Are Referrals an Effective Marketing Strategy?
Updated: Jan 15
We've been talking to some very smart people, perhaps you are one of those we have recently talked to. The topic we were discussing was the value of strategic, purposeful business networking. But the real deep down subject matter was referral-based sales systems. We are proud, yes proud to say that 99% of our client base was created through referrals. When we first started to measure this statistic, we were doing so to help us figure out what type of marketing and sales efforts we should deploy to continue to grow our client base.
We came to realize (and were reinforced by those very smart people that we had been talking to) that our marketing and sales efforts should continue to focus on building a strong referral network. It is important to note that we do not pay commissions to our referrers. They refer us because they know that we will do everything in our power to exceed the expectations of anyone that we are referred to. So what are you doing to build your referral base?
Are you accepting every invitation to a business function that hits your in box?
Have you joined a group of synergistic people that you can help with their business development plans as much as they can help you with yours?
Is the chamber of commerce the right place for you to be investing your networking time?
Are you active in trade associations that are relevant to your business?
Are you just waiting for the right networking opportunity to come your way?
If your normal business efforts build long-term relationships with your customers or clients, then you should highly consider networking as one of your most important marketing initiatives. But don't expect immediate results. Building a referral network takes time. People need to develop trust in you and that doesn't typically happen overnight. That is the one reason that your current customer or client base is your best opportunity for referrals. They know your organization and what you deliver. They probably know people that are in similar positions at other companies. This fact alone makes them excellent referral sources.
Let us know what you are doing to drive strong referrals to your business. We would love to share your success stories with others.