A, B, C – Who Should I Refer?

By BNI & Referral Institute - Apr 20 , 2011

By Lester Salvatierra, BNI Area Director

Anyone who has been networking actively for a year or more will run into a dilemma: Depending on your profession, there may be many other businesspeople in your immediate circles who offer the same services that you do.

Of course, your goal is to package what you do in a unique and different way, but when it comes right down to it, the actual product is the same. Some professions —insurance, financial planning, real estate — are flooded with sales agents. Maybe you’re one of these folks or you’ve got a related job. Your predicament is that as you network and find multiple people in your regular contact groups who are offering the same product, whom should you refer when the opportunity arises? Who will you give business to?

The obvious answer is to refer the “best qualified person” for the job. Sometimes, however, it’s not that clear and simple. If someone stands head-and-shoulders above the rest and also refers business to you, then that makes it easier. But what if this person is well-skilled and knowledgeable, but not yet someone who refers? Should you make the referral to the one who gives you business even if he or she might not be the best qualified? Pledging loyalty to someone based on the amount of business he or she gives you has to make you question what you’re basing your loyalty on. Would you tell someone who refers you business regularly that you feel he or she needs to shape up? Not likely.

Some people sprinkle around referrals to all their contacts whom they feel are worthy. This can work, but it also dilutes building a solid one-on-one partnership for the long term. Depending on the volume of business you transact, you can have two or three strong referral partners in the same profession, but you should think through your overall strategy so you don’t get caught weakening your network.

Here are checkpoints that should serve as food for thought.

1) Refer the best candidate for the job based on the quality of work he or she does through your direct or indirect experience. If you have used this person, then you will know his or her strengths, and if you haven’t tested these services then you may have heard through testimonial how outstanding this candidate is and the great value he or she offers.

2) Refer the person who understands networking and the concept of reciprocity. That doesn’t mean you expect an immediate referral back; it means this person has taken the time to also understand your products and services and has his or her radar on alert for opportunities for you as well. Referring the best attorney in town all the business that comes your way without his or her even knowing what you do will usually not serve you well in the grand scheme of things.

3) If you get referrals from someone you would not necessarily refer back to because you feel something is lacking, then you have two choices. The first choice is to sit down with the person and explain what you’re feeling, and what you’re perceiving. Based on human nature, not many people will take this very well and you may not get any further referrals from him or her, but it might help him or her to become a better businessperson.

The second choice is to reciprocate the business he or she directs toward you with other types of benefits. Maybe you won’t refer him, but you could give him ballgame tickets, gift cards, dinner/theatre passes or a certificate for something he or she values. Basically, you are saying “thank you” for your efforts and you have done something, other than refer him, to show your appreciation. My experience is you will choose the path that fits your personality and also fits the type of relationship you have with the other person.

Based on these points, it should be clear that if you want to start to generate business and referrals from a particular person, then first get him or her a referral. This candidate will take note and want to reciprocate. On the other hand, if you get a referral from someone, make sure you acknowledge and thank him or her immediately and then learn about what he or she does so you can keep this person top of mind.

Build your referral partner network with quality in mind and be selective on who you team up with because a bad referral will create negative ripples about your credibility. Personally directing business to people only because they give you referrals or offer you money or gifts for those referrals without believing in their products and services will not enhance your business, reputation, or your brand, and will slowly tear it down.

Lester Salvatierra is an experienced Finance Specialist with First U.S. Finance (http://www.FirstUSFinance.com). He helps small to mid-size companies lease or finance a wide variety of equipment and special projects for upgrades and expansions. He is also a networking pro and BNI Area Director in Ventura County, CA. Lester@FirstUSFinance.com Ph: 805-217-9896