Getting Referrals for Your Ethical Business
Four Types of Referrals to Grow Your Business
Over the years, I’ve provided marketing coaching on an hourly basis. Some clients also asked for help with launching their startup websites… After a dozen requests for coaching and training, I finally have my marketing coaching for ethical entrepreneurs with startup businesses! One of the main advice I’ve given is the need for an effective referral network.
A service provider in Vancouver, Canada can hustle hard and earn about $100K per year alone with hourly rates for consulting and / or coaching. But to exceed an annual income of $200K, $500K or more, there needs to be a back-end system for multiple streams of income. This revenue may start off small, but can grow with significance by leveraging the internet and online automation tools with a startup online.
If you are in a service business – and 84 percent of the U.S. economy is service based, then referrals are the keys to your success. An effective referral strategy can make a huge difference when you’re new or if you don’t have an email list or social network. My first experience with referrals was through Barterfirst.com and I’ve been a loyal member for over 10 years!
Your referral strategy needs to be in place to consistently receive high-quality referrals. Shift away from looking for prospective clients in the short-term and start developing long-term relationships with referral partners.
Examples of Referral Types to Grow Your Business
The first step is to understand the difference between a referral source and a referral partner. A referral source is anyone who sends you prospective clients. These are often random referrals without consistency and are not necessarily of the best quality.
However, a referral partner has the intention of helping your business and is a formalized source of receiving referrals. Seeking referral partners is a good start towards receiving referrals in a consistent manner. There are several types of referrals:
Reciprocal Referrals: In order for both parties to benefit with reciprocal referrals, each partner must have the same opportunity for sending referrals and must be a non-competing industry.
Example 1: Realtors partnering with mortgage brokers, interior decorators with artists or business consultants with marketing consultants.
Ambassador Referrals: Ambassadors do not have similar expectations of receiving reciprocal referrals. The ambassador is expected to send referrals over to the other party but does not expect as many or any referrals in return. The party who sends referrals is usually a hub or center of influence that comes in contact with a lot of people within a specific target market that fits with the receiving business.
Example 2: In Vancouver, the Downtown Business Improvement Association has an Ambassador program where they actively make introductions for member businesses to facilitate new relationships.
Client Referrals: Your own clients can offer good recommendations for your business. The key to this is to develop a system that encourages cooperative effort from your existing or past clients. There are different methods to build on your client relationships.
Example 3: To get your clients to refer you new business, invite them out for lunches or another special event. Or offer a gift card or other recognition.
Barter Referrals: Contemporary business-to-business (B2B) barter clubs are trade exchanges, often within a region and contribute to the development of a social, public and cooperative economy and impact on the local economy and community. This leads to greater survival for local businesses and positive social impact on the region.
Facilitating Member Trades
B2B barter clubs or trade exchanges are not one-to-one trades, but are a computerized system of “units” which makes bartering easy for its members. They typically charge membership and transaction fees to provide promotion and facilitation of sales and purchases among its members, thus forming a network among its members. They can also print their own checks, issue their own credit cards, distribute their own scrips (vouchers or gift certificates), make loans with interest, and provide other alternatives to the cash economy.
Improving Cash-flow With Barter
B2B barter clubs or trade exchanges have the objective of increasing trade among business members with a simple barter credit system model. One of the unique features of B2B barter clubs or trade exchanges is the ability of members to spend barter credit towards personal consumption, thus raising the standard of living for its members. For example, I spend barter dollars I earned from editing and marketing, on restaurant meals, designer clothing, web design and other services and products from members. This helps me to save cash on expenses.
Minimizing Business Risks with Barter
In addition to trading on the regular goods and services of a business, a barter club or trade exchange enables its members to test out new ideas, before spending a lot of time and cash on the new business. This early market validation for a startup can help determine if the new venture will be successful. If none of the barter members (captive market) are interested in a service or product, chances are there may not be enough demand in the local economy too.
Example 4: First Canadian Barter Exchange (FCBE) aka Barterfirst.com with over 600 members in Metro Vancouver has been in business for over 18 years resulting in stability amongst its membership base. Most of the members have been with them for many years because FCBE acts as a trusted referral agency for exchanges between members and this increases the likelihood for successful transactions.