When you began your small business, your first customers probably came to you from the recommendation of others who had established relationships with you.  Whether you realized it or not, your referral marketing system was already at work. 

This referral network was almost certainly made up of family, friends, previous business associates, and other contacts you accumulated over the years.  These are people who already knew you and trusted you because of your prior business with them. 

They happily gave your name to others to help you get your business off the ground. The referrals they gave you already came with a positive attitude and confidence from the recommendation of others.

At the heart of your referral marketing program is your network of contacts.  These are the people you have met over the years and formed relationships on many different levels. Your network is made up of family, friends, business associates, suppliers, members of your social groups, neighbors, and many others.

A network is not something you can put together when the need arises, but a collection of social capital that you accumulate everyday. The old cliché, ‘It’s who you know, not what you know’ is a fact when it comes to your network.  The larger your network the more opportunities you will have to grow your business.

Getting quality referrals from your network requires you to plan and organize your contacts into manageable parts. Not all of your contacts will be equally profitable. Family members may not be as lucrative as a supplier who is in the same industry as your company.  Prioritizing and targeting your best contacts within your network is a useful investment of your time.

 The first step to building your referral system is to identify and categorize your contacts within your existing network.  Begin by thinking of all the people you know.  Organize your prospective referral sources by using the following categories:  

1. People in your current Contact Sphere
2. Satisfied Clients and Customers
3. People whose business benefits from yours
4. People with who you do business
5. Business co-workers, present and former
6. Members of business groups you belong to
7. Fellow members of social and religious organizations
8. Family, friends, teachers, mentors and coaches

 As you compile the names, you will notice definite patterns develop that expose the strengths and weaknesses of your network. The quality of this list is direct proportion to your current networking skills. If you are weak in an area, there is no need to worry. There are always opportunities to improve your networking abilities. 

Next, you will further break this list down into three sub-categories: 

1. Your Information Network: those people who can help you with knowledge, experience, and expertise to run and expand your business.
    
2. Your Support Network: these people are those who can offer you emotional, physical, spiritual, and financial support with your business.
    

3. Your Referral Network: these are people who have the resources and connections to  pass you potential referrals.

From this list, you will focus on customizing your network to your market and fill the voids that you have. By seeking individuals who work in these voids, you will soon diversify and strengthen your network.  

After sifting through and properly categorizing your network list, you will move onto the Referral Marketing Basic – Determine Your Contact Sphere.

©2005 Ron Abbott