Home – New Forums Marketing mastery Referrals – Just saying

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  • #988265
    MissSassy
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    Hi fellow Flying Solo friends

    There is often talk on here about referral partners, kickbacks given, how to reward someone who refers business to you etc.

    I constantly refer other businesses that I know and trust and do not have any arrangements in place with those businesses. I just want others to experience the businesses that I trust.

    First and foremost I believe in a givers gain philosophy, in that the more I give, that someday in the future it will return. It is something I practice with all businesses that I know well and trust and I like to refer people as often as I can.

    So with that – I am curious about other people who do the same, or are people looking for something in return first? Looking forward to your comments.

    #1166391
    Daniel Mitchell
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    Hi there

    ‘What goes around comes around’ seems appropriate and you’d hope that anybody who you refer people to would have the same attitude when referring people back to you. I value my reputation and I would only make a recommendation or referral once I felt I could guarantee the quality of service that people expect from me, so usually I’ve already formed a relationship with the person which goes beyond financial rewards. When you choose your referrals correctly it can benefit you in numerous ways and can indirectly build financial rewards anyway.

    On the flip side, there are plenty of reasons to formalise partnerships/alliances/referrals between businesses with complementary offerings and financial agreements can benefit both parties. I guess it really comes down to how official your referrals are and what value both parties put on it. At the end of the day though I don’t think there is any price I could be paid (although feel free to try) to recommend somebody/something I don’t believe in.

    All the best and it sounds like you’re the sort of person I’d be happy to refer people to.

    #1166392
    MissSassy
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    Thanks Daniel

    For me too there is a real “feel good” effect from giving referrals, so there is an instant gain regardless.

    #1166393
    Johny
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    First and foremost I believe in a givers gain philosophy, in that the more I give, that someday in the future it will return.

    I have the same type of thinking as this.

    Isn’t that essentially what networking is about? Developing the relationships, getting understanding of others and either working directly, or providing referrals to those that you are comfortable to refer too?

    Every time I see a comment on forums about offering discounts, rewards etc., I can’t help thinking that person probably hasn’t thought hard enough about why someone should refer others to them. In my mind that should be because that person thought they were so good that their product/service deserved to be known about by others.

    Of course, I do also understand that incentivising the process works with every level and size of business so, I guess, if it works, then why not?

    And I also agree with Daniel that there are times when formalizing such arrangements can be of benefit. I will add though that the proviso with this, for me at least, is that the process is transparent, so that the person being referred knows the referrer may be receiving some benefit.

    #1166394
    Daniel Mitchell
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    Johny, post: 192669 wrote:
    I will add though that the proviso with this, for me at least, is that the process is transparent, so that the person being referred knows the referrer may be receiving some benefit.

    Very good point and you run the risk of being seen as dishonest and immoral if it’s found out that a referral may have been a purchased one. As a customer I certainly wouldn’t trust you again if I thought you didn’t have my interests in mind when you made the referral.

    #1166395
    SheInspires
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    I think referring a client, connection or friend to another business can only really be done if you believe in that other business, particularly as it’s your reputation that is being connected to it.

    I also believe that paying a referral fee of 10% is a great way of showing your appreciation and respect for the referral when it works out. Alternatively a trade in-kind should be made as money doesn’t have to be everything. Demonstrating respect and appreciation is what matters in this case.

    We’re all in business, we all understand the costs involved in running a business and gaining new clients. Mutually looking after each other is important within our networks.

    If I found out that a referral bonus was paid for an introduction made for me I would think it was just smart business. If I asked about it and it was hidden from me then I would have a problem around ethics and trust.

    #1166396
    LucasArthur
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    Howdy Sassy Kelly 😮

    Hope you are GREAT!

    Ok, i typed this reply 3 times now.. all made little sense other than to say…

    People who have others interests at heart will happily refer without kickers or trailers and those that have their own interests at heart will happily refer for $$$$!

    In saying that, lets remove the black and white and add… That people like yourself, and this shows in your willingness to contribute in places like FS, are proud of what they do and the relationships they have formed (refer to this word below) and happily refer their clients to others they have used as they genuinely know they will get the end result they require, and without financial gain for the referrer… Knowing that these positive referrals can only benefit your own business by having loyal contacts, clients and in turn mutual referral partners from the Karma Pool :)

    formed = acknowledgement of mutual business relationships for one another – two sided, not one..

    In saying this, there are still circumstances whereby some industries are positioned better than others to utilise referral partners for financial gain.

    Personally, i LOVE referring people to others i have used or know of.. Love supporting my community, my contacts and others that have earned my respect in some old fashioned way… And this process works both ways, most of our business is referral based and its a quiet achievement to have. Once this begins working for you because, in a round about way, you sort of know people actually like you and/or your products/services..

    Oh boy, above is messy imagine my first few drafted copies that i rewrote (SEVERAL) times.. LOL

    Take care Kelly, keep up the awesome work.. i truly enjoy reading your posts…

    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1166397
    LucasArthur
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    Johny, post: 192669 wrote:
    And I also agree with Daniel that there are times when formalizing such arrangements can be of benefit. I will add though that the proviso with this, for me at least, is that the process is transparent, so that the person being referred knows the referrer may be receiving some benefit.

    Howdy Johny,

    Hope you are well mate.. also, great point to the post…

    Daniel Mitchell, post: 192670 wrote:
    Very good point and you run the risk of being seen as dishonest and immoral if it’s found out that a referral may have been a purchased one. As a customer I certainly wouldn’t trust you again if I thought you didn’t have my interests in mind when you made the referral.

    Daniel. spot on.. this transparency is crucial in ANY commission for referral process or kicker or whatever you want to call it.. In most industries, and for those that follow the regulations, there are many government requirements that one HAS TO DISCLOSE any potential remunerations gained from referrals.

    In the financial world there are significant penalties applied if you do not follow these regulations. the FSRA (Financial Services rules) has further stipulations about ANY referrals that it can not be done and multiple options must be made available to the client for them to ultimately decide (accountants or fin planners please correct me if i am incorrect)…

    Personally, i would prefer to pass any revenue i could have potentially earned onto the person i was referring :)

    Cheers
    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1166398
    MissSassy
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    Thanks so much for your kind words Jason 😎 – I love these forums and helping where I can and referring just gives that warm fuzzy feeling.:D

    Especially when it is also aligned with Flying Solo too!

    Having always been self employed and NEVER in the corporate world I truly understand the importance of the referral and I am LOVING all the responses on this post.

    #1166399
    Steve_Minshall
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    I give referrals freely. Our reward is having customers that know us as the people who have the answers even when you can not help them directly. It also makes the industry a much friendlier marketplace to be in.

    You can make money in business without being mercenary and wringing every dollar out of every opportunity. I find there are more than enough intangible benefits by giving referrals freely without the admin hassles of trying to create a revenue stream from it.

    If another business approaches me to pay them for recommending their customers to us (which has happened), then I believe they are doing their customers a disservice by treating them as a commodity.

    This is the difference for me. Once you get paid for a referral then you are in the advertising business and your customers cease to be your customers they become your commodity. The referral-payer now becomes your customer just like any other form of advertising provider.

    #1166400
    Mike Reddy
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    I, like most on this thread, are only too happy to help others with quality referrals.

    It is all the good things about networking without the business card thrust.

    However I do keep an eye on referrals coming back my way. After all, if I am happily referring contacts to someone and they are not reciprocating, why is that?

    Are they less comfortable about me as I am about them?

    If so, I want to know about that. So I do bring the topic up in order to learn about how I am perceived by them.

    I want to understand why our relationship is less balanced than I thought. Why I am more enthusiastic about giving referrals to them than they are about me.

    If, on the other hand, it is because they didn’t think about it, or can’t be bothered, then that’s important information for me too.

    #1166401
    MissSassy
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    Mike Reddy, post: 192715 wrote:
    Are they less comfortable about me as I am about them?

    If so, I want to know about that. So I do bring the topic up in order to learn about how I am perceived by them.

    I want to understand why our relationship is less balanced than I thought. Why I am more enthusiastic about giving referrals to them than they are about me.

    So often I meet people with no idea how to refer business to someone else and if people are not referring back, chances are that they don’t really know how to. Or they don’t know what you offer that can help people they know. Meeting other possible referrers one to one will help with that. I know I try to catch up with other potential referrers so they know what I do and how I can help people in their network too.

    #1166402
    StevenMelbourne
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    Great discussion here!

    B2B:

    For B2B relationships referrals are more personalised and require a high element of trust between the businesses before one business refers their customers to another. A formalised system may help ensure that referred customers are well looked after.

    There are many business networks around which have formal or informal agreements to co-market and co-refer without incentive payments. At the end of the day these systems will help with customer acquisition for both parties (e.g. your typical Caltex-Woolworths relationships).

    I find that incentives typically occur where one business can offer another business customers but not the reverse. The business who receives customers from another can show appreciation by offering an incentive and this also fosters more referrals in the future.

    B2C:

    On the other hand for B2C I think it depends on the business type, objectives, competition, and maturity. A referral rewards program can be very effective where the business is operating in a competitive industry with many competitors that can provide a similar type and level of service at a similar price. It is simply another way of competing as customers like to feel appreciated and be rewarded – all else being equal they are more likely to go to (and refer) a business with a loyalty/rewards program.

    A good way to structure a referral program is to offer both the referrer and the new customer an incentive – this way the referrer knows their referred friend is getting a generous bonus or discount because of their referral, and isn’t just referring people to get their reward (this rarely works anyways).

    Some well known businesses have run extremely effective referral programs to attract new customers (e.g. Vinomofo, Uber, CMC Markets and even the Telcos) where they provide generous incentives to both the referrer and the new referred customer.

    Based on our research at ProjectCred the main reasons why businesses don’t have a referral program are:

    1. Lack of time or resources to start their own program
    2. Too many customers already – no need for one
    3. Too thin margins to be offering any valuable rewards/incentives
    4. Operates in a customer or competitor environment where referrals rewards are unnecessary

    #1166403
    Mike Reddy
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    Yes, very true.

    I think also it’s important to define “referral”. To me, a referral is an A or B–type prospect. I don’t include, nor encourage, C and D-type prospects.

    If someone is sending my lower quality prospects I do thank them but also have a chat to them about my vision, and the type of client that will help me get there. After all, what’s the point of having a vision if we are then going to set up systems that reduce our chances of getting there!

    My best chance of achieving my vision is to ensure I get clients that I can add the most value to. By definition, they are A and B-type. The C and D-types just wont cut the mustard and I will have to go through the unpleasant business of cutting them adrift, so it’s easier all round not to get them in the first place.

    I also tend to find like associate with like. So if I am regarded as a D-type customer to a particular supplier, then the people I associate with probably are too.

    So that supplier shouldn’t be encouraging me to refer others just on the off chance that I might happen to know an A or 2. They would be much better advised to focus on getting referrals from their A’s or B’s.

    Or have I missed the point somewhere?

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