The Dirty Little Secret about Referrals

Six steps to make referrals work

Referrals are great.  Someone else vouches for you, and by doing so, they create a bridge between your world and your prospects’ world in a way that few marketing techniques can. 

There is only one problem: banking on referrals is a lousy strategy. 

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In fact, it isn’t a strategy at all. 

I often work with businesses who have built themselves on referral and word of mouth.  Like one client who grew a multimillion-dollar business without any intentional marketing at all. 

They did it entirely on word of mouth and referrals. 

Which was great, until the referrals dried up. 

And business vanished. 

Encouraging others to advocate for your business through testimonials and referrals is a key part of the marketing funnel.  It is a great way to expand your business. 

But you can’t plan referrals.  People make referrals when it works for them, not when it works for you.  And while you may have a good month this month, you can’t plan the next one or the one after. 

So, if your strategy is referrals, you can quickly wake up from a long string of projects and find your sales pipeline empty. 

Discovering that you have a team of people to pay and no business to pay them with is an awful feeling. 

The other challenge is that referrals are not a guaranteed sale. 

They are predisposed to working with you but not necessarily sold. 

They jump right to the consideration phase of the marketing funnel, where prospects seek information about you and your services, but you must still nurture them along through that process to the sale. 

One company we worked with had an outdated story and a 20-year-old website that looked awful.  They wondered why they weren’t converting referrals, but it was obvious: when referrals checked them out they immediately went elsewhere. 

When we showed them the problem, they told us they didn’t have a digital strategy.  They didn’t use digital, they didn’t care about digital.

But their prospects did.  It doesn’t matter if you want to ignore a channel, all that matters is that your customers don't.

These days everybody checks you out online first. 

So, like it or not, everybody has a digital strategy.  This company's tactic was to show people that they were decades out of date and were tragically out of touch. 

It was a great way to keep potential clients and referrals at bay.   

However, they had enough interest that refining their story and refreshing the website worked like magic.  The pipeline filled up, and their problem shifted from imminent demise to keeping up with the flow.

You want to cultivate advocacy from your clients, you want them to give you referrals, but you don’t want that to be your only source of leads. 

And you must ensure that you have a marketing strategy that catches the referrals you do get. It is a tragic waste of effort to get referrals then abandon them.

To create your strategy:

  1. Start with digital. The reason we use digital so much is that it is much less expensive than hiring a team of people to interact with potential clients constantly. You can automate much of the process and engage people in your sleep.

  2. Develop a website that connects. You have 8 seconds to explain the problem you solve and for whom. So be succinct.

  3. Create a process. Think about the customer journey. What is their first step on your website, and their second, and their third? How do you want them to experience interacting with you?

  4. Develop a lead magnet that will honestly and authentically engage your prospects in exchange for their contact information.

  5. Craft a nurturing e-mail sequence that helps them understand what you do so they get to know you and understand how your world can impact theirs.

  6. Follow up when people interact with your e-mails – this is when you can have a sales conversation.

And when you have completed a project for someone, encourage them to advocate for you.  Referrals are important; just not a strategy.

The beautiful thing is that creating a digital strategy isn’t difficult.  It takes some effort up front, but once it is running, you can step away from it and do other things. 

Like, deliver on projects. 

So that you get more referrals.

And when you have a solid, effective, digital marketing strategy, you will be able to catch those referrals and ensure that they are one part of a whole rather than the entirety of your marketing strategy.