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New clients come from multiple sources. One rich source of new business that may not always be top of mind for HR consultants is referral partners—other professionals who have a network of contacts that represent your potential clients, explained Lauren Cook, of Moldave Designs, a graphic-design and marketing firm in Mountainside, N.J.
Cook is part of a referral group of about 30 people in noncompeting businesses. “Anyone who is looking for new business is a potential referral partner, especially if they sell a different product or service to the same audience as you,” she said.
Strategic Networking to Build Referral Partnerships
Business networking groups can be a great place to find referral partners. “The best way to approach anyone is to ask how you can help them,” Cook said. Building the relationship effectively is based on helping your referral partners be successful, being proactive in terms of communication and being very specific about what you need.
Developing referral networks is nothing new in some professions. “I think so many businesses miss the mark when it comes to referral partners,” said Lisa Decker, a certified divorce financial analyst (CDFA) and principal of Divorce Money Matters, based in Kennesaw, Ga. She uses and recommends to HR consultants this three-part system for developing and nurturing referral partners:
“We have a lot of relationships with referral partners,” said Laura Doehle, director of client services at Resourceful HR, LLC in Seattle. For her firm, benefits brokers are a good example. “We work with a lot of benefits brokers when we’re doing our outsourced HR because we’re serving as a company’s HR representative,” she explained. This allows Resourceful HR to recommend benefits brokers who may meet their clients’ needs and vice versa, she added.
Dory Willer, SPHR, PCC, who has owned an executive coaching business for 15 years, said she has worked with referral partners for many years. “When I first left the corporate world, as a VP of HR, and opened my private practice, I had three business building strategies—one of those strategies was referrals.” The other two were generating PR and speaking. Today, she said, the majority of her business comes to her through referrals. Willer is the founder and principal of Beacon Quest, a coaching firm based in San Francisco.
Best Practices in Identifying and Nurturing Referral Partners
Doehle suggests that a good first step for HR consultants is to review their existing client list and consider what types of services they may currently be outsourcing or the vendors they are using. These can provide clues to the types of relationships they might nurture to develop referral networks.
Another potential source: the competition, noted Christine Clifford, author of Let’s Close a Deal! Turn Contacts Into Paying Customers for Your Company, Product, Service or Cause (Wiley & Sons, 2013). It may seem counterintuitive, but Clifford said she often partners with competitors.
Other human resource professionals who offer similar, if not identical, products or services and comparable fees can be good referral partners, Clifford observed. She recommends that HR consultants keep a list of others who offer similar services so that when they are unable to fulfill a request, they can refer potential clients to other qualified practitioners.
Some of these arrangements are formal; others less so.
Willer took a formal approach to creating her referral network, establishing what she calls “spheres of referrals.” One sphere involved referrals that came through colleagues who may have been approached by a prospect but determined that they were not the ideal fit. Another sphere included professionals in other fields whose clients might benefit from coaching services—employment law attorneys, third-party benefits providers and payroll processors.
“It was vitally important that they knew me and that I could convey easily who the ideal client for me would be,” she said.
Cook noted that it can be helpful to have a one- or two-sentence statement about your business that clearly explains what you do and why you’re different—i.e., your elevator speech. “Providing referral partners with this statement can make it easy for them to refer to it or paste it into an e-mail when they want to give you a referral,” she said.
Denise Altman of Altman Initiative Group, Inc. in Denver, N.C., runs 6 Degrees, a group that helps professionals develop referral partnerships. She offered these additional tips for HR consultants:
“The benefits of having strong partnerships are enormous,” said Clifford. “It alleviates your workload, brings fresh and new ideas into your company or organization, takes pressure off of you to be ‘all things to all people,’ and adds depth and growth to your business.”
Lin Grensing-Pophal, SPHR, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues.
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