Friday, January 19, 2007

Referral Relationships Need Balance

I get asked a lot about how to take care of referral relationships which are typically different than the Ripple-focused connections and relationships I talk about here in this BLOG. However, after some careful consideration and several inquires on this subject, I thought I would share my perspective on how Referral Relationship should be.

One of the single biggest ways to wreck a referral network is to not take care of the people who take care of you. Period! End of story!

When people go out of their way to create referrals on your behalf I believe you owe them. I know, I know I always say when you do something for other people that you should not keep score and I still stick by that statement for the most part. My one caveat is referral relationships as I do believe that there is a certain amount of reciprocal effort that should be extended by the benefactor of your efforts. Maybe not every single time but more often than not! If nothing else, to insure that they communicate the efforts or actions you have taken on their behalf were appreciated and valued.

This situation just happened to me personally. I have someone whom I established a referral relationship with and have referred a lot of business to them over this past year. My efforts on their behalf have resulted in some pretty extensive collaborative relationships and some bottom line positive financial dollars for their firm. I have always been happy to provide referrals to this person because of the excellent work that I know their company to do and because of my personally satisfying experience using them. However, as I have continued to invest in the relationship both by utilizing this person's services for my own company and by continuing to refer business opportunities to them, my efforts were not being recognized or reciprocated. It wasn't obvious until I sat down and really looked at just how many opportunities I had referred to them and how out of balance the scales really were.

I believe that referral relationships only continue to grow and prosper when both parties add something to it. Now I am not suggesting that if I helped this organization secure a five thousand dollar opportunity that I would or should expect five thousand dollars of return opportunity back. But I do believe that on some level some commensurate return of effort is necessary to maintain some semblance of balance and equal contributory value. At minimum a heartfelt thank you and plain simple acknowledgement can go a long way towards balancing the books!

Bridging these kinds of conversations can be tricky but ultimately necessary if you hope to develop referral relationships that are both profitable and long lasting. I also think that having open and honest communication about what is expected and what ground rules both parties will live with, can go a long way towards building a stronger more equally rewarding relationship. Had I had this conversation up front when this person approached me about being a referral resource for one another, it would have saved me a lot of uneasiness and angst along the way.

Ripple On and Refer Right!



Thom Singer said...


this is a great post on an important topic. I am going to devote a post on my blog to this...and I suggest that all your regular readers who write blogs chime in on this topic as well.

You are right on the money when you said: "One of the single biggest ways to wreck a referral network is to not take care of the people who take care of you. Period! End of story!"

I would like to add that a formal "Thank You" of some kind (more than just saying "yo, thanks") is a great way to keep the referral network alive.

Most people know that referrals cannot always be in perfect balance. Some folks just don't have the right types of contacts to make referrals to everyone. But going over the top with a "thank you" will keep those referrals rolling in.

I referred a person to a lawyer that I know well. The day he signed the client the lawyer had a very very nice bottle of wine delivered to my office. Not necessary, but I will never forget!

Great topic....I hope others will use their blogs to talk about this!

Liz said...

Hi Steve

Great post. I quoted you and referred folks to your post on my blog today.