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   ARTICLE   |   From Scotsman Guide Commercial Edition   |   February 2007

In the Market for Referrals

Turn professional relationships into your next big lead source

Most mortgage brokers aren’t strangers to referral business. In fact, many attribute a significant portion of their applications to the family, friends and colleagues of prior clients. If the growth of your small-business pipeline depends solely on the kind words of borrowers in your file cabinets, however, you’re missing out on one of the most-profitable opportunities for new business: referral marketing.

Marketing to professionals such as accountants, real estate agents and insurance agents is a more targeted method than soliciting referrals from prior clients. These trusted advisers of the small-business community often know who may not be eligible for bank financing. You must let them know that you can provide solutions for their clients. That way, you can create more business for you and for them.

Have a plan

In any kind of marketing, you need a plan to be successful. Courting professional groups is no different. Things to consider are: selecting a target, getting their attention and conducting timely follow-up.

It may sound complex at first, but launching this type of initiative does not have to be difficult or costly. Even if you have a limited advertising budget, you can easily assemble a small, manageable campaign with the potential for phenomenal results.

Choosing a market

When selecting a target market, begin with the familiar. For example, if you already receive business from accountants, start with that group. Because you have pitched your services to that group previously, you should be comfortable addressing a group of them in larger numbers.

Before you shout your services from the rooftops, know your audience’s motivation for doing business with you. The selling points vary between professional designations. For example, you can give accountants more opportunities to provide additional service for their clients as you help their clients expand their businesses. You can help real estate agents earn more commission by providing financing for their buyers.

Remember, when marketing for referrals, it’s not about you. It’s about helping these business partners strengthen their client relationships.

Get their attention

When engaging professionals through written communication, your materials must stand out from the flat solicitations they are used to receiving. If you’re using direct mail, letters are typically more effective than postcards.

Of course, a well-crafted letter isn’t even worth the price of postage unless it gets opened. That’s why it’s important to include a short message on the envelope to encourage the recipient to read further. In terms of the letter itself, your message can get lost within large blocks of text, so after a brief introduction, use bullet points to highlight the benefits of your product. End with a strong call to action.

Offering free information is a good way to make the phone ring. The promise of a referral or finder’s fee speaks even louder. Some professionals may not be permitted to accept compensation for referring business to you. If this is the case, you should highlight the fact that you will refer your own clients to them.

Making the pitch

Unlike retail marketing, where your primary goal is to generate loan applications, referral marketing is about establishing relationships — bonds that could eventually lead to new business. It may take a mailing, a follow-up phone call and even a personal visit before you make contact. If you can schedule a short meeting with a potential referral source, however, the sale should be relatively simple.

During your meeting, you don’t have to explain the rate matrix or discuss the finer points of your loan programs. Instead, reiterate the benefits of your services, how you can help their small-business clients and what’s in it for them.

Make it as easy as possible for your referral sources to know which types of clients or loan scenarios (cash business, environmentally sensitive property type, etc.) they should send to you. Some may even allow you to display your business cards or brochures in their offices.

Follow up

Regardless of how dynamic a salesperson you are, your small-commercial lending products will likely be forgotten after your presentation. That’s why it’s critical to follow up aggressively with your potential referral sources.

Thank them for the opportunity to meet with them. Ask if they have any additional questions about your products. Ask if they have identified any clients who you can help.

Sometimes, you have to make the initial move by sending business to your referral sources first. They often feel compelled to return the favor.

As you track your results, you may find that some audiences may not be a good fit for you. If a particular group is unresponsive despite your best efforts, move on to another target.

Once you have established some successful relationships in one area, it should be easy to mirror those same marketing strategies with another group, provided you adjust your selling points accordingly.

•  •  •

Referral relationships don’t happen overnight. They must be cultivated. Referral marketing is the key to making it happen, and it’s something you can start doing today. All it takes is a phone book, your natural sales ability and a commitment to follow up. It doesn’t get any easier than that.


 


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