Client Referral Exchange: Make Money Off of Your Reputation

1000handshakeBusiness professionals looking for a way to make even more money can actually benefit financially from their reputations.  No matter what kind of business you’re in, participating in client referral exchanges can be a significant source of secondary income.

A client referral exchange is a network of business/career professionals who refer clients to one another.  Each professional in the network pays a stipend when another member refers a client to him/her.  Sometimes this is a flat fee.  Other times it may be a percentage of the business deal that occurs as a result of the referral.

Client referral exchanges are a lot like most business associations.  The purpose of most business networks (like the Chamber of Commerce) is to connect professionals to one another.  Members meet regularly.  They work together to strengthen local business relationships.  Most of all, they network with each other by building relationships which, in turn, mutually enhance each member’s business opportunities.

Client referral exchanges take this principle one step further.  Members/participants in the client referral exchange network and develop business relationships.  Additionally, they enter into partnership agreements which offer a conditional financial benefit.

Here’s an example: a medical services provider and a health supplies dealer may enter into a client referral exchange.  A medical services provider may have a client with back problems.  The professional refers him to the health supplies dealer for a back brace.  The doctor then receives a stipend for his referral.

Client referral exchanges may be formal or informal.  Two professionals who work in related fields that cross over regularly may enter into an informal private agreement.  Each agrees to pay the other for referrals.

Client referral exchanges also take place on a larger, more organized scale.  These function more like business associations.  Professionals apply to become members, and sometimes a membership fee is charged (usually for administrative and educational purposes).  These groups tend to have dozens of members.  Each of these members then receives a stipend when they refer their customers to another member of the client referral exchange, paid directly by the business receiving the referral.

You can check your local area to see if there are any organized client referral exchanges accepting members.  If not, you may want to start your own.

If you prefer to keep things on a smaller scale, you can simply directly approach local business professionals.  Look for those whose customers tend to spill into your area of business too.  (Avoid partnerships which include direct competitors.)  A good example might be a real estate agent partnering with a mortgage broker.  Pitch your idea to him or her, explaining the mutual financial benefits such a partnership could provide.

Client referral exchanges are often beneficial to all those involved for more reasons than strictly financial ones.  Members learn to work together and help one another develop good business practices which, in turn, benefit the community at large.  Members come away with the possibility of extra money, plus the combined business experience of every other member.

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