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Relationship Management

While this article focuses on managing the relationship between your nonprofit and the organizations that act as referral sources, it applies equally well to any of the organizational relationships your nonprofit may have (corporate donors, grant makers, significant vendors, etc.).

Depending on the size of the referring organization, there may be several layers of management between those making the referrals and those who manage the organization.  The health of the relationship between your nonprofit and the referral source depends on having everyone in the referring organization highly engaged and passionate about the relationship.  Keeping the relationship healthy requires your organization to monitor the satisfaction, enthusiasm, and engagement of the referring organization.

Part of the monitoring process includes knowing how the referral source makes decisions, who has responsibility for which referral-related decisions, and who has to approve referral decisions.  As you can imagine, a blind spot could result in an unexpected and unnecessary disruption in your flow of referrals.  The cost of repairing the relationship may be minor compared to the impact the disruption will have on your internal processes (staffing, inventory, scheduling, etc.).

Monitoring is part of the larger process of cultivating the relationship to ensure it meets everyone one’s expectations, is effective, and beneficial to the clients as well as all concerned.  When the clients are happy with the referral process and more than satisfied with the results from both organizations, it is much easier to keep the referring organization’s management engaged.

Five key points to keep in mind:

Influentials – Within every chain of activity there are individuals whose indirect relationship to the activity influences the activity.  They could be people in accounting or finance even though the activity has nothing directly to do with income, expenses, or cash flow.  When the Influentials are ignored, it creates a blind spot.  Therefore, identify and monitor the Influentials with the same diligence you use with the direct participants.  Since the Influentials are indirect, your only way to identify and monitor them may be through your contact with direct participants.

Create a Team – Depending on the size of the referring organization, you may want to employ a team of people in the cultivation process.  For instance, you may want to use a senior executive or board member to cultivate the senior leadership at the referring organization and use your programing staff to cultivate the relationship with those making the referrals.  The team and its ability to share information will help to ensure the organizational relationship is never dependent on just one individual on either side.  That will add sustainability and stability to the relationship.  Depending on the number and size of your referring sources as well as the size of your nonprofit, you may want to have multiple teams.

Periodic Assessment – Periodically have your team assess what they know about the referring organization’s satisfaction, engagement, and decision-making.  They should also identify the things they wish they knew and develop a strategy for discovering that information.

Focus on Drivers – Know what is driving the relationship from both sides.  Monitoring the drivers as well as the individuals will help you foresee changes and influence the change process by adjusting before it has an impact on your nonprofit.

Ownership – Empower and enable your referral management teams to do what is necessary to keep the relationship healthy.  When referrals sources are effective they are a valuable part of the health, success, and sustainability of your nonprofit.  Within reasonable limits, the teams need to have the agility and authority to respond quickly to changes at the referral sources.  They also need to be fully accountable for the health and effectiveness of the relationships as well as the satisfaction of the referral sources at all levels.

Next Step:

Ensure that all decisions concerning referral sources are mission and client centric

Monitor the people directly and indirectly involved in the referral relationship as well as factors that drive the relationship from both sides

Use the referral source’s satisfaction and the durability of the relationship as success measures for the relationship management teams

Since referrals drive revenue and the number of clients served, it easy to think that the success of the relationship can be easily determined by the number of referrals.  However, the success of your nonprofit and probably the success of your referral sources are driven by the fulfillment of your mission’s promises.  Those promises are most easily kept by serving the right clients rather than by the number of clients.  In addition, the right clients are often the most inexpensive clients to serve.  Therefore, the quality of the clients, the financials, and the numbers of clients served are optimized by focusing on the mission.

Effective referral sources are worth the effort it takes to cultivate their effectiveness.  Once you have created a highly-effective referral source, it takes comparatively little effort to sustain and grow the relationship.

Take it Further:

Use the preceding process for donor and volunteer referral sources

Use the preceding process of managing relationships with essential business partners

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