by Randall CraigFiled in: Business Development, Blog, Make It Happen TipsheetTagged as: referrals
Referrals are one of the best ways to grow your business. But do you leave the process of building a referral stream to happenstance, or do you regularly use a detailed process, supported by analysis. Sound familiar?
Even if you do receive a decent number of referrals, the question remains: how might we do even better? Enter upstream-downstream analysis.
Clients don’t care about you, they only care about how you can solve their problems. And to solve their problems, your services are generally part of a process: there is a service that happens before you, and there is often a service that happens after you are done. Upstream-downstream analysis explores both of these areas in the context of referrals.
Upstream: What categories of businesses serves your clients before you? For enterprise software (ERP, CRM, HRIS, etc.) companies, it may be include a consultant who helps with strategy, or a conference organizer who puts together events in the area. For wealth managers, it may include bankers, solo insurance agents, and accountants. For mergers and acquisitions advisors, it may include accountants, bankers, and business associations. And so on. One thing is certain: they are looking for referrals as much as you are; help them, and they will help you.
Getting referrals from those upstream from you requires a reputation within the sector, a trusted relationship with specific sources, and a mechanism to return the favor to the source. While the first two requirements are easy, the third depends entirely on the source. Many (CPAs for example) will not accept referral fees, as it will compromise their independence; others require it. Most sources want referrals in exchange. And others are looking for special perks: event invitations, professional development, gifts, or simple friendship. Having this conversation beforehand is key.
Downstream: Very often, those who are downstream from you are frustrated that they cannot “sell” until you have done your job. At the same time, their own marketing efforts yield opportunities that require your work before they can start on their own. In both cases, they have an incentive to connect the prospect with someone… So it may as well be you.
The analytical work for downstream referrals is identical to that of upstream: simply identify the categories of businesses that serve your clients after you have done your work. Then develop a reputation in the sector, build trusted relationships with specific sources, and a mechanism to return the favor to the source.
The mechanism is simple: pay it forward. Begin sending referrals to that trusted downstream source. But before you do so, it is critical to have that conversation about what you want in return. Rather than assuming they know what you are interested in, tell them: One of those things is referrals.
You don’t usually need to start this analysis from scratch. This week, prepare a list of all of your clients (including past clients), and where they came from. Then classify each referral as upstream or downstream. If you’re ignoring one approach, you know where to start. And if you have great success with one approach, you can “double-down” and do even more.
Referral Insight: The action plan that comes out of your Upstream-Downstream is usually called a channel strategy. Building this strategy is only one part of the equation though: assign the responsibility for it to one particular person and hold them accountable for it.
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