February 8th, 2019
One of the fastest ways to grow your business and generate a constant supply of new leads is to form referral relationships with other local businesses. So, what kind of businesses make great referral partners for finance brokers? This article provides some tips to help you decide and information about the correct way to get set up and running.
Deciding on who to approach
Just about any kind of business can make a good referral partner if they are highly respected within your local community. All it takes is for the proprietor to know his customers well.
However, a formal referral partnership will be most effective if the partner’s business objectives and customer database align with yours. To decide what kind of businesses to approach, start by looking at your own objectives.
Growing your existing market
Look at successful businesses that align with your current business focus. If your existing market is mainly car loans for example, then you might want to approach a reputable local car dealer or car service centre to form a referral partnership. Don’t be afraid to think outside the box – car clubs, 4WD drive clubs, caravan and boat dealers, or even your local fishing and camping supplier may also work out well.
One of the best referral partners for your business may also be the local mortgage broker. Many mortgage brokers prefer to specialise in residential loans and property investment lending. However, our data indicates their customers are likely to want to buy a car within 12 months of changing their mortgage or buying a new home. They are also a good referral source if you service small business lending, or vehicle and equipment loans for the self-employed.
As a Connective Asset Finance Broker, you can ask your local Connective Broker Support Manager for an introduction to a reputable mortgage broker who may be interested in working with you. These brokers also use our Mercury IT Platform. This will make it very easy to share customers from your databases.
Expanding into new markets
If you want to form referral partnerships to find customers outside your usual comfort zone, you may want to consider other local professionals. Financially oriented businesses service customers from all walks of life and many kinds of businesses. These professionals may include:
Depending on your business model and location, they could refer businesses requiring a wide variety of business loans:
You can always tell your referral partner what type of customers you want them to send through. However, the great thing about being a Connective Asset Finance Broker is that you can service just about any type of customer like a pro even if you haven’t worked in that area of business before. Our BDMs are always here to help you work out the right solution for your customer’s needs.
Align with like-minded people
When choosing a referral partner, it’s very important to ensure their customer service standards and business ethics align with yours. To get to know the prospective partner and their business before commencing a relationship:
Put a Referral Agreement in place
A referral partnership works best where there is a mutual desire to offer great service to clients that will build both businesses. Putting a formal Referral Agreement in place will ensure the roles and responsibilities of both parties are clearly defined and help to protect your business from risk. Connective Asset Finance Brokers can access two Referral Agreement Templates in Mercury via the Documents tab.
The NCCP Act does have some requirements regarding Referral Agreements and any associated fees on consumer loans. You can read more about them in this recent article from the Connective Compliance Team here.
Want to know more?
Being a Connective Asset Finance Broker means it’s easy to make referral partnerships. If you’d like to know more just talk with your Connective Asset Finance BDM today.