Networking and referrals

Why referrals matter

A referral arrives with trust already built: someone they know has vouched for you. Referred customers often:

• decide faster and compare fewer quotes
• are less focused on price
• become loyal customers and refer others in turn.

Referrals come from three main groups: customers, referral partners (businesses that serve the same customers) and your network (people who know what you do).

Where to network

Choose places where your customers or referral partners gather:

business.gov.au lists events and training, and state small business agencies run workshops and networking events. Try a few groups, then commit to one or two and go regularly. Relationships build over months, not one meeting.

Networking that works (without the cringe)

• Be curious. Ask people about their business, their customers and their challenges. Listen.
• Have a clear, short answer to “what do you do?”: who you help, the problem you solve and what makes you different. “I help cafés cut their power bills by fixing refrigeration problems before they become breakdowns.”
• Give first. Make introductions, share useful contacts, recommend people you trust.
• Follow up within a couple of days: a short message, a coffee, or a promised introduction.
• Stay in touch with the people who matter: an occasional call, a useful article, congratulations on their news.
• Don’t sell at networking events. Build the relationship; the business follows.

Referral partners

Referral partners serve the same customers as you, without competing. Examples:

• a bookkeeper and an accountant
• a real estate agent, a conveyancer and a building inspector
• a wedding photographer, a florist and a venue
• an electrician, a plumber and a builder
• a physiotherapist and a personal trainer.

To build partnerships:

1. List businesses your customers use before, during and after they use you.
2. Meet them, learn how they work and who their ideal customers are.
3. Refer them first when you genuinely can.
4. Agree how referrals work: how you’ll introduce clients and keep each other updated.
5. Protect your reputation. Only refer businesses you’d trust with your own customers.
6. Be transparent. If you receive a fee or commission for referring, tell the customer.

Some industries have specific rules about referral fees and commissions, such as financial services, real estate and health. Check what applies to you.

Asking customers for referrals

Most happy customers are willing to refer you; they just don’t think of it.

• Ask at the right moment: when the job’s finished and they’re pleased, or when they thank you.
• Be specific: “If you know anyone else in the street thinking about solar, I’d really appreciate an introduction.”
• Make it easy: a short message they can forward, a link to your booking page, or a few business cards.
• Thank every referrer, whether or not the referral becomes a sale, and tell them how it went (without sharing private details).
• Ask for reviews too. Reviews help strangers trust you. They must be genuine, and you shouldn’t offer incentives only for positive reviews.

Referral rewards and programs

Thank-you gifts, discounts and referral credits can work well. The ACCC’s guidance on referral selling:

• You can offer existing customers a reward for referring a friend, for example a voucher when a referred friend signs up.
• When making a new sale, you can give a customer a discount in exchange for friends’ contact details, but the customer must get the discount whether or not the friends buy anything. Making the discount depend on a sale to the people referred is against the law.

Also:

• Don’t contact referred people for marketing by email or text unless they’ve consented. Under the Spam Act, a friend passing on their details isn’t consent from the person themselves. A personal introduction from the referrer, or the referred person contacting you, is better.
• Keep the terms clear: what the reward is, when it’s given and any conditions.

Keep the referral engine running

• Do great work. Every referral strategy depends on it. See Customer service that keeps customers coming back.
• Stay visible to past customers with occasional useful updates. See Email marketing that people read.
• Track referrals: record who referred each new customer, so you can thank them and see which relationships matter most. See Measuring marketing.
• Review your network every few months: who refers you, who you refer, and who you’ve lost touch with.

Common questions

Where should a small business owner network?

Where your customers and referral partners gather: chambers of commerce, industry associations, structured referral groups, coworking spaces, community groups, business events and LinkedIn. Try a few, then commit to one or two and go regularly.

How do I ask customers for referrals?

Ask when they’re happiest, such as when the job’s finished, be specific about who you can help, make it easy with a message they can forward, and thank every referrer.

Is it legal to reward customers for referrals?

Yes, with care. You can reward existing customers for referring a friend. But under the ACCC’s guidance on referral selling, a discount can’t depend on the business making a sale to the people referred.

What is a referral partner?

A business that serves the same customers as you without competing, such as a bookkeeper and an accountant, or a photographer, florist and venue. Refer them first when you genuinely can, and only refer businesses you trust.