The truth is most people don’t understand that referral marketing is – by far – your most powerful sales and marketing tactic.
That’s right…it is not Snapchat or Periscope or some other latest social media channel.
And no, it’s not cold calling or a tradeshow sponsorship.
While all of those may work and complement your overall sales and marketing strategy…nothing has the ability to directly connect your efforts with new clients like referrals.
Unfortunately, Referral Marketing is the least utilized and least understood business growth tactic.
But most people only dabble in referral marketing – they get a few referrals here and there so they don’t take it seriously as the powerful tactic that it is…because they don’t understand how referrals actually works.
Just about every business can benefit from a referral marketing strategy but there are a few keys you must know if you truly want to understand, leverage and capitalize on referrals.
Eighty-four percent (84%) of people trust referrals and recommendation from people they know (Nielsen). Referrals work so well because of the trust factor. Referral marketing is the only tactic in a sales and marketing strategy that leverages trust and that trust is powerful. The trust a person feels for you and your business when they refer someone to you is transferred to the person who needs your service. Think of that trust as speed in your sales process. The prospect needing your services shows up already trusting you so she can move more quickly to get to know you and like you (the two other components in the sales process). Prospects that are referred are what I call “ready to go” – all that needs to be determined is if we are a fit to work together and if I can truly help them solve their pain, issues or concerns.
My guess is though you understand the transfer of trust in referrals. But you still aren’t leveraging referrals in your business.
The reason for that could be because you fall victim to one or more of a few referral myths. These myths keep you from believing your business can have a steady and consistent stream of referrals. But a steady and consistent stream is completely possible and is my reality. In 2014 I received 112 referrals, in 2015 I received 101 referrals and for 2016 I am on pace for 100+ referrals again (update: 103 referrals were received in 2016).
But I am not an anomaly.
As a business and productivity coach my clients noticed the explosion of my business and when asked what was causing the growth I told them about my referral marketing strategy. Quickly, teaching others how to build, execute and sustain (by automation) referral growth in their business became a main focus of my coaching practice. It is thrilling to watch my clients have the same kind of success that I am having.
From having my first business failure more than five years ago to having a second business that is healthy, growing and successful…the biggest difference is my referral marketing strategy.
So if you would love to increase and systematize referrals in your business let’s take a moment to set the record straight on the referral myths you may be falsely believing.
Myth 1: To receive referrals you have to always be asking
False, false, false. If you are always asking for referrals, then you are doing it wrong. I teach my clients how to ask without asking so we can cultivate referrals by being authentic and staying top of mind. If some sales coach or boss told you to get referrals you need to ask every person you meet every single day there is a reason you aren’t getting referrals…because that tactic doesn’t work and more than likely you refused to do it. (Good for you.)
Myth 2: Referrals are inherently inconsistent so you can’t rely on them as a source for new clients.
I grew my referrals from 60% of my new client base to over 85% and now I am closing in on 95%. Referral marketing is the main tactic in my sales and marketing strategy…it didn’t start that way but I cultivated it so it is my main source of new clients.
Myth 3: Referral only work for B2C companies and professionals, not B2B.
Completely false. I was just working with a client the other day who runs a medical device company (they are a member of my Growth By Referrals online community). As we reviewed their strategy for the rest of 2016 they will leverage their centers of influence as new sources of referrals.
Myth 4: Referrals are the same as word of mouth buzz. (aka – something I don’t control)
Nope. A referral has one key component that word of mouth is missing – the connection. When I refer someone to you I don’t just tell them how great you are…I then send an email (more likely) connecting the two of you together and letting you know why the person I am referring needs your help.
Want to learn more? Download my complimentary guide on the 4 Reasons You Don’t Get Referrals & What to Do About It to learn the right answers, strategies and quick fixes to overcome your lack of business referrals. This guide will expose the four most common reasons someone hasn’t unleashed a referral explosion in their business and provides ways to fix them.
What myths do you find yourself believing when it comes to generating and receiving referrals? Please share in the comments!