It is well established that referrals from trusted 3rd party sources are one of the best ways of generating solid and repeat business leads, yet many referral relationships don’t succeed. So how do you establish the referral relationship that works for both parties?  Follow these simple principles to ensure your referral relationships stay on track.

CEO of Collins Home Loans, Rob Emmett says that getting a referral relationships right takes time and effort.

"It is important to remember that establishing a successful referral relationship is rarely a linear process - you can't just 'set and forget' – you need to be agile and be prepared to build the relationship over time, which takes patience and consistency. Like all relationships, referral relationships need to be nurtured and managed”. he says.

Walk a mile in my shoes

Building an effective referral relationship means understanding the pain points for your potential partner. Pain points are key issues that your partner deals with in their business - that you as a referral partner could potentially help solve or lessen.

Let’s look at a Financial Planner for example, from a medium sized firm who specialises in Self Managed Super Funds. Their typical pain point might be debt management solutions for their clients and a solid referral relationship with mortgage broker would be beneficial.

"Understandably, financial planners are typically very client-focused and the integrity of the relationship with their clients is paramount. They need to be sure they can trust a referral sources to take care of their clients, like they do” Emmett says.

What are the typical road-blocks in a referral relationship?

1. A focus on core business - for financial planners or accountants this can mean missed opportunities to suggest value-added services such as mortgage broking.
2. No sales process - not sure what to say or how to introduce the opportunity.
3. Fearful of the hard sell - can see the benefit but doesn't want to come across as too pushy.

How to build a solid referral relationship

The first step is to understand what is important to your potential referral sources and why they would want to engage with you in the first place,

What can you offer them?

• How can you provide value to their clients?
• Can you ensure a seamless experience for their clients?
• What steps can you put in place to ensure any referral experience reflects well on them and their business?

What are their pain points?

• Are they seeking to retain control of their clients’ relationship.
• Do they know how to recommend a referral source?
• Are they focused on their core service and not thinking about the value-add?
• Do they not have the sales / services process down pat to execute a successful recommendation?

Present the solution:

• Demonstrate how they can improve client loyalty by providing value-added services.
• Explain what services and solutions are on offer and how these would benefit their clients.
• Understand their sales cycle and identify an opportune time to introduce your product/service with specific marketing strategies.
• And finally provide a suggested introduction they could incorporate into their client meeting such as:

“John, I’ve noticed that your home loan is over three years old now and in that time there has been 4 rate reductions.  I would like you to meet with Rob, a mortgage broker, to review your loan position to ensure you remain on the most competitive terms for your circumstances.  We find that most of our clients benefit positively from the review process they undertake, either through negotiation of a better interest rate or enhanced terms'.  If you’re happy I’ll ask him to call you and arrange a meeting”.

Remember, people are naturally drawn to people they like and trust. Mutual interests and a knack for friendly banter goes along way to setting the parameters of a solid relationship.

To find out more about how a mortgage broker could be a beneficial referral partner, providing value added services and advice to you and your clients, contact us  today.