It’s no secret that many companies work to differentiate their brand by focusing on one aspect of an industry. Smart business owners, however, don’t just specialize, but also invest in alliances with others in their industry to expand opportunities, particularly when it comes to referrals.
Most companies do not refer clients or customers to other businesses lightly, given the time and effort they spend landing and forging successful relationships with their clients. However, in the same way that cultivating client relationships is good for business, building relationships with other companies in the field also can be beneficial, especially when it comes to opportunities for referral business. When competing companies know you, your team and what your company offers, they’ll be more likely to refer new business your way when it falls outside their expertise but is in your sweet spot.
Consider, for example, a law firm that typically advises a business client on tax and employee benefits matters. Imagine, then, that the client suddenly found itself threatened by a lawsuit by three employees that got hurt on the job. If the law firm then referred the client to another trusted law firm that focused on personal injury or professional liability matters — areas outside the primary firm’s practice — the primary law firm would not only act in the best interests of the client, but also establish a relationship with the personal injury firm, opening the way for future, mutual referrals.
Making referrals also can be advantageous when the type of service provided isn’t an issue, but geography is. For many companies, understanding the ins and outs of their industry’s business landscape is linked to specific practices, trends and laws in the region where the company and its clients are located, making a service provider’s location key to its ability to provide valued services. Because of that, connecting would-be clients to experts in the appropriate geographic area through referrals and vice versa, can strengthen business relationships while enhancing exposure and, possibly, profitability.
In addition to potentially increasing a firm’s exposure and bottom line, this type of cooperative give-and-take can add to a company’s standing within its local communities, demonstrate ethical business practices and establish a commitment to a high standard of service.
Successful relationships with other businesses require more than a willingness to swap referrals. It’s important to do so with reputable companies that are as enthusiastic about referral business as you are, including having a strategic business plan in place.
Building your business referral network
- Join and participate in professional business associations, including those specific to your business’ industry and local chambers of commerce. When appropriate, run for board positions, volunteer for committee work and otherwise get involved to further connections with other members.
- Work with community-based organizations of interest to you personally or that are in line with your business’ industry. Doing so will support your business’ and clients’ community and create opportunities for you to meet and possibly do business with other people, firms and organizations, whether it’s referral or otherwise.
- Refer others to trusted businesses when appropriate, establishing an avenue for return referrals.
- Participate in thought-leadership opportunities, including speaking engagements, to remind colleagues of your firm’s services and make others aware of your capabilities, potentially driving interest and referrals.
- Partner with a referring firm on a bylined article or panel discussion to showcase your individual strengths and mutual connections.