of your network.
• The quality of this list is in direct proportion to
your current networking skills.
• Break the list down into three sub-categories:
– Your Information Network: Those people who can help
you with knowledge, experience, and expertise.
– Your Support Network: Those people who can offer
emotional, physical, spiritual, and financial support.
– Your Referral Network: These are people who have the
resources and connections to pass you potential
referrals.
• From this list, focus on customizing your network
to your market.
Step 3: Determine Your Contact
Sphere
• To determine your Contact Sphere:
– Look at sources readily available to you (Rolodex, daily
planner, PDA, etc.).
– Look at your supplier list.
• Make contact with the professionals you listed in Step 2.
• Establish a reciprocal relationship with the businesses that
have a best fit with yours. Compatible but noncompetitive.
• Offer “bird dog” fees when appropriate. Formalized referral.
• Become a “Referral Hub”. A Referral Hub is someone who
has an extensive resource list of referrals and shares them
generously. This takes time and a deep conviction to
becoming an exceptional referral marketer.
• “It’s not who you know, but rather, it’s who they know.”
You have no idea what your network can offer until you
start making the connections in a formalized manner.
• 6 degrees of separation (or in Martinsville 1)!!!
Step 4: Establish a Contact System
1. Select your referral partners.
2. Recruit your perspective referral
partners.
3. Educate your new referral partners.
4. Give your referral partners the tools to
take action.
5. Initiate contact with prospects your
referral partners give you.
6. Reward you referral partners.
Step 5: Expand and Diversify Network
• This is also known as “filling the gaps”.
• Look through Steps 1-4 and identify areas where
you need to make contact but do not have the
network.
• Fill the gaps through:
–
–
–
–
–
Existing contacts/referral partners.
Trade Associations.
Chambers of Commerce.
Informal Networking Groups (Lisa!!!).
Professional Networking Groups.
• Make sure any professional networking group
restricts access through non-competitive
membership.
Social Media:
Facebook, LinkedIn, and Twitter
• Today social media is a must for any business
(product or service based) no matter the size.
• It is a virtualization of network and referral
marketing.
• Asynchronous communication with individuals or
groups of individuals who choose to follow you
and your company.
• Viral: Messages, announcements, coupons,
advertisements are passed around
instantaneously.
• Test market and customer feedback.
• Example: Rising Sun Breads
Thank you!!
Cian Robinson
Robinson Ventures, LLC
cianrobinson@robinsonventures.com
W:276-880-7088 (must dial area code first)
C: 716-308-7357
Social Networks:
Professional: Linked In, Plaxo
Personal: Facebook, Skype