Referral Sources or Referral Partnerships?
By Paul McCord

Is your pipeline anemic?

Are you finding yourself having to work harder to find and connect
with quality prospects?

Is your call list getting short and you're not sure where you're going to
find new names?

Whether you're facing the above issues or not, aligning yourself with
others who can expose you to new prospects, help set up the sale for
you, and help make life more enjoyable is one of the most effective
marketing methods you can employ.

Enlisting other salespeople or companies who sell to the same
prospects as you to help you find and connect with quality prospects
has been a staple of marketing for top producers for decades–and
unsuccessfully imitated by countless others.

Why have top producers found working with other professionals for
referrals to work so well while so many others have failed to capitalize
on them?

I often hear salespeople and managers--and even some sales trainers-
-talk about seeking out 'referral sources' to help them find and connect
with prospects. These referral sources tend to be salespeople who are
likely to deal with people or companies that would be great prospects
for the salesperson and who might need or want their product or
service.

These 'referral sources' discussions always interest me, so I'll engage
the salesperson in a conversation about their experience with them.
Typically my first question will be how much business they've closed
through these referral sources. A few will indicate they've done well
with them, most indicate they've seen very little to no real business
from their sources.

When I ask the salesperson I'm speaking with what the other
salesperson gets out of making the referral, they mention that they
are giving the referrer the assurance that they'll take exceptional care
of the salesperson's client, allowing that salesperson to become more
valuable to their client by becoming a trusted source of addition adviceand services, or they'll give the salesperson's client a discount of some
sort that only that salesperson's clients get, or they'll give the
salesperson a $5 or $10 gift card to Starbucks or wherever for every
successful referral--in other words, nothing of value to the referrer.

When I assert that the other person is getting nothing of value, I often
get a scornful look and verbal resistance. Some of the responses I've
received are:

· From a mortgage loan officer: "Their client has to have a loan
and I'll make sure their client is well taken care of and gets a
great deal–and that the loan will close on time. That's real
value to that Realtor and their client."
· From an insurance agent: "She doesn't offer insurance, just
securities. Her clients need insurance and she can be assured
that I won't try to steal her clients or infringe on her business in
any way and if she doesn't help her client through me, her client
is likely to see an agent that will try to steal her business."
· From a salesperson for an IT service company: "I often find
additional needs the client has and when I do, if he (the person
who referred him to the client) sells that product, I'll send the
business to him. I'll be a source for additional sales for him to
his client."
· From a specialized printing salesperson: "My referral sources are
also in the printing business. Their clients will on occasion need
some things done that they can't do and that I can. My appeal
to them is that by referring the business to me, they are assured
that I'll talk up just how good they are and it keeps their client
from going to another company that might be able to not only do
what I do but might be able to replace them as well."
· From a pool builder sales rep: "I target residential remodelers
who do a lot of extensive remodeling. My company isn't the
cheapest but it is very competitively priced and if they refer their
client, we'll give their client a 10% discount. We make them
look good because their client not only gets a high quality
company, but they save a lot of money too."

In each of these cases (and these responses are the norm, not the
exception), the reason given for the referral source to send them
referrals is that they are doing the referral source a favor! "I'll talk
them up," or "I'll close the loan on time," or "I won't try to steal her
business," or "I'll make them look good." The worst part is these
salespeople are serious when they make these statements.Like I said, these referral sources get nothing out of the deal. Why do
they need these salespeople? A promise of making them look good, or
not trying to steal their business, or closing the loan on time is a dime
a dozen. Actually, they're more like a penny a hundred. There isn't a
mortgage loan officer, IT salesperson, pool builder, or printing
salesperson alive that isn't likely to make the same promise. If you
think you're doing your referral source a favor and that is going to
earn you their business, you're in for a surprise.

The first rule in developing referral business from others is that they
don't need you. They don't need your promises; they don't need you
to make them look good; they don't need you messin' with their
clients.

The second rule in developing referral business from others is they
need business too. They need referrals to quality prospects, just like
you do.

The 'secret' the top producers have discovered when getting referrals
from other salespeople and companies is to forget about 'referral
sources' and develop referral partnerships–real partnerships where
the referrals go in both directions, not jut one.

Salespeople and companies need the same thing you need–business.
If they need someone to make them look good or to help one of their
clients, they have no problem finding dozens of salespeople willing to
help. What they need are reciprocal relationships where the people
they refer clients to also refer prospects back to them. They need
partners, not moochers. And if you're not giving back in kind, that's
exactly what you are–a moocher.

Setting up Referral Partnerships

1. Identify Your Potential Partners: Look for other salespeople or
companies who deal with the same prospects as you. Define your
ideal prospect–you may have more than one ideal–and then look for
others who target the same prospect. You want to find salespeople
who are already established in the market; who have the reach and
reputation you wish for yourself; and whose quality of products and
services match yours.

There is no need to waste time and energy on low producing
salespeople as they won't be able to feed you many prospects. In
addition, the quality and cost of your products and/or services shouldclosely match your potential partner's since you will be looking for the
same prospect. If your product is top of the line and expensive, don't
partner with a salesperson whose products are on the bargain end of
the spectrum. Likewise, if you are selling modestly priced products,
don't think you can partner with a premium priced company to
enhance your image–their clients are more than likely not going to be
interested in your company's products.

2. Know What You're After: Once you've identified a number of
potential partners, develop a plan of approach for each. What are you
looking for with each partner–joint marketing? Maybe joint sales
calls? Simply referring clients back and forth?

Take a close look at the activities of each salesperson or company
you've identified to get an idea of how they operate. Do they do a lot
of advertising? Are they constantly running specials? Are their sales
materials high dollar–or maybe they don't really use collateral
material? Are there gaps in their offerings that you can help fill? Do
they tend to sell mostly to existing customers or to new prospects?

How your proposed partner works will lead you to know what to
propose to them. If they do a great deal of advertising or direct mail,
maybe a joint advertising campaign would be of interest to them. If
they work primarily with their existing client base, referring back and
forth might be most appealing. If they use a lot of high dollar
collateral material, you better have material that is equally impressive.

3. Set an Appointment with the Partner Prospect: Invite your
partner prospect to lunch. Your partnership discussion is important
and shouldn't be viewed as a casual phone conversation.

Many of your potential partners will be men and women you either
don't know or have only met once or twice very casually. Many will
not know who you are. Since the men and women you've identified as
potential partners are the best in their industry in their local market, a
very effective way to gain a lunch meeting is to acknowledge their
success and superior reputation. Just call them, introduce yourself,
and then tell them that you know them via their reputation and the
quality of their work and that you'd like to take them to lunch as you
have found that it is always good practice to know top people in the
business. Most will accept–people like to be recognized for their
work. Seldom have I been turned down with this approach. And best
of all, it's true. I do want to know the best people in the business and
they are among the best in the business in their area.4. Make Your Proposal: During your meeting, present your
proposal. Your proposal must focus on what the partnership will do for
your potential partner, not what it will do for you. Salespeople are
people, meaning their natural interest is 'what's in it for me.' If you
approach the conversation from a self-centered point of view, your
proposal is dead before you even begin.

If you've done your homework well, you should be able to relate
exactly why your potential partner would be interested in working with
you, what type of working relationship it would be, and what the
potential results for them will be.

Since there is a very good chance your potential partner doesn't know
who you are–and possibly they know little or nothing about your
company–you'll have to be able to quickly create a relationship with
them and to provide credibility for yourself and your company.
Hopefully you have mutual clients or testimonials from individuals or
companies your potential partner will recognize and respect.

Don't expect a commitment during your initial meeting. Most often if
the person is interested, they'll need time to do some due diligence, as
well as additional discussions to develop the model for the partnership.

5. The Monkey is on Your Back: The partnership was your idea,
not theirs. That means you'll have to do the work to get the
partnership going. Even if you gain agreement from your potential
partner, they won't be committed until they see results. You'll have to
take the lead in getting the partnership moving–and most
importantly, you'll have to provide them with real leads, referrals, and
potential business before you can expect them to begin feeding you
leads and referrals.

If you're just looking for free, easy business, don't bother with a
partnership because it won't do you any good. However, if you're
willing to invest the time and effort, focusing on creating partnerships
with the top salespeople and companies in your area that work with
your prime prospects can bring in business you would have had a very
difficult if not impossible time reaching.

Partnerships are great door openers and business builders. But they
aren't magical. They take work. They take time and effort. And most
of all, they require you to do what you say you're going to do–be asource of new business for your partner, just as they are expected to
be a source of new business for you.

Paul McCord is a leading authority on prospecting, referral selling, and personal
marketing. He is president of McCord Training, a Midland, Texas based sales
training, coaching, and consulting company. His first book, Creating a Million Dollar
a Year Sales Income: Sales Success through Client Referrals (John Wiley and Sons,
2007), is an Amazon and Barnes and Noble best-seller and is quickly becoming
recognized as the authoritative work on referral selling. His second book, SuperStar
Selling: 12 Keys to Becoming a Sales SuperStar has just been released. He may be
reached at pmccord@mccordandassociates.com or visit his sales training website at
mccordandassociates.com or either of his highly popular blog
http://salesandmanagementblog.com

Copyright 2008, Paul McCord. May be reproduced without change, with proper
attribution and brief bio. Notice of when and where article is to appear to
pmccord@mccordandassociates.com