The most powerful tool for increasing business is often word-of-mouth. A personal referral can carry more weight than the cleverest piece of advertising.
So for learning professionals looking to increase their business, it can make sense to engage in structured referral or cross-selling arrangements.
While it is possible to go out and intentionally try to start up this kind of relationship, it’s better to let the subject come up naturally. A learning professional should ideally already have a relationship with their potential referral partner.
Here are some things to keep in mind when looking for a referral partner and negotiating the relationship:
Remember it’s all about trust
When you ask someone to refer you to their network you place a lot of trust in them. Trust that they will represent you accurately and enthusiastically, trust that they’ll pick people who are receptive to pitch to, and trust that they’ll know when to back off and avoid alienating possible clients.
But your referral partner needs to be able to trust you too. They put their reputation on the line by referring you. Being trustworthy and upfront about what you do and the results you can get is a crucial step in gaining a referral partner.
Complementary not competing
When looking for a referral partner, you should target people in an industry which is related to yours. Not only because that way giving a referral comes across as more natural, but also because the people in their networks are more likely to be interested in the training you provide. You want to find someone who already has a relationship with the people in the industry you are looking to target.
However, there is related, and then there is competing. Someone who works in competition with you makes a poor referral partner, as they will have more to gain from getting potential business for themselves, rather than referring that business to you.
Credibility is key
Your referral partner should know about what you do so that when they refer you to potential clients they sound genuine. Even better is someone who is genuinely enthused by the learning you provide and the outcomes you achieve. A referral partner who comes across as fake will drive away clients rather than attract them.
Negotiating the agreement
When working out what kind of financial arrangement you and your referral partner will have it is important to ask yourself what each referral is worth to you. This will be impacted by whether or not you are short of work, whether the cost of reaching those potential clients would be greater using another method, or if they would be impossible to get without a referral.
Most referral arrangements involve the referral partner getting a percentage of the payment the learning professional earns from the client that was referred. At what point this percentage is paid needs to be clearly spelled out – is it when the client books in the training? Or is the referral percentage only paid when the learning professional gets paid?
This is where trust once again becomes important. Your referral partner needs to be able to trust that you will accurately report when you get work as a result of their referral. To ensure fairness, in the agreement there should a specific clause allowing a referral partner to contact the client they referred to ask if the learning professional’s services were engaged or not.
Any agreement with a referral partner should spell out the term of the agreement, and what happens after. Does the end of the agreement mean the end of payment? Or do payments continue as long as the learning professional earns money from a client their partner referred?
The agreement should also deal with liability – if the referral partner makes promises which the learning professional can’t meet, who is at fault?
Whenever you engage in a referral partnership, you should check the laws around disclosure. In some jurisdictions, your partner legally must tell a potential client that they stand to make money from the recommendation. This is not universal however, so if you carry out training in different locations, check the local law.
A good learning professional with a quality program can grow their business in areas or industries where they don’t have much of a presence through the power of a referral partnership. With a bit of care in choosing partners and negotiating arrangements these partnerships can benefit everyone involved – learning professional, partner, and client.
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