How To Start a Referral Network

A referral network is more like a list of social connections that you have. This is a list of connections that have the capability to refer people to your business. At the very least, it starts with your family and friends and then branch out to acquaintances. If your business is young, you may have started introducing your business to the people that you know. As your business grows, connections become more complicated. Later, you may get customers, suppliers, collaborators and investors. Knowing how to leverage these connections will ensure a more solid brand and more customers for your business.

But how do you create a referral network? Well, it usually happens naturally. But there is active and passive sense when it comes to creating referral networks. It is passive because you should want to create relationships naturally. But it is active because you need to take the initiative to make it happen. You’ll understand more about this as we delve into the process of creating a referral network.

Here are the steps.

STEP 1: Start With Your Own Circle

A referral network cannot be considered as a ‘network’ if it doesn’t start with your own circle. As with anything, it needs a primary circle – a seed – before it can grow. Think about it this way. Businesses are often promoted through word of mouth. This means that as more people know about you, you’ll have more mouths to promote you.

With this, your own circle cannot be discounted. This includes your family and friends. These are the people that already know and support you. This way, you don’t even need to pull their leg just to promote your business. They will be excited to hear about it and will happily tell other people.

Every referral circle starts from this – the people you know. It is as simple as asking them to promote your business to other people. If one person tells another and that other person tells another, that’s where your brand awareness starts to grow. It may seem small but it works. As mentioned, it is like a seed that you plant and nourish. As more people know about your business, you’ll start seeing some results from your efforts.

STEP 2: Provide Amazing Products or Services

However, your business can only grow if you have amazing products and services to begin with. This is an essential step in building your referral network. You should aim to exceed your market’s expectations by giving them more than they ask for. And you can do that through your product or service.

Some businesses have the best ecommerce marketing.They are good with dealing with people and can grow their network easily. However, they are often left wondering why they are not closing that sale. Well, often the network may be untargeted to their offer. Or their offer is not just enough to convert the target market.

The good thing about your products and services is that it has the capability to grow your business on its own. For example, a customer has bought something from your online shop and he liked it. If he had a positive experience, he can become a repeat customer and will more likely recommend your store to his family and friends. With this, it has the capability to grow your business.

STEP 3: Provide Amazing Customer Service

If your products and services were not able to cut it, you can always win referrals through amazing customer service. In fact, customers admit that they sometimes buy from a shop just because of customer service. They like the feeling that they are safe when they buy and the shop will stand for their interest. With this, the customer is more comfortable in buying and would likely recommend the shop to his family and friends.

How do you provide amazing customer service? It is not so much the promptness of your reply or how knowledgeable you are in addressing questions. It is about going another mile and caring for your customers. At first, going another mile may seem like a waste of time. But as the customer feels that you really care about them, they will keep coming back and may even promote you to other people.

STEP 4: Explore Your Niche

Networks are people. People need relationships or friends. They don’t want people who only come to them when they need something. They want people who authentically cares about their welfare.

How can you do this? You do it by knowing the needs of your network. But you can only understand these needs if you immerse yourself in their culture.

Every niche has its own culture. There are the geeks who are interested in different topics like games, cartoons, comic books and the likes. There are fitness buffs who are interested in different types of diets, workouts and health articles. There are beauty enthusiasts who love skincare products and makeup. It all depends on the interest in your niche. Since every niche is different from each other, exploration is essential to networking success.  

How can you explore your niche? You can start by reading some online blogs or articles and joining some online communities. You can look for Facebook or LinkedIn groups and look at the articles that people in your niche usually share. Then, you can go to conferences or events. This will let you go from your online world and interact with your niche in real time.

This step acts like a building block for all the other steps in this guide. Knowing your market or niche is essential to creating an effective referral network. If you don’t know who you want to have in your network, you’ll just have anyone. But you cannot afford to do that. If you end up wasting your time on the wrong market, you’ll find that they will hardly convert into a sale. Then, you’ll be wondering what’s wrong with your network. So do your part. Explore before getting anyone into your referral network.

STEP 5: Have a Process for Building Connections in Your Niche

Once you sort out the needs of your referral targets, it is time to start to invite them to your network. But this process is not as simple as approaching them. You need a process.

As for me, I love to record my targets on a spreadsheet. I record their brand name, website, contact information such as email, phone number, Facebook profile, Twitter profile, LinkedIn profile and Google Plus profile. This is so I have their contact information handy when it is time to talk to them.

Then, I go another mile. This is when I will visit their sites or use their products to assess it. If they own a blog, I would read some posts and comment on some that I like. If they have products, I will try it and tell them what I think about it.

As I have mentioned a while ago, getting connections is all about building relationships. You don’t build a relationship by asking them outright to visit your site and buy. Instead, you look at what they have and commend them. Be interested in what they are interested in and try to get to know more about them. This is the only way to make lasting connections.

Why do I do my research on their site? Well, this gives me something to talk about when I do get around to talking to them. With some articles from their blog or products from their store, I can strike a conversation that is highly relevant to their interests.  

STEP 6: Consider Your Market When Choosing Connections

In step 4, you learned how to explore your niche. I asked you to do this not only because you need to know what your market needs. You also need to know how they live. Why? Well, this is where the best connections can be found. It is in your customer’s lifestyle where you can find complementing products and services that you can promote to.

For example, you may be a wedding photographer. You may go to wedding events to find a bit more about your market. Then, you realize that these newly engaged couples usually look for other services such as hair and makeup services, catering services and the likes. What if you go to these services and ask them to promote you as a photographer. Better yet, create a package that include all of these services with you as the default photographer. Wouldn’t that drastically increase your sales?

That is the power of exploring your niche. You get to know more about their needs as well as other complementing products and service businesses that you can promote to.

STEP 7: Look at Unrelated Businesses as Well

But don’t stop in related businesses. In the example above, you don’t need to stop in wedding-related products. You can be creative. For example, you can promote in ‘engagement rings’ instead of the classic ‘wedding rings’. Engaged couples have a high likelihood of getting married and needing a photographer. The same is true for beautiful parks and venues. Often, couples like to take their prenuptial shots in these places. So being there at the right time may win you some business.

As you can see, it is not just about looking for connections within your niche. After all, it is highly unlikely that a business with the same product or service will promote you. You will be their competition. It will not be good for them to share their market. But if you promote to connections that have complementing businesses, everything changes. It is more about tracking your customer’s lifestyle and life cycle. Aside from looking at what they are using, also look at where they are going and what they want to be. This will give you some clues on where your business can enter.

BONUS: Implement a Referral Program

A faster way to build your referral network is to install a referral program in your site. This is a system where your customers can fill up an online form with the contact information of their family and friends so that they can refer them to your business. They will do this because you will give them a reward. A reward after all is essential for every referral program.

There are different types of rewards. You can give away a free item or a discount coupon. What type of discount you should give away highly depends on your niche. If you sell products that are over $100, it may be best to stay with a cash discount. Often, these are products that are bought rarely. But if you’re selling something below $100, then a percentage discount may be ideal.

Once you have your reward, you will also need to choose who to reward. In this, you have some options. You can choose to reward the referrer or the friend or you can reward both. While rewarding both may seem ideal, it may not be good if you are on a budget. This means that you need to give away two rewards for every referral.

Once you have decided, you need to implement this in your website. For that, you’ll need some referral software. You need to use this so that you have a software that will automatically count your referrals and reward referrers on auto. This means giving you one bill that you can pay and it will be immediately distributed among your referrers.

Most ecommerce sellers use referral programs to build their networks. It is natural and it immediately taps your list of existing customers. So you may want to consider having one in your online store.

Remember, referral networks is all about connections. It is all about building relationships by helping the person first. It may take some time to build your network. But once it takes off, you’ll find that your business will be more stable than it was before. You’ll see new customers and rising revenues. That would be a dream come true for every new ecommerce website owner. 

5 Response to "How To Start a Referral Network"

  1. Comment From Janice Courtney

    Great article you have here!

  2. Comment From Maissa Fournier

    This is really helpful! I felt so lost before I saw this!

  3. Comment From Jenniffer Cruz

    I would definitely bookmark this. This is like the easiest guide to follow online.

  4. Comment From Mason Louisse

    Your bonus is definitely a bonus!

  5. Comment From Jack Hunter

    I really like this one, the step by step guide is very easy to understand.

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