My 5 tips to developing lasting referral partnerships

Referral partnerships have been a pillar of business operations for decades … centuries even. Whether you’re an engineer or an electrician, auto mechanic or art dealer, referral relationships exist in every industry.

Broking is no different.

Brokers play an intrinsic role in the real estate process, as well as the purchase of vehicles, major business equipment, essential insurances, wealth creation, utilities plans and more.

But simply offering a service doesn’t mean you’ll have referrers knocking on your door.

You have to outline your unique proposition and how you’ll benefit the interests of their clients. The referrer wants you to be add to their client’s overall customer experience, enhancing their own brand.

So, how do you form a referral partnership and prove to the referrer that you’ll deliver? 

1. Your unique proposition

Do you ever log onto LinkedIn and find another request to connect? At their most lazy, they’re along the lines of: “Hi Peter, let’s connect!”

Apart from the person’s title and business, I’ve got little idea why they think we should connect. Unfortunately, this lazy approach to LinkedIn creeps into offline networking.

If you want to develop referral relationships, you can’t just say you provide the best customer service – you have to demonstrate it.

From lead to settlement, you have to demonstrate how you’ll service their clients’ needs. You also have to demonstrate how you will provide ongoing service, post-settlement, partnering them on their ongoing financial journey. And, if they don’t proceed to settlement, how do you communicate and engage with them so they convert?

Other things that will help prove your unique proposition are:

• testimonials from customers
• case studies that display ability to deal with complexity
• written service level agreements with different lenders
• examples of marketing and communications collateral to clients.

2. How long does it take to develop a referral partnership?

If I had a dollar for every time I’ve been asked this ….

In reality, it can take six months for a referral to materialise. Most quality referrers have a list of people they trust to look after their clients.

However, there’ll come a time when their existing referrers are too busy. If you’ve demonstrated to them that you’ll enhance their client’s interests – and protect their brand – then you could be in line to get the phone call. Be patient.

Here’s a tip: If someone jumps at your first approach, they’re not likely to be a quality referrer. You want to get on the referral panel of partners who are hard to form relationships with – those with a steady, high volume pipeline of work.

3. Casting a wide net of referrers

Having a diverse range of referrers is obvious. It means if one industry is affected by an economic downturn, like a downturn in property or new car sales, or legislative changes such as restrictions on SMSF purchases then your referral pipeline doesn’t dry up.

Spread your referrer base so it’s not top heavy toward any particular sector. Build relationships with the staples – real estate agents, accountants, solicitors and wealth managers. But also think about developing referral partnerships with prominent businesses in your local area including plumbers, builders, right through to the local football club.

4. Start your own referral group

Getting together with five or so different professionals once a month for breakfast or lunch and talk about the challenges, wins and likely outlook for your business. You’ll find opportunities where you can add value to your connections or they can for you.

5. It’s not all about the $$$

I’m always asked about spotter fees and finder fees and how important they are in forming referral arrangements.

In short, they’re not. And if the referral partner thinks otherwise, then it’s not a partnership worth having.

The value of a referral partnership is in the customer experience it delivers. If you, as a broker, offer a smooth and efficient customer experience that enables the client to bid at auction or sign a contract – and matches them with an outstanding product – then you’re adding value to the referrer. If the referrer is a real estate agent, you’re enabling them to transact the deal and convert business. If they’re an ancillary provider – an accountant, solicitor or other – you’re upholding their own personal brand by coming through with the deal.

Prove yourself and protect your business

Developing referral partners takes time and judgment: time to develop and judgment in who to approach.

You need to demonstrate your service proposition and ability to provide superior outcomes for referrers’ clients. After all, they’re putting their reputation on the line by recommending your services. Develop a capability statement to prove you’re the real deal.

And you need to protect yourself against economic and legislative interference by developing referral partnerships across an array of industries.

If you want to develop better referral partnerships, Loan Market’s business coaches assist in opening doors to Ray White and identifying other beneficial sources. Contact us today to discuss more.