What we’re looking for in our business is profit, a good financial return on the investment we make. Marketing is the key investment we make to win the clients who will bring in that return on investment. And we measure what we put in, investment on a website, pay per click advertising costs, sales calls made, advertising costs etc etc And we record the results of these endeavours in conversions to sales. We then make decisions on where to invest further depending on where we’re getting the best return on that investment.
If we are looking for business by referrals we will record the costs of going networking in time and money against the business we receive as a result. We may even, if we’re really disciplined, record the referrals we’ve given and the referrals we receive. What many people are not good at doing is measuring all the other investment they make in that referral relationship.
When you do this is where it can get messy to interpret if you confuse the two outcomes you want from your referral marketing strategy.
For the business you want a profit- more out than you put in.
For each referral relationship you want equity- the same out as you put in.
Referral relationships are just like all our other personal relationships. They are built on trust and each person gaining what they want from the other party. This assumes that you know what the other person wants and that you have the ability to deliver it. Get that right and you will have a successful relationship.
So if you’re measuring the return on investment in your relationship, equity is what you are looking for and that needs a separate group of measures. We call it the Emotional Bank Balance and just like your money in the bank you have to put in before you can withdraw and, to stretch the metaphor further, negotiate an overdraft when necessary. So what kind of activities are you looking for in a referral relationship:
1. Time for you . Someone who makes themselves available for you, keeps appointments, invites you to activities you’d enjoy or find useful and comes to your events when invited, thinks about you and acts when opportunities for you arise in their busy day.
2. Information and advice. Someone who freely gives you information on the things that interest you or are relevant to you and your business.
3. Support and encouragement. Linked to the above ,they look out for your interests, and are there when it gets tough as well as when you want to celebrate. They believe in you and what you’re doing.
4. Business generation. The prime reason for this relationship is business so the other party needs to undertake activities that actively promote your business. At the highest level this would be direct referrals to people who need your services. However there is a whole range of other activities they could do on your behalf. From simple things like giving your blog space in their newsletter to more direct help with introducing you to key players within your target market.
Now for many people the thought of formally measuring this is daunting and/or appears manipulative. They instinctively recoil from measuring tit for tat in their personal relationships. They just “know” when it’s good and are getting what they want from the other person. Yet I bet most of you can think of a relationships that foundered because what one party “knew” wasn’t what the other person wanted at all.
My referral tip for this blog is if you want a productive business relationship fcus on the first of these activities. Invest in spending time with this person getting to know each other and finding out what they want to achieve. Then you can each invest in the relevant other activities that will give you both a return on your investment.
If you want to learn more about how to get a great return for your investment in marketing visit my blog http://blog.referralinstitutenn.co.uk/ and sign up for regular referral tips.
The Referral Institute
firstname.lastname@example.org Tel: 07970 638 857
Note from All About Quality – Jacky runs great workshops all about how to build our referral network for free! Click here to book on