How To Build A Successful Referral Network

referral network

“Referral network” that word gets tossed around a lot by entrepreneurs, business coaches, and established brands alike. We won’t lie; the idea of building evangelists from your community is an attractive prospect. 

However, it’s way more challenging than you think. Building a referral network that leads to steady business takes dedication and, sometimes, years of work.

So, how can you build a referral network for your business? Let’s start with the basics. 

What Is a Referral Network?

A referral network is a business-to-business agreement to pass on appropriate work to the right people in the group. These business-based team referral networks often involve businesses in the same industry gathering together in a pseudo partnership.

When one company can’t fulfill a customer’s needs, they can direct that customer to another business in the group.

For example, if a photography company gets an inquiry about doing video work, they can direct their new client to a great videographer.

To give another example from a different industry, if you’re a machinist and you get a request for CNC recommendations, then you can send the inquirer to a CNC manufacturer you have a good relationship with.

A customer may even expect you to provide this sort of information to them. So, you should always have several referrals handy for anyone who might be looking for them. Your customers will appreciate your honesty, and your professional referral network will appreciate the work. 

Referral networks can be informal, as well. They can be as simple as you passing on your business cards to one another. They can also consist of larger businesses giving small jobs to smaller firms.  

There are many ways that these referrals happen but, no matter what, these networking practices look good for you as a business, and they build your brand’s visibility. 

Taking the First Step: Check Your Referral History

Chances are, if you’re active in your community, you’ll have already had several companies reach out to you about sending over some work. If that’s the case, look at the past few years.

Which companies have sent you the most consistent work? Who’s a business regular? Who do you think will give you a useful review? Who do you refer your clients to already?

If you notice a strong trend, then you should reach out to the other company without hesitation. 

Alternatively, you can look at your sales history. Who is already coming to you to get work done often? Who do you go to when you buy services?

The more time and money you and they spend, the better the chances of successful sales referral network creation.

Don’t Sit Back: Be Proactive

Now that you have your professional network set up, you’re in a pretty good spot. Unfortunately, referral networks aren’t a magic wand that you can wave once to bring in business.

Instead, your networks are more like a farm. You have to cultivate them to yield good results.

Don’t be pushy, but you should have regular reminders in place about referrals and incentives. Consider setting up an email, calling your network, or sending out a call on any relevant Facebook groups. Say that you’re offering special rates for any referrals you receive in the next 30 days.

Simple reminders like these make asking for referrals feel less invasive and more fun than they would’ve otherwise. Now your partners can say, “oh yeah, I know this great business, and they’re even offering a sale right now!”

Another great way to start engaging with your community is to make a group on a site like, where you and your network can connect effortlessly. 

Discounts or Cash: What Makes a Good Incentive?

Depending on if you plan to offer a discount to the client or plan on offering a discount to the person they refer to you, you can move forward in several different ways.

For clients, you can offer a discount on their upcoming payments to you. You could also offer a gift card, company credit for them to redeem, or commission from the clients they send your way. You could also consider offering gifts like a fine wine or whiskey. 

An easy way to incentivize referred clients to you is to offer discounts or freebies with proof of their referral. (You might even create a new regular customer this way as well.)

The Secret to Conversion: Turning Referrals Into Sales

Having all the referrals in the world is excellent, but there’s no guarantee that those referrals will turn into customers. First, you need to layout your sales pitch. What kind of customer do you want?

Think of the typical budget that your customer has, what that customer will ask for, and what you do. Then, think about how you want to move forward if the pairing isn’t a good match. 

You can guarantee that you’re getting the right leads by taking two crucial steps. Give your referral network an overview of your ideal client so that they know who you’re looking for. Next, offer them a script that they can use when referring people to you. 

Not only does this keep your customer base closer to what you want it to be, but this approach also keeps your messaging consistent across the board. 

Keep Your Friends Close and Your Referral Networks Closer 

If you use this method, you should build stable and enduring networks that you can rely on to generate leads. 

Finally, only refer to businesses that you feel are reliable. Referring only to trustworthy companies will increase your business’s credibility and the power of your referral.

Remember, it takes a century to build a reputation and seconds to destroy it. When you refer a customer, you are staking your reputation on the company you’re referring to others. 

A referral network isn’t a silver bullet for your problems. Build genuine connections and stay honest. You and your business will do great. 

For a head start, sign up for an Introducing Me account and join the 1000+ networks that trust us with their collaboration.

Related Articles


Your email address will not be published. Required fields are marked *

Sign-up for FREE and establish your online business profile.Sign-up for FREE