![Personal brands: Handling business referrals (MSMEs)](http://ghheadlines.com/images/default.png)
By Bernard Kelvin CLIVE
“A referred brand is a preferred brand; and a preferred brand is a referred brand.” ? Bernard Kelvin Clive
Today, I want to discuss the handling of business referrals, along with the pros and cons, and how to approach them effectively. Many businesses, particularly MSMEs, thrive on referrals.
In my experience as a publishing consultant, brand consultant, and ghostwriter, approximately 70% of my business comes through referrals. Interestingly, a recent SignPost article (“Referral Marketing Statistics – Everything You Need to Know in 2024,” signpost.com) aligns with this observation, noting that 65% of new business opportunities come from referrals and recommendations.
When you consistently deliver quality work, you are often recommended to different circles of people who refer their colleagues to you for business. This is how many businesses, according to my findings, succeed—through the cycle of doing good work and being recommended. However, it’s good to know how to handle these referrals, especially third-party referrals. Let me explain.
The Importance of Handling Third-Party Referrals with Care
There’s a referral network that works like this: A friend who runs a similar business might recommend someone to work with you on a project.
For example, as a publishing consultant, if someone wants to write a book and I’m too busy to take on the project, I might refer them to a colleague. Either I can do the job myself or I can pass the project directly to my colleague. Regarding payment, it can go directly to my colleague or through me, but we should have a clear understanding that a certain percentage of the payment comes to me, and the rest goes to them. This setup works fine as long as the client is satisfied, and both parties are clear and content with the arrangement.
The challenge arises when the client, for subsequent business, directly approaches the third party without going through the original referrer (the first person). This can lead to problems if not handled properly. For the second person (the friend I referred the client to), the client is not originally theirs. If the client returns, they should either be rerouted through me or have a clear agreement to handle things differently. If I discover that several projects have been completed between the client and the third party without my knowledge, trust can be broken. This breach of trust could prevent me from referring further business to that colleague, damaging our professional relationship.
Maintaining Trust in Business Referral Relationships
Several clients may try to cut corners by going straight to the third person you brought on board. If you are that third person—or even if you’re in a similar position—you must be very careful not to break business relationships over such issues. I’ve seen several friends lose business because of these kinds of dealings.
Whenever a situation like this arises, it’s essential to maintain the integrity of the referral process. If a client contacts you directly after being referred, let them know that they should handle all financial matters and communications through the original referrer. Once the referrer gives you the go-ahead, you can proceed with the work. This approach ensures that everyone’s role is respected and that trust is maintained.
For example, if someone says, “This person referred me and asked you to do this work,” you should respond, “Okay, please go back to them, finalize everything, and then I’ll take care of the project.” When you do so, you keep the relationship secure and pave the way for future referrals.
Just because someone subcontracts work to you doesn’t mean you should bypass the person who originally brought you into the deal and go directly to the client. That’s not the best way to conduct business or handle relationships in the context of referrals. The client should continue working through the original referrer. Disregarding this process and pushing your colleague aside is detrimental to both the business relationship and the trust that underpins successful referrals.
The Dangers of Over-Involvement in Business Referrals
Another important aspect of referrals that I want to address is the issue of people who refer business to others but then want to be overly involved in every aspect of the process. This behavior can be detrimental to the success of the referral system. The fact that you referred someone to a business doesn’t mean you should be involved in every detail. You might not even fully understand the specifics, but you know that the person you recommended can handle it. There may be a gentleman’s agreement, a percentage, a share, or even just a thank-you—whatever the arrangement, that’s fine.
However, it’s inappropriate to constantly look over the person’s shoulder, asking how much they charged, what’s involved, and how they’re managing things. That’s not your business. Your role was to recommend someone, and that’s where your involvement should end.
All you need to ensure is that the job is being done well, the business is thriving, and everyone is fulfilling their brand promises. Trying to dig deeper into the details, asking about referral charges, or probing into how the client is being handled is neither ethical nor polite. If you tend to do this or know someone who does, it’s important to recognize that it’s not the best practice. Once you recommend a service or product, and the person is handling it well, your job is done. Everyone being satisfied is what matters.
For example, I’ve had situations where someone referred a client to me, but they continually wanted to know what was happening in the business. This kind of behavior can kill the business relationship and erode trust. Eventually, you might even question whether the recommendation was worth it. It is critical to leave the situation as it is once the recommendation is made.
Here are some of the lessons I’ve learned over the years. I lost business because I sent colleagues directly to my clients, and those colleagues then went against my back to deal with them. I’ve heard similar accounts from others, and this is a major issue that must be addressed. Don’t jeopardize your credibility; always redirect the client through the person who introduced you, unless you’ve been granted specific permission to deal directly.
On the flip side, if you have no active role in the business after making the referral, it’s best to step back. Focus on maintaining trust, ensuring product delivery, and upholding business relationships, rather than meddling in the details. Businesses thrive on referrals and recommendations, so both clients and companies must handle these relationships effectively and professionally. This approach will lead to repeat business rather than just one-off transactions. Don’t be tempted to make a quick profit from one or two referrals. Instead, prioritize satisfying the client, delivering on your brand promise, and earning more referrals and business in the long run.
Here are the main takeaways:
Key Lesson:
- Referrals are crucial for business growth. Many businesses, especially MSMEs, thrive on referrals. Delivering high-quality work can result in ongoing referrals and more company prospects.
- Manage Third-Party Referrals with Integrity: When referring work to a third party, it is critical to retain confidence and accountability. To avoid breaking the business relationship, make sure to respect the original referrer in subsequent transactions.
- Prevent Over-Involvement After Referral: Once you’ve given a reference, it’s critical to take a step back and not get involved in the intricacies of how the firm operates. Over-involvement can erode confidence and undermine the referral process.
- Trust is the foundation of successful referrals. Maintaining trust among all parties involved in a recommendation is critical for establishing long-term commercial connections and future referrals.
- Professionalism is essential in referral relationships: Both clients and businesses should handle recommendations professionally, with a focus on keeping commitments and providing great service to attract repeat business.
Practical Tips:
- Maintain Transparent Agreements: When recommending a client to a third party, create a clear understanding of payment and roles to protect everyone’s interests.
- Reroute Returning Clients: If a client you referred to someone else returns, make sure they use the original referrer to retain trust and business integrity.
- Respect Boundaries After Referring: After making a recommendation, believe that the person you recommended will handle the business professionally. Unless required, refrain from delving into the intricacies.
- Communicate Expectations: If you are the recipient of a reference, make sure to communicate effectively with both the referrer and the client to ensure that everyone’s expectations are satisfied.
- Develop Long-Term Relationships: Rather than attempting to maximize immediate gains from a recommendation, prioritize delivering on your brand promise and laying the groundwork for future referrals and ongoing business success.
I hope this helps.
Let me hear from you regarding your branding and book publishing needs.
Bernard is a leading authority on personal branding and digital book publishing in Africa. With over a decade of experience in digital publishing, he has been a trusted consultant for entrepreneurs, pastors, and individuals looking to build their brands and write their books. To learn more about Bernard and his work, visit www.BKC.name. WhatsApp: 233244961121
The post Personal brands: Handling business referrals (MSMEs) appeared first on The Business & Financial Times.
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