Building your referral network
Many mortgage and finance brokers rely on referrals to build their business. Recommendations generate trust, which is essential for a financial services provider in order to make a sale. And receiving referrals is certainly more cost-effective than many forms of advertising and marketing. But how can you build a referral network that helps your business to grow consistently? Who are the best referrers and how can you actually get them to send customers to you?
Here’s a few simple ways to establish a strong referral network and make it work to build your business over time.
Align yourself with like-minded local business professionals.
Establishing yourself as a respected business professional in your local community is an important part of building a profitable referral network. This means networking at local business forums, attending functions and getting involved with local community initiatives wherever possible. Engaging with your local community on social media is also a great way to promote your expertise and raise your profile. Once you are well-known in your community, other business owners and community members will respect your abilities and they will refer business to you automatically in order to assist their own customers and friends.
Formalise your referral partner commissions and/or fees.
Sometimes a good referral source will require a fee or commission in order to agree to refer their customers to you, but others will simply be happy to recommend you to their customers in order to add value to their own services. If you have identified a business to align with that requires a fee or commission, you should carefully negotiate terms and establish a formal Referral Service Agreement as there are ASIC rules and regulations that you and your referral partner must comply with under such an arrangement.
Turn your best customers into sales people for your business.
Your own customers are potentially the best source of referrals for your business. Customers who are happy with the service you provide to them will often provide you with a testimonial that you can use to promote your business on your website and social media sites. With the right encouragement, they may even be willing to recommend you to their own friends on social media, which could widen and extend your reach enormously.
Always remember to ask your customers for these endorsements as soon as their loan settles, whilst the joy and enthusiasm that comes with securing a new property is still fresh in their mind. Remember that asking your customer for a testimonial and social media recommendation is very important – it is unlikely that the customer will think of it themselves when they are caught up in all the excitement of new home ownership.
Remind and encourage your customers to make referrals down the track.
A happy customer will often give away all of your business cards to friends and family within the first couple of days with the greatest of enthusiasm, then quickly move on to the next phase in their life and forget all about doing it again. Unfortunately, that’s just human nature.
It is estimated that only 1 – 5% of customers in your database will ever make a real referral – a case where they identify someone who is definitely in the market for a loan and send them on to you. In order to turn your happy customer into a real referrer for your business, you will need to make an effort to engage them with your business and subtly teach them how to refer. That means finding ways to stay top of mind and incentivise their positive behaviour.
- Stay top of mind with regular communications. Engage with your customers by communicating with them on a regular basis via a monthly newsletter, birthday cards, anniversary messages and so on. Always use these communications to remind your customers to recommend your services to others – be sure you specify the services you offer, or your business, rather than the loan products themselves.
- Remind your customers about the value you provide. Contact your customers regularly offering home-loan-health checks, asset finance, insurance, building wealth for retirement and any other services that you may provide. Always mention the benefit the customer will enjoy by seeing you about these services – a greater choice of loan options, guidance about what loan to choose, saving money, peace of mind, enhanced lifestyle, a secure retirement or caring for loved ones. Emphasise that you’re ready to provide these benefits to their colleagues, friends and family too. Include a button in your email that makes it easy to forward it to friends and colleagues.
- Offer your customers an incentive to refer. Send an email to your customers thanking them for their business, then ask them to send you a friend or colleague within a particular time-frame and offer a small gift for every referral that results in a loan settlement. Perhaps the gift could be a Visa Gift Card or movie tickets. Alternatively, just tell your customers that you always reward your regular referrers. Remember to get your customers to ask their friends to tell you who referred them so you can reward the right person. Always thank your customer for referring people to you, even if the referral does not result in a sale.
- Organise events and invite your customers to bring their friends. It’s a good idea to reward your best referrers by taking them out to dinner occasionally, perhaps every four to six months. You can ask them to bring along someone you have not met as yet and potentially gain a new client for every referrer you invite.
Organising events like movie nights, theatre nights, winery tours and so on is also a great way to introduce yourself to new people via your regular customers. You may be able to get your business referral partners to contribute to the cost or find a business to sponsor the event entirely. Organising fund raising events for a worthwhile cause is also a great way to get people together and engage with you in a relaxed environment.
Schedule referral network building activities.
Keeping your requirement to establish and grow a network of referrers a priority in your business is important if you want to succeed. Budget and plan for how you are going to grow your referral network. Schedule the organisation of incentives and events in your diary or they will fall by the wayside in the hustle and bustle of everyday tasks. Spending a little time and making an effort could potentially lift the number of referrers in your database and the number of referrals they regularly make. Perform your referral network building tasks regularly as part of your everyday business and you’ll soon see the benefits as your bottom line grows.
Connective helps members to grow their business by providing access to a local Broker Support Manager, who is always on hand to support your efforts and help you make new connections. If you’d like to find out more about how Connective can help you, simply click here to make a time to talk with a Connective Sales Manager in your state. If you’re already a member, why not give your Broker Support Manager a call today?