How to build a referral network in 12 months

For brokers looking to expand into business lending or develop their lending network further, recommendations and referrals can fuel growth. Here’s a 12-month plan for building a recommendation and referral program – with three- and six-month milestones.  

Expanding from residential lending into commercial finance? Already combed your residential book to identify which existing clients are self-employed and sole traders? Next, it’s time to develop referral networks specifically for business clients.  

Business lending referral networks should mirror the programs that nurture residential referrers – with focus on both word-of-mouth recommendations from existing clients and productive partnerships with allied professionals.  

Today, we’re going to share some of the first steps that we recommend you take when you’re looking to grow or establish your own referral networks, from who you should be trying to include in your network, to how you should approach them and what you can offer them in return. 

3-month goal: Create a customer referral program

Many small business owners and leaders anticipate that referrals will be the primary source of revenue growth over the next 12 months, with 37 per cent expecting new customers to be recommended by existing customers.* 

For brokers who are doing a great job for their clients, who understand their clients’ needs and how to meet them, gaining those recommendations can be as simple as asking for them. 

Create an automated email that is sent to clients after settlement and once they are funded – you don’t want any doubt in their mind that you have delivered for them. Greet the client by name and use a conversational tone, warmly thank them for their business and express your pleasure at having assisted them and ask them to leave you a Google review or refer you to another small business owner in their network. 

When a new client comes to you from a recommendation from an existing client, acknowledge the referrer. Reaching out with a simple ‘thank you’ note or a small gift reinforces that you value the referrer and validates their decision to recommend you.

6-month goal: Be visible in professional groups

Attend in-person events and join LinkedIn groups for businesses, whether local businesses or industry-specific groups – you’re looking for events and groups featuring professionals whose clients you would like to work with. Once there, join conversations and offer your insights to start building relationships.  

“To attract new direct clients, it pays to be visible,” Whiteroom Finance’s Chris White told us recently. “If I had my time over, I’d spend a lot more time on social media – joining local groups, letting people know we can help them, and just engaging in conversations.  

“In addition to online, be visible in the local community – joining your chamber of commerce, for example, can be valuable. Remember, you’re there to build relationships, not sell.”  

A few months will provide a sense of where the value lies for you – which events to continue to attend and which conversations to remain a part of – and will set the foundation for building your network of allied professionals. 

12-month goal: Create a network of allied professionals 

Identifying the professions that you’d like to work with – consider the other businesses your ideal commercial borrower deals with and trusts, such as accountants, bookkeepers, financial advisers, outsourced HR, IT suppliers and more. 

“Referral partnerships are a great source of new clients,” says Chris. “We’ve got partnerships set up with accounting firms, business consultants and businesses in the industry. Build the relationships and, if appropriate, suggest a referral agreement.”   

You should have a top 10 list of the professionals you want to get to know, but don’t rush into an agreement with any prospective referral partner – the wrong person’s recommendations are not going to offer you value, and nor will a referral to them offer your existing clients value.  

Ahead of any relationship-building conversations, fine-tune your understanding of what sets you apart from other finance brokers, what your values are and who your ideal clients are – look for alignment on each point.  

Year two onwards: Maintenance phase

An active network of a dozen referral partners can be incredibly valuable – nurturing it should be an ongoing focus. 

This means thanking referrers when they send a client your way – whether with a personal note or a small gift, or prompt delivery of any agreed payment – and ensuring you also recommend your referral partners when working with them would be in your clients’ best interests.  

Finance broker Todd O’Neill recently spoke with us about his referral network of accountants, real estate agents and financial planners – which is the sole source of new clients for his business Xenium Group.  

“It’s easier to put on events, lunches or training seminars for 12 referral partners than the whole client base,” says Todd. “They’re coming across more clients every day than we could possibly target through advertising, and those relationships are tremendously important.” 

Start small, build and maintain – a critical mass of referral and recommendation networks can add up over time, but in the beginning, strong programs formed with a few partners are achievable, add value quickly and provide a testing ground for your new growth tactic. 

*YouGov SME Sentiment Tracker November 2022