I am a networking junkie! But unlike people with other addictions, I am not looking for a 12-step program to cure my habit. I like the "buzz" my business gets from my referral addiction. A healthy referral-based business is built by creating relationships with business professionals who provide other services to your customers.

Who Else Sells To Your Customer?

When working with a photographer interested in growing his wedding business, I suggested he create relationships with a caterer, florist, baker, jeweler, and invitation designer.

The reason? The average bride will spend $20,000 on her wedding. Having a solid network of people who are talking to brides allowed him to reach more potential customers at the right time.

The same process works in the home services industry. The average homeowner is doing something in their home every few months. Creating a network of associates on the lookout for opportunities for you is like expanding your sales force.

On a regular basis roofers, carpenters, maid services, painters, remodeling contractors, electricians, and snow removal companies are talking to your potential clients. Do you have one in your network? Better yet, do they have an HVACR contractor in their network?

Also, while you are thinking about potential candidates for your referral network, consider a home inspector, real estate agent, insurance salesperson, and mortgage broker as well.

Finding Your Buzz

To find the right people, you may have to do a bit of networking. You should join the local chamber of commerce or another business association. You will need to meet a lot of people to find the right ones for your team.

When evaluating whom you want in your inner circle, think about what you can do for them. If you can't see yourself ever referring business their way, don't waste their time or yours cultivating the relationship.

There is a saying about getting what you want by helping others get what they want. When it comes to business referrals, I really believe that is true. If you create opportunities for someone else, they are more likely to create them for you. It won't always be one-for-one, but in the long run it pays off.

Pick your inner circle carefully. When you give the name of a resource to a client or a friend, you are connected to that resource. If that person or business handles the assignment professionally and competently, your value as a trusted advisor, or "go to guy," increases. Conversely, if they blow the project, it reflects back on you as well.

Make time for your referral partners. Stay in touch through e-mails, phone calls, or the occasional face-to-face. Find out what is new in their business and share what is new in yours.

As your relationship grows, it becomes easier to ask for referrals.

Who Gives You The Best Buzz?

Also, periodically, review your referral sources. Have you remembered to say thank you for a closed sale? A personal note or Starbucks gift card, even if it is for only $5, is a nice way to follow up. Every month buy lunch for the person who has sent you the most leads recently. Look for ways to send business their way.

Review your data to determine if a formerly good source has fallen by the wayside. Take the person to lunch as well. Perhaps something in their business has changed, or maybe they have just forgotten about you.

An electrician noticed his referrals from a particular contractor had all but dried up. He called him and they met for coffee. In the course of the conversation, he found out the contractor was selling his business.

As a result of the conversation, the electrician met the buyer and became his electrician of choice. Without the conversation, the sale would have been made and that source of business might have been gone permanently.

People come and go. Even with a strong referral base, you need to stay active, be connected, and always add new people to your mix.

Lorraine Ball, the owner of Roundpeg, helps small business owners learn the secrets of big company marketing. For more information, visit www.roundpeg.biz or e-mail Lorraine at lorraine@roundpeg.biz.

Publication date: 05/09/2005