Referrals Make the World Go Round

Tuesday I had the honor of hosting a Client Appreciation Lunch. There is no doubt in my mind that I have the best group of clients of any service business in Kansas City and probably the whole world. Bright, energetic, caring leaders who strive to stretch themselves and their companies to reach the next level—and they do!

One of the reasons I wanted to honor them is that last year I tracked sales and learned that 92% of my business is from referrals–either recommendations from clients and colleagues or “self-referrals” as clients re-engage me. I knew it was high but I didn’t realize it was that high. Even more important I learned that 100% of my clients surveyed offered to refer me.

Now, what to do about it? Referrals are a great source of business because they come with built-in credibility based on the reputation of the referrer and if they are referrals from people who know the business well, like past clients, they are referring people who will benefit from the services offered. It typically leads to higher close rates and more successful experiences, which in turn bumps up referrals.

The key is to build the trend. Just because the business is coming mostly from referrals now, doesn’t mean there aren’t more referrals to be had. It is time to get proactive about generating referrals. Here are a few things you can do:

  1. Develop a list of people who have referred you or would be willing to and be sure to let them know that you appreciate it. Give them information about how to refer you, who your ideal client is and what trigger points indicate a business might benefit from working with you. Don’t assume they know everything you do because they may have worked with you on one project.
  2. Stay in touch with potential referrers; keep them posted on how referrals turn out. Let them know if you have a new opportunity or service that you are introducing. Stay top-of-mind. How often depends on the business cycle; shorter selling cycles may mean more frequent updates.
  3. Provide references for others. What goes around comes around and if you are connecting others you will be connected more often yourself.
  4. Track it. Figure out where the business is coming from; encourage those already referring, educate those who you would like to refer you in the future, and make new contacts that may develop into referral sources (such as companies that provide complementary goods and services into the same target market). You can track the whole chain of referrals–Company A referred Company B, who referred Company C–to understand the total lifetime value of a referral.
  5. Earn it. Always remember that a referral is earned and it requires the type of work that clients want to talk about to their colleagues. There are no shortcuts and excellent outcomes are the prerequisite to any referral.

At our Client Appreciation Event we asked anyone who wanted to give a testimonial to do so and here a few that we received. Thanks to all of them!!!

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