The impact of collaboration: Referral programs and partnerships
You’ve likely heard that collaboration is key (which may have been accompanied by an eye roll because you’d rather have not been part of the group project for which this comment was directed), but have you considered how collaboration supports your business plan?
Expanding your efforts through word-of-mouth marketing will mean rapid growth for your business. While we’ve spoken at length about the testimonial client route for effective referrals before, here we’re referring to mutually beneficial agreements with other business owners.
The stats are telling. A study conducted by the Word of Mouth Marketing Association (WOMMA), showed that offline word-of-mouth impressions can drive up to 5 times more sales than a paid advertising impression. These inbound referrals come with a certain amount of trust, making it a lot easier to convert clients and grow your business.
Wondering what these partnerships might look like? Here’s your guide to word of mouth marketing through collaboration.
What should a partnership look like?
Referral and affiliate programs
In the same way, your customers and clients appreciate discounts or bonuses for sharing your product or service, other businesses likely will also.
Consider connecting with other business owners who would appreciate and use your services. For example, if you’re a yoga instructor and there’s a workout studio nearby, offering a discount on a program or access to free sessions for relevant referrals might be appropriate as it’s clear health and wellbeing are important pillars for them and their brand.
In other cases, where the industries aren’t so closely linked, offering monetary compensation or a commission might be the preferred route.
Especially for small businesses, it often makes the most sense to collaborate with those who are outside of your immediate field of expertise but offer complementary services to yours. Or, those who are within your industry but have a different specialization or niche. In these cases, the agreement could come more in the form of a trade or services swap in exchange for regular client referrals, it could also be an affiliate discount or compensation.
Remember it’s okay to make money for work you didn't do if you’re promoting a service or product you used and receive affiliate money in return for a referral. After all, the other business has to invest time and money in marketing, which your word-of-mouth marketing is helping with.
Whatever route you decide, ensure the incentive is relevant to the business or business owner you’re approaching. Consider what makes sense for both parties, and make sure you’re offering something that is valuable but doesn’t cut too deeply into your margins.
Combining Complementary Products and Services
Joint business partnerships or service collaborations are great options for companies that have complementary products and services. If your customers are likely to buy from another company based on their interests, purchases, or needs, the company may be a good fit for a partnership.
Whether you come up with a new and unique service offering together or combine your current offerings in a way that makes sense, both the businesses and their customers will benefit from the collaboration.
This could look like anything from a business coach partnering with a marketing coach, or a social media marketer partnering with a graphic designer to offer more of a boutique agency type-offering.
Content & Cross-Promotion
The content you create is extremely valuable to your clients, and if there are ways for you to upgrade that content, provide a new perspective, or offer value that you wouldn’t have been able to otherwise through a partnership, it will make your life a lot easier.
Whether it’s making a podcast appearance (and having the other brand reciprocate), sharing each other’s social media content, or swapping content via guest posts, cross-promotion in the form of content can have a big impact on increasing awareness around your brand and what you offer. Engaging in this kind of collaboration long term can help to mutually raise visibility, and will become more effective as time progresses, and as each business grows.
However, as with any partnership, you need to be sure you’re connecting with those who have your ideal clients primed and ready for conversion. If your offer isn’t relevant and directly valuable to the company’s audience, the partnership likely isn’t worth your time.
Sponsorships
Sponsorships for community gatherings, fundraisers, or sports teams are a great way to build brand awareness while working with local businesses. Consider offering coupons or special discounts to those involved, donating prizes, or putting a percentage of your business proceeds towards a community event.
Though this may not result in a direct conversion for your brand, the buzz created and gratitude felt in the community for your participation will likely drive future business and word-of-mouth referrals.
How to build a referral network
Building a successful client network will not only help grow your company and the company you partner with but offers your customers value as well.
However, this referral system is only effective if it’s mutually beneficial.
This means looking at leveraging your current connections, and going out of your way to make new relevant connections that are authentic and relevant to your customers and your business.
Consider:
Has anyone already sent you referrals? These are great partnerships to look into further. Is there a way to create a closer working relationship that will result in more leads down the road?
Who in your network or local area offers complementary services to yours? If your clients will likely need or want to work with another local business based on your services or their interests, this is a good indication that the company will be a good partner. Think: accountant firms and startups, content writers and SEO specialists, s, website developers and web designers, etc.
Who is in your general industry but serves different clientele or has a different niche? These people might be able to help your clients in ways you can’t, which can help build trust with your clients. Plus, you’ll be able to offer the same for the other company, making it a mutually beneficial collaboration.
What local companies do you always hear about? Even if a company isn’t directly in or related to your industry, there might be a creative way to partner and serve your clients, as long as you share similar values, and are committed to serving your audiences.
How to know when to partner with someone (and when not to)
Your referral network needs to be strong and authentic. Remember, if you refer a client to someone and they have a bad experience, it can put your own standing with them at risk.
Here are some ways you can create peace of mind around knowing who to partner with:
Meet the business owner! Try their service or product. Get to know each other on a level that makes you feel confident in referring people to them.
Communicate your goals clearly with the potential partner, and make sure you understand their goals as well. If you have different values, beliefs, or expectations of what success looks like in this partnership, chances are the collaboration won’t be as impactful.
Look at what others are saying about their business. Read their reviews and testimonials to ensure that others have had a good experience with them.
Discuss your ideal clients. Depending on the partnership (for example, if you’re making a joint product), it may be really important for you to have a similar ideal client! Even if having the same ideal client isn’t important, you need to be able to recognize their ideal client and vice versa, so you can focus on sending them relevant leads. If you’re sending them clients who can’t afford their services, don’t need their services, don’t understand what they offer, or are interested but likely won’t ever commit, the relationship will likely end quite quickly.
When you’re just starting out creating your referral network, it might be tempting to try and connect with every nearby or related business, but quality over quantity is definitely a principle that applies here. If the partnership isn’t mutually beneficial, authentic, and relevant to your clients, it won’t do anyone any good.
Maintain transparency. Set goals and be cognizant of your partner’s goals. Focus on expanding your reach in a targeted way. Offer value and build relationships.
Cultivating referral partners won’t bring you overnight success. But it is an effective marketing strategy with longevity that’s sure to bring you consistent leads if you put the time and energy in upfront.