We lead the industry in pioneering techniques for developing a strong referral base from a powerful network of centers of influence. Our CEO, Tom O’Rourke, was recently published on the subject in Colorado Banker Magazine. This article summarizes some of his primary recommendations. You can see the full published article here at Colorado Banker.
Centers of Influence (COI) are an easy way to grow your small business. A COI is anyone who can send you a referral. The best COIs to have are the ones who do business with or have personal relationships with the other people or businesses that can benefit from doing business with you.
Before you can establish your COI, define the criteria for establishing your relationships. It’s easy to peruse LinkedIn and become amazed or even overwhelmed and intimidated by others who have a few hundred connections. However, as impressive as that may be, they’re not the most important qualities for a powerful center of influence network. Your time should be invested in pursuing relationships that promise to be compatible and mutually beneficial over the long term. The chemistry has to be right for your network to function well.
When looking for COI professionals, broaden your search beyond the obvious. CPAs and attorneys are great resources, but don’t stop there. Consider business executives, business owners, bankers, venture capitalists, insurance brokers, consultants, and other professionals who meet the criteria.
There are three main qualities every business relationship you pursue should possess:
- They have regular contact with the type of individuals who fit the profile of your ideal client.
- They are trusted and respected by you and others in your profession.
- They are willing to provide you with regular referrals.
COI Mistakes to Avoid:
1. Thinking that if you refer a client to another professional, that person will make a referral to you.
COIs don’t pass along clients just to return a favor. They do it to get an effective solution to a client’s particular problem. An adviser needs to show real expertise, ideally with a process that is well followed and documented. COIs need to know what will happen with their client.
2. Forgetting to follow through on meetings.
Send yourself emails or use other reminder tools to ensure nothing falls through the cracks. Those reminders can also help an adviser to keep the momentum going with a COI through monthly meet-up dates.
3. Continuing a relationship when, after a lot of time and effort, it isn’t producing referrals.
Ending the relationship should involve a mature, honest conversation with the COI about what’s not working. Afterwards, a trusted third party such as a mentor or coach should review with you what went wrong so you can avoid another COI dead-end.
4. Expecting referrals to start after one lunch or meeting with a COI.
They don’t do it lightly, or quickly. Demonstrate how you can add value, perhaps by solving one of the COI’s own financial or business problems. Since a lot of time can be involved, focus on a handful of relationships instead of pursuing every one of the dozens of COIs you may meet.
The goal of having a large and reliable COI network is getting referrals. According to the New York Times, 65% of all new business comes from referrals. That means on average, two-thirds of consumers make purchases because someone they know recommended a particular product or service.
Tips for Bagging Referrals:
- Be Persistent: When you’re a broker you should be aggressively looking for potential lenders to partner with. You should, at the very least, be prepared to send a lot of emails, letters, and make cold calls. Not all of your efforts will be as productive as you may like, but don’t let that deter you. Be patient. Be persistent.
- Use Your Relationships: Leveraging your already established connections is a skill that should be learned. It then needs to be practiced and perfected to be done effectively and effortlessly. It is a great way to network and it is an even better way to get clients once you have lenders.
- Get In-Person Meetings ASAP: Your entire goal of the emails and letters and phone calls should be an in-person meeting. As a broker, you ask questions of clients and potential clients and try to find out what they really need and what their priorities are. As a lender seeker, you’re proving you can do this as you go.
- Seize the Moment: Ultimately, you have to be ready at all times to “bag the elephant,” so to say. One of the many times you call, you’ll get through. One of your emails will get a response. When you least expect it your phone will ring and the person on the other side will be ready to go. Make sure you are, too.