Tag Archives: Referral Strategies

How Much of Your Business Is By Referral?

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Even in this era of so much emphasis on Social Media, including Facebook, Twitter, LinkedIn, YouTube and other channels as lead generators, I often hear from people that their new business opportunities still come almost 100% by referral. This is particularly
true for small businesses. While 100% may be the goal, usually the real number is significantly lower. Folks aren’t lying; they’re just operating under a misconception.

This misconception comes from the lack of a system that develops and tracks lead generation and more specifically, referral generation. If you want to build your business through referrals, you need a system to develop and track them. That means your system
includes a way to track and measure. While “paperwork” is, for me, the least attractive part of sales, (unless the paperwork is a contract) results are erratic and unpredictable without it. Who is giving you referrals? Who are you referring? What are you doing to earn referrals? What is your closing percentage for referrals vs. other lead sources? Are you in the right networks? Are the referrals you are receiving your ideal clients or are they “anybody” or “somebody”?

This fifth “M” of the 5 M’s of Marketing may be the least glamorous of them all, but it can be the difference between a hobby and a business. So, if you want referrals to be a predictable part of your new business generation instead of just a happy surprise, you need a system. And a big part of that system is Measuring your activities and results.

What Is WOM and Why Do I Need Some?

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New Rules of Marketing (image)I picked up a book last week, The New Rules of Marketing & PR by David Meerman Scott. It set my hair on fire! I’’ll get on that topic another time, (not the hair, the book) but right now I want to comment on something that kept coming to mind while I was reading. That is, how people use the terms “word of mouth marketing”, “referral marketing”, and “networking” when talking about obtaining leads. I’’ll add another that I like better, “relationship marketing”. (That may be redundant, because marketing is about creating and maintaining relationships.)

But while reading the book, the term that kept coming to mind was “word of mouth”. The reason is, most of the business people I talk with seek the holy grail: referrals.

And so they “network”. They ask for referrals. They rely on “word of mouth”.

And this is where we are falling short.

Most of our word of mouth comes from our own mouths. There has been a lot written and said about developing referrals through building networks and developing relationships. Heck, that’’s my specialty and I’’ve learned from some of the best in the business, as well as through the school of hard knocks. But the old referral guru, Dr. Ivan Misner, said it a long time ago: word of mouth marketing. (He even created a marketing plan called the WOMBAT Plan.) But it was lost on me, like I suspect it is lost on most sales and business people. I got caught up in the tactics, the getting referrals.

Networking and building referral relationships are only one of the aspects of marketing by building word of mouth. Check out Dr. Misner’’s World’’s Best Known Marketing Secret and David Meerman Scott’’s books and learn about creating WOM. Dr. Misner’’s focuses on the fundamentals of good, old fashioned, hit the streets WOM; and Scott’’s is a high tech, changing everyday, got to keep up, cutting edge version. Both approaches valid; one a part of the other. The basic elements are the same: market, motivation, message. They just offer different media.