I came to an interesting realization about my business earlier this year, and I’m sharing what I learned in the hopes that it helps your company grow.
I spent time tracing the source of all new recruitAbility business, and I bucketed all of the revenue into these categories:
- Return clients
- Cold/outbound outreach
- Partner/client and friend referrals
I’ve long known that our network generates the bulk of our new business, but it’s actually 90% of our new business!
A statistic that lopsided made me reconsider our approach to business development, and it also underlines what I’ve felt for a while about sales.
The Trust Factor In Business Development
Transactional sales is often defined by high-volume, low-trust interactions. If you’ve heard people refer to sales as “a numbers game,” then you understand what I’m talking about.
It’s an impersonal approach, but it can produce results. The fact that we receive so many unsolicited LinkedIn messages proves that this approach can work, or else nobody would waste the time or energy.
But the fact is that this sales method has a low win rate and it’s time-consuming to turn a cold lead into a new customer. There’s due diligence required, and it takes a lot of communication to build rapport and to understand if the fit is right.
A better approach is to get business referrals from friends or partners who vouch for you. Yes, this is not breaking news. But it’s so obvious that it’s often overlooked.
In the same way that ratings & reviews facilitate e-commerce transactions, when someone you trust recommends their friend or client, you’ve bypassed many of the hang-ups associated with cold outreach.
The benefits of referrals include:
- Conversion rate: You’re pre-qualified, so the close rate should be higher.
- Time savings: You already know that there’s a need, so the sales cycle should be faster.
- Cost savings: A large enough referral network may help you avoid hiring a large sales team.
How To Cultivate A Partner Network
We introduced our partner program in Q2 2020, and when I reflect on how we’ve grown this part of our business, I can boil down our success to these factors and recommendations:
- Mutual benefits: Asking for something without offering anything in return is not a wise strategy. If you’re offering commissions to companies or clients who refer business to you, make sure that you’re willing and able to return the favor.
- Complementary services: The best partners offer services that complement your own. For instance, when we refer clients to KungFu.ai, an AI services firm, this can lead to job orders for us to fill.
- Parallel businesses: Think about your target customer. Consider adjacent businesses who are also serving that customer. It’s smart to build alliances with those businesses because you don’t compete with each other, but you often work with the same clients in different ways.
- Upstream businesses: Who hears news about your target customer before you learn that news? For instance, when companies are hiring a lot of employees, commercial real estate firms often are the first ones to know. So for us, it’s great to have companies such as CBRE’s Austin office as a partner.
- Personal connections: Friends, family and former coworkers are all great sources of leads. Make sure when you speak to them that you don’t just gloss over your job. If they don’t understand your business, they won’t be able to identify companies that need your service or product.
Engage Your Partner Network
Once you have a network of partners, it’s important to engage with them. Your network is only as strong as the time you put toward it.
Schedule outings and make introductions. Create opportunities for collaboration. Share information. Brainstorm ideas.
Just think of natural ways to stay top of mind with your partners or your network will atrophy. This becomes harder during COVID, but it’s not impossible.
Do you have questions about building your partner network? Curious about becoming a recruitAbility partner? Contact us at email@example.com.