The Business of Doing Business Podcast Episode 5: How to Strategically Build Your Referral Network

In this episode, Yasmine discusses the importance of networking and building referral partnerships in business. She emphasizes the intentionality and potential benefits of getting in the room with people who share a client base and values, as it makes business easier and more enjoyable.

Yasmine shares her personal experience with various networking strategies and highlights the need for a balance between personal and professional relationships.

She provides practical tips for identifying ideal referral partners and forming a digital rolodex of your contacts. She also advises on asking for referrals, structuring referral arrangements, and preserving a professional reputation.

Key Takeaways:

  • Networking and building referral partnerships are crucial for business growth and success.
  • Identify ideal referral partners who share a client base, but offer different services.
  • Maintain a balance between personal and professional relationships.
  • Ask for referrals from clients and establish a system for passing referrals back and forth.

Episode Timestamps:

00:00   Introduction and the Importance of Networking

02:25   Different Networking Strategies

05:54   Balancing Personal and Professional Relationships

09:12   Identifying Ideal Referral Partners

13:20   Creating a Contact Spreadsheet/Digital Rolodex

16:04   Asking for Referrals

21:39   Preserving Professional Reputation

22:30  Conclusion and Call to Action

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Episode Transcript

[00:00:01]: When I first began networking, I was so heads down. I was all about the business. And after a while, I remember I looked up and looked around, almost like, where is everyone? I would be shocked if you didn’t see a growth in your network and business overall this year if you implement some of these strategies

Welcome to the Business of Doing Business podcast with Yasmin Salem Hamden. Hey y’all. Welcome back to another episode of the Business of Doing Business podcast. I’m your host, Yasmine Salem Hamden, and I am coming to you today with a question. I am wondering, do you want to grow your referral partner network within your service-based business in 2024? I’m asking this question because it stems from conversations that I am having with tons of people these days.

In the past few months, I’ve been hearing more and more from people within my network and conversations that I’m seeing online where people are seeking more networking opportunities and collaborative opportunities and the opportunity to get in the room with people who share values and a professional network and working with similar clients.

And so it kind of goes without saying, but I’m going to spell it out, is that when you are able to get in the room with people who share a client base with you, who have a similar client base as you and are aligned with you in terms of values, professionally, ethically, maybe even personally, business gets to be really fun and feels really good and is easier, I guess, is what I’m trying to say.

And so if you listen to this episode and implement some of the suggestions that I mentioned, there’s virtually no reason why you won’t have a thriving network consistently sending you referrals by the time this year is over and feel really good doing it and have a lot of fun doing it.

So I know I’m not alone in feeling like there’s nothing better than when a great client comes your way, already vetted, also given a stamp of approval by a trusted friend or colleague. In my experience, these referrals are more likely to become clients and less likely to become a problem client later on, if you know what I mean.

[00:02:11]: And it’s kind of an if you know, kind of situation, so I don’t necessarily need to spell that out. But if you have been on the receiving end of referrals and have given referrals before in business, and most people have, you probably know exactly what I mean.

[00:02:25]: So I want to talk today about building referral partnerships and relationships in business and establishing a network of professional service providers around you in your business who also serve the same type of clients so that you can create a support for the company that you’re building.

So when I started networking professionally, it was around 2014, 2015. Looking back, I feel like I tried every networking strategy under the sun. I think at this point, I would say it’s safe to say that I’ve been to well over 100 networking events over the years. I’m curious how many exactly, but certainly over 100. I’ve been to so many, and I used to go to so many networking events in the early days of my business.

[00:03:05]: So between 2014 and 2018 was like my networking heyday, and I went to in person networking events. I did online networking groups. I did online networking groups before the pandemic. I mean, that was a thing before then, but of course it became the new normal and a standard when the pandemic was going on. I’ve networked in Facebook groups, LinkedIn groups. I’ve gone to business expos. I was a member of a BNI chapter. I have stories about that that I’ll share later, I’m sure, but that’s business networking international, and those were networking and referral groups.

[00:03:39]: I’ve organized my own networking events and brought different groups of segments of my network together with the intention of networking. I’ve tried online speed networking, which wasn’t my favorite, certainly was not ideal. But I’ve tried it and it was cool. And I actually met some cool people from that experience.

And I even remember an app, I think this was like probably 2017, that was like dating app swipe right style for business networking. So I didn’t use that for very long. But I actually have people that I still do business with and I still stay in touch with that I’ve met through that method. So hey, I’m not here to knock it.

[00:04:18]: I’m just here to share what my experience was like. So I don’t necessarily think that everybody needs to try all of these things and all of these different networking strategies, or that you need to be spending an absurd amount of time networking. But what I can say, and what I will say is that growing your network is absolutely critical if you are in business and if you’re a business professional, especially if you are a B2B service professional.

But really, if you provide any type of service, I’m going to talk to, of course, on this podcast, we talk mostly about online-based businesses, businesses that market and sell and deliver their service or their product online. But this really applies to any service-based business if you work with clients one-on-one.

So like I said, I believe it’s absolutely critical and has been a complete game changer for me in my career and in my businesses, overall. It’s also great to have a sense of community, people you can vouch for and who can vouch for you. And many people I’ve professionally networked with over the years have become friends of mine, too.

[00:05:23]: So it can be nice. When I first began networking early in my career, beginning of my career, I was so heads down. I was all about the business. And after a while, I remember feeling like I looked up and looked around, almost like, where is everyone? Where are my friends? I had friends, of course, but I was not nurturing those personal relationships. I don’t know if I would go as far as to say neglecting, but I don’t know. I think I could definitely say I was neglecting myself personally, probably, and with those personal relationships.

[00:05:54]: And so I want to encourage you to do your best to be conscious of that and maintain a healthy balance of your personal relationships and your professional relationships, because that all contributes to your human experience. Right? And ideally, and I think we all want our personal human experiences to be positive, so try to maintain a healthy balance there.

Okay, so let’s talk about actually building your referral partner network or your referral network. Referral partner network feels like a mouthful a little bit. I don’t know why, but your referral network, your network of referral partners, and I want to be clear up front that this is not like a get-rich-quick scheme or an overnight tactic.

This is for you, if you, like me, are playing the long game in your business, in your career, and plan to have a long, exciting, and successful career with a thriving network that you love to be a part of and that you are able to serve and give back to. And in that same note that you are able to benefit from as a business and as a professional. The other day I was, and this is a quick side note before we get into it. I was being interviewed by a woman named Renee. She hosts a podcast called Your First Digital Product.

[00:07:03]: And we were talking about how I came into the digital world and why I’m so excited about business and entrepreneurship in today’s day and age. And I really believe that. And this was just a few days ago, it’s earlier this week, so it’s still fresh on my mind. And I feel like it’s related to this topic of building your network, networking, doing business in general, and engaging in commercial activity.

And I really believe that we are living in a very exciting time. And I’ve talked about it on. I talked about it on an earlier episode. It comes down to the digital nature of business today and how that has completely revolutionized what it means to do business, to sell a product or to sell a service.

[00:07:43]: And that includes accessibility to business activities, including access to marketing channels. So no longer do you have just the option of you either got to market in print or on television. And very limited people had access to those limited real estate, and that cost a lot of money that most people did not have and do not have access to. And so now there are, of course, online marketing channels, online platforms, social media marketing channels, and channels for networking.

So the digital world has also opened up networking opportunities so that people who want to sell a product or service can network and connect with others, even if you’re working from home, literally if you never even leave your house, which changes everything, potentially, for many people, including women who perhaps have young children at home or have caretaking responsibilities, as well as those who perhaps have physical impairments that prevent them from marketing in person or networking in person.

And also people who just don’t want to go out in the world, which there are many reasons why some people are not able to access the opportunity of marketing in person or networking in person. So building your referral network is something that anybody can do. It just requires a commitment from you to show up genuinely as yourself, to identify and seek out the people you wish to connect with, and then to do so, and from an intentional and ethical place.

[00:09:12]: So first things first, you want to identify your ideal referral partner. I think this is a fun exercise, in my opinion, and it’s an exercise that I think every entrepreneur should engage in, no matter what you sell. But sit down and think about who shares an audience with me, who has the same audience as I do. But we are not competing with one another. We don’t sell the same thing, but we sell something to the same person.

So consider who your ideal client works with before they tend to work with you or someone like you. That can be a great way to think about it. If you’re having difficulty thinking of, okay, who has the same client as me, well, think about people you work with.

[00:09:53]: Who do they typically work with before you, maybe after you. And that can help you begin and start that list of, okay, who are the kinds of people that I would possibly have a great referral partnership. So once you start to get clear on, okay, who are these types of service providers and other businesses that my client also works with at some point in their life or business journey, do your best to come up with a list of ten types of service providers.

For me, in my first business, my law firm, I sold legal services and so my clients were all business owners. So I knew that they worked with website developers and web designers, people who developed brands and graphic designs, social media marketing professionals, accountants and bookkeepers, and also other legal professionals who did not offer what I offered. So these all made for really great referral partners for me because we served the same clients and we didn’t compete with one another in terms of the service that we provided.

So we were able to pass business to one another because all of my clients at some point possibly needed their services and vice versa. If I was a website developer, I would consider partnering with other people who are in tech and development, maybe with business consultants and brand designers or social media marketers.

[00:11:12]: Because typically if you’re marketing on social media, you also have a website and vice versa. If I were a health or fitness coach, I would consider partnering with others also in the health and wellness space, which might be obvious, but people of course who serve a similar client as you and have an alignment of values as well. And that applies of course across the board when you are networking and finding and identifying these referral partners.

The best-fit referral partners are those who share in values with you as well. So as I mentioned, if you are a health or fitness coach, I would consider partnering with others who are aligned with you and your client base in the health and wellness space. Maybe nutritionists, dietitians, physicians, massage therapists, private chefs, et cetera.

Who else are your clients hiring throughout the year? Think about that as a marketing professional. Let’s say I’m a marketing professional and I focus on YouTube marketing strategy for SaaS companies.

[00:12:12]: So we’re getting a little more specific. But honestly, the more specific you are, the easier you’re going to find it to identify your ideal referral partner. So if I were a marketing professional and I was focused on YouTube marketing strategy specifically for SaaS companies, I would partner with providers serving a similar client in operations and tech SaaS-focused social media marketers who don’t do anything in the world of YouTube.

If I’m focused on YouTube, accountants or CPAs or lawyers for online and tech-based businesses, SaaS-focused copywriters, et cetera, people who serve a similar client as me, depending on what it is that I sell, I would be willing to bet that you have at least ten people in your network right now that you already have a relationship with, that you could be more intentional about when it comes to nurturing that relationship and creating a two-way street of passing business back and forth and sending referrals, receiving referrals. Everybody’s happy in that situation. It’s a win all around for you, your referral partner, and for the client who’s being taken care of and being provided with a vetted referral.

[00:13:20]: So please take a moment, sit down for like 10 to 15 minutes, open up a spreadsheet. So that’s my next recommendation to you, is open up a spreadsheet and begin to write down or type in the names of all of these people who are already in your network. You don’t have to meet anybody new at this stage.

This is where I would begin. I wouldn’t jump into like, let me go and try to meet a bunch of new people, try to really be intentional about the people that are already in your network that you already have an established relationship with, and that perhaps you could be a little more intentional when it comes to actually doing business with one another. So create your contact spreadsheet.

I like to practice a rule of three when it comes to my referral network, I like to have three referrals for every type of service that my client might need. So if I know that my clients need nutritionists, I am going to do my best to have three referrals that I’ve connected with, that I’ve established a referral partnership with that provide those services, and that way I can provide those three to the client as options for them to consider. It’s okay to have just one referral that you send or that you provide to a client. You don’t necessarily have to have three, I just like to have three because then that means you have multiplied your referral network by three.

[00:14:32]: And also your client has options to research and consider depending on what their specific needs are. No two nutritionists are the same, just like no two web designers are the same, no two marketing professionals are the same, no two lawyers are the same, et cetera. So it’s great to provide your clients with options, and they’ll appreciate that. In your spreadsheet, I would include, of course, the contact’s name and their contact info, phone number, email address.

However it is that you communicate with them, the services that they sell, what specific services do they provide to your ideal client and a description of their ideal client. If it is different than yours, it might not be, but it might be. So including their specific ideal client can help you pass more great business to them. And also, of course, it’s not an absolute as far as it has to be an exact match of ideal client. I think that’s a great place to begin if you are wanting to bring more referral business into your business.

[00:15:26]: But of course, not everybody in my network serves my exact client. We serve a lot of different people and so it can help to document that so that you can be really clear on who is the best fit for them, so that you can identify those in your networking and as you go about your business and send those referrals to your referral partner. I also like to keep track of the referrals that my referral partners send me.
That’s another important piece of data. It’s important to be aware of who your best referral partners are and can also be helpful when it comes to thanking and expressing gratitude to your referral partners, which I encourage you to do consistently and on a regular basis.

[00:16:04]: Okay, so the next thing I want to share with you is ask for the referral. So after you have this list, you can begin reaching out to the different people in your network. Like I said, these are probably people that you already know. You already have some sort of initial contact or an established relationship with them. Schedule a call with them or depending on how you communicate with them, if you have some sort of voice memo, open communication, send them some sort of communication and let them know that you want to meet with them to discuss a potential referral partnership.

When you meet with them to discuss this referral partnership, be very clear. Don’t hide the ball or try to beat around the bush. You both, I presume, are in business to do business. This isn’t a hobby or some sort of nonprofit or charity where you are not looking to grow your revenue and grow your business and expand your client base. You’re probably both trying to do that so you can do it together. Be very clear and out in the open about that.

[00:16:59]: Ask for the referral. Let them know that’s what you’re looking for. Now, as you engage with clients of yours, if you have enjoyed working with them and you know they’ve enjoyed working with you, hopefully you’ve achieved some sort of result by this point. If you haven’t achieved results working with this client yet, I would not encourage you to ask for a referral yet.

Just wait until you’ve achieved some sort of results together. But ask your clients to send referrals to you too, because they probably are deeply entrenched in their industry and know more people like them because we all do, really. So it can be really helpful to partner with your clients as a referral partner, and that can be great as well. Okay, so let’s talk about structuring your referral arrangement.

[00:17:40]: So let’s say you meet with a referral partner. They’re down. They’re into the idea of being referral partners and passing business back and forth. You don’t have to have a formal agreement or a written contract about your referral partnership. It can be informal. And that’s a common practice, too, especially if you are not planning to offer a referral fee or a referral commission, then those referral partnerships tend to be more informal and aren’t in writing.

In those instances when you’re not providing a referral commission or a referral fee, you can still express gratitude through thank-you gifts or returning the favor and sending high-quality referrals to that referral partner as well. In my experience as an attorney and with my law practice, we were actually prohibited from fee sharing.

[00:18:28]: So as a lawyer, you could not receive a referral from your referral partner. Maybe that’s like a $10,000 fee, and then the referring partner or the referral partner gets a cut of that. That was prohibited. And I know that there are a lot of other regulated industries. For example, I was chatting with somebody on threads earlier today.

Her name was Melissa, and I believe she was an accredited financial advisor. And they also have regulations in their industry. So be sure you take a look at, if you are in a regulated industry, be sure you take a look at the rules of ethics and the laws that apply to the marketing and the fee sharing within your business.

[00:19:08]: Because in an industry, I came from a highly regulated industry where there are regulations on how we can market, how we can advertise, and how we can share fees, and in this instance, not being able to share fees with non-lawyers. So when it comes to non-regulated industries and services, which if you’re listening to this, you’re more likely than not to be in an industry where fee sharing is not regulated.

Referral fees and referral commissions are either a flat fee per referral or a percentage. What I’ve seen is five to 15% for services with digital products, which when I say a referral partner, I’m typically talking about services with digital products. Depending on what the digital product is, I would maybe structure that, and maybe it is a language thing, but there are some differences between how you would operate the referral partner program or the affiliate program and your referral network.

But with digital products, I see that the affiliate commission is typically higher, anywhere from ten to 50%. We have an affiliate program for our digital products at Coaches and Company we sell downloadable contract templates and our affiliate commission is 25%. We came to that amount based on a variety of factors and you will want to consider the same when you’re deciding on okay for my services.

[00:20:25]: What makes sense in terms of a percentage or a flat fee? And if I go with a percentage, how am I going to calculate that to where it doesn’t negatively impact you financially as a company with referral partnerships that are based on a percentage or a flat fee, you can have terms of the agreement in writing. And I encourage you to if this is a relationship that you want to formalize, that you want to set the terms for, and if there are other things that you want to agree on with your partner.

So do I need a contract with referral partners? Maybe. Is it required? No. Can it be helpful? Yeah, depending on the circumstances and just to reemphasize, because this can be very important depending on what kind of services you provide or what industry you operate within is be sure to double check and be cautious of any laws or regulations that prohibit fee sharing related to your industry.

Most of you, like I said, are probably okay, but depending on what it is, it can put your business at risk and that’s just not worth it. So you want to be aware, be intentional about how it is that you are structuring your referral partnerships and ensuring that it’s not tied to the fee at all.

[00:21:39]: And finally, I want to encourage you to preserve your own professional reputation by only referring business to others that you know are legit. So vet people when you meet them. You want your recommendations to be valuable and to hold weight within your network. So be intentional about this. All right, that is what I’ve got for you today. So I hope this episode was helpful.

I hope it gave you some new things to think about when it comes to approaching your networking strategy and establishing relationships in your business, building your referral network and creating an ecosystem for your business to be a part of. Because that’s really how I see our industry as a whole, as one big ecosystem and we all play our role. And then within the larger ecosystem, we each have the power to create really powerful networks that can elevate all of our businesses.

[00:22:30]: So I am here for the referral network. I encourage you to pursue this as an approach to your marketing and building a marketing system within your business. And I want to hear from you if you decide to implement some of these tips. Like I said at the beginning of this episode, I would be shocked if you didn’t see a growth in your network and business overall this year.

If you implement some of these strategies, it is possible for you and it doesn’t require that much time, just a little effort and intentionality. If you decide to try being consistent with this practice this year, please let me know. Message me on whatever platform you usually see me on, whether it’s on Instagram and threads or on LinkedIn. I want to hear what you’ve got planned and how it’s going.

[00:23:15]: If you enjoyed this episode, please take less than 60 seconds to leave us a review, wherever it is that you’re listening to this, and if you really, really love this episode, please share it with a friend that you know would enjoy it as well. I will talk to you all in the next episode. Peace.

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