Ask any sales person if they would rather sell to a referral or cold call and every one of them will answer that they would rather sell to a referral. Because referrals close at a much greater rate than other leads, referrals are the cornerstone to a strong sales pipeline. Good networkers know this so they are always out looking for new referral partners and working to build strong business oriented relationships. Great networkers are also constantly evaluating their network and identifying who they should be spending the most time with to maximize their referrals.
But what makes one referral partner better than another. There are the key performance indicators (KPIs) that you should be looking at when you evaluate your network. Of course you always want to look at the number of referrals passed, the closing rate of those referrals and referral revenue generated, but there are three other key metrics you should be considering when you review your referral partners.
Communication is key to a good referral partnership. If you can’t communicate well with your partner, it is going to lead to bigger problems down the road. Pay attention to how you talk about the referrals you pass. Is the referral just a “call this person, they need your services”, or do you actually have a conversation about the referral that generates real understanding of the opportunity? How about education? A good referral partner is always working to improve your understanding of how they help clients and how to pass better referrals and vice versa. Your partners need to be open to being educated by you as well.
New clients shouldn’t be the only introductions your referral partners are making. A great referral partner is committed to helping you be more successful, faster; and will not only introduce you to your next customer, but they will also be introducing you to new referral opportunities. Think about it as the gift that keeps on giving. Every potential referral partner that they introduce you to has the opportunity to pass you the same number of referrals as your top referral partner. If your referral partners aren’t introducing you to new referral partners you are missing out on a huge amount of potential revenue.
The Fix It Factor
Not everyone is perfect. Issues pop up from time to time with even the best referral partners. The fix it factor is all about the potential to resolve those issues and make the relationship stronger. These issues aren’t all going to be huge issues and some you may not be able to fix. For example, you may not be receiving a lot of referrals from a referral partner. You come to find out it is because their brother does what you do and he gets first shot at the business. Can you fix it? No. Is that bad? No. But it does mean that partner is not one of your best referral partners and you don’t want to be spending a lot of effort trying to make him one. Some issues will require you to have an adult conversation. But don’t worry, great referral partners are open to coaching to be better partners because again, they want to help you be successful.
If you have referral partners that get defensive or argumentative when you talk to them about issues, you have a big problem, either with how you are presenting the coaching or with the partner. But to be really honest, we all know which of our partners we can have that conversation with and which ones we can’t. If you can’t fix an issue and it impacts your ability to refer business or get referrals you may need to reconsider that referral partner’s place in your network.
So what do you do with your referral partners that don’t rate high on your KPIs for your network and that you can’t fix? Please, and I can’t stress this enough, do NOT call them and tell them that you won’t be sending referrals to them anymore. That will not end well. What you need to do is start working to find their replacement and putting your effort towards developing a great new referral partner. And slowly, as appropriate, start giving more referrals to your new partner. Over time the partner you have issues with will fade away.
As business people we come into contact with hundreds if not thousands of potential great referral partners over the course of our careers. If you don’t evaluate who is in your network and why, you will be left with a bunch of “partners” that are performing at an average level. But, if you identify your best partners—I call mine my Special Operations Team—and spend time building those relationships; you will find that you will start receiving better referrals more often.
Kevin Snow is a Director Consultant with BNI MN and Founder of Time On Target. He has over 20 years experience in sales and sales management in the technology and digital marketing industries. His passion is working with entrepreneurs to help them develop effective sales strategies and processes for their businesses. Over the last 15 years Kevin has worked with thousands of entrepreneurs and sales professionals through consulting and training to help them close over $150 million in new business by leveraging their existing relationships and better communicating their product’s differentiating benefits.