Engaged Referral Sources

A steady flow of referred clients from a source depends on four factors.  Each referral source must understand your services and which prospective clients are a good fit, be well-managed, receive significant benefits from the relationship, and be highly engaged.

It may seem like determining the engagement of a referral source is as simple as looking at the right numbers since one can measure a referral source’s understanding of your services, the effectiveness of the relationship, and the benefits a referral source receives from the relationship.  However, engagement depends on emotions.  Therefore, it is possible to have all the right numbers and have a disengaged referral source.

Here is a simple example.  Let us assume that a particular store carries all of the items your friend needs for a camping trip.  The selection is excellent.  The prices are the best in town.  However, the only time your friend can shop is after dark, the parking lot is poorly lit, and the store is located in a rough neighborhood.  It is unlikely you will refer your friend to the store because you know of your friend’s concern for safety.  In addition, neither the store nor your friend are likely to be aware of your decision-making process.

Your referral sources and prospective referral sources are using similar criteria.  Since your referral sources are probably members of an organization, there are several decision makers.  One of course is the primary referrer.  Supporting that person are leaders and managers who have a direct and indirect influence on the selection process.  Because of their positions in the organization, each brings a unique set of biases and emotions to the decision-making process as well as goals and expectations.

How well your nonprofit satisfies the biases and emotions of each of the individuals and how successfully the goals and expectations are met determines the level of engagement of each referral source.  In general terms, engagement depends on:

Keeping Your Promises – The wide range of individuals means that all promises must be kept.  For example, if the referral source’s CFO is involved in the process because of the size of the relationship (number of clients and revenue associated with those clients), the CFO’s concern maybe that your nonprofit remain financially stable because of the impact your instability might have on their business or reputation.

Your Reputation – Everyone at the referral source must feel that your nonprofit’s reputation and the reputation of their primary contact at your nonprofit will enhance their reputation and the reputation of their organization.

Your Fit – Your nonprofit must be the best service provider for those the referral source sends your way.

The referral organization wants to feel confident that they will never regret having a relationship with your nonprofit.  Missteps happen in any relationship.  How well your nonprofit recovers influences how comfortable the referral organization will be with sustaining the relationship.

Next Step:

Select referral sources with missions that are complementary to yours

Select referral sources with similar values

Establish clear, measurable goals for the relationship

Meet frequently with all levels within your referral organizations

Resolve missteps quickly and to everyone’s satisfaction

While it is possible to have a highly effective referral source with very little in common with your nonprofit, it has a lower probability of durability and will require significantly more effort to sustain the relationship.  In many cases, the relationship ends because one or both sides feel it is more work than it is worth.  Obviously, a referral from any source is a benefit.  However, the effort required to cultivate the relationship can sometime exceed the economic or mission value of the relationship.

Limiting the recruiting, nurturing, and managing of referral sources to those with complementary missions and similar values limits the number of referral sources your nonprofit will have.  If they are highly-effective relationships, even a few will have a significant impact on your nonprofit’s sustainability, success, and reputation.

While a highly effective referral network takes work, it pays large dividends.  Every effective referral source becomes a key source of sustainability.  A large, growing, and consistent source of clients is a good foundation for growth.  The effectiveness of your value chain (the client flow through your referral source and your nonprofit) raises the value of what your nonprofit does for the community and your clients and it builds your reputation.  The mutual accountability of the value chain improves client outcomes, raises client satisfaction, and makes it easier for granting sources to have confidence in your programing.  Your growth and enhanced success will help increase donor support (number of donor and volunteers, donor generosity, donor engagement, and donor loyalty).

Take It Further:

Apply the same process to your donor, volunteer, and advocacy referral sources

Create a formal process for selecting, recruiting, cultivating, and managing your referral sources


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