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Building an active referral network

May 16, 2017

Building an active referral network

Tracie Orisko, President, Managed Sales Pros

There are two types of referrals that you can use to grow your MSP business. Both will help you build your business, but only one can be counted on to provide a steady stream of new opportunities. Let’s review the differences between the two.

The first type of referral is passive.  It usually happens like this: A person with whom you interact– a client, a friend, a peer of some kind – learns that someone is looking for a new IT provider, and gives that prospective client your name.  They call you, and you meet with them. If it’s a good fit, you’re most of the way to a new client.   We describe this as a “passive” referral because you don’t have to do anything to acquire it.  It gets walked right up to your door.  You don’t have to do anything other than be a great provider to generate passive referrals.  And of course, referral gifts don’t hurt. 

The second type of referral is active.  Unlike the passive referral, which just shows up, an active referral is a referral you have to work for.  You have to actively create and cultivate a network that is focused on helping you grow your business.   Building an active referral network takes time and action, but it’s one of the most powerful (and least costly) ways to increase your sales. 

So, how do you create an active referral network?  Start with your client base.  Initiate the conversation at a time when it naturally makes sense to do so.  Has your client recently thanked you for something?  Made a comment about how happy they are?  If not, this is the place to begin.  Call your clients and ask them how you’re doing.  How is the service they are receiving from you?  What could you be doing better?  What might cause them to go elsewhere?   If your client tells you that you’re doing great, they couldn’t be happier and they’re not going anywhere, this is the perfect time to begin building your referral network.  We find a conversation like this works best:

“I’m really happy to hear you’re pleased with our service.  We love having you as a client, and as a matter of fact, we would like ten more clients just like you.  Can you think of anyone in your network that might be looking for the kind of support we provide you with?”

Once you’ve collected those referrals, call them.  You can ask your client to make the introductions via email, but it will be faster and easier just to gather the names and call them yourself.  Make it easy and simple for your clients.  The less they have to do, the more inclined they’ll be to share those contact names.

The first call to a warm referral should be an invitation for a discussion.  Remember, they don’t know you.  They will need time to learn about your company, and they will likely reach back out to your referral partner to ask questions about you once you have spoken.  Start the discussion like this:

“Hi Joe.  My name is Carrie Simpson.  We haven’t spoken before, but I work with Alex Smith at ABC Company, and he recommended I give you a call.  Would now be a good time to chat, or would you prefer we put something on the calendar for next week?”

Unless there is an immediate need (and lucky you if there is!) don’t push for a sales call immediately.  Approach your first meeting as an opportunity to widen your network, meet another business owner and ask a lot of questions.   Here’s where the network part of your referral network begins: There is no reason that you can’t ask everyone you meet the same question at the end of a meeting or a call.  “So, based on what you’ve learned about us, who do you know that might benefit from working with a company like ours?”

Once you begin to add that question routinely to your daily conversations, you’ll see your active referral network begin to grow.  Remember, though – your active referrals will dry out unless you’re prepared to reciprocate.  Nothing shows gratitude for referrals more than returning the favor as often as you can.   Go into new conversations looking for a way to help everyone you chat with, and spread the referral wealth.