The Danger of Referrals

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What’s the absolute BEST way to attract new prospects, leads, and clients? Your classic word-of-mouth. Because it’s personal, and it’s powerful. Absolutely NOTHING beats a recommendation from a peer or friend. 

It’s a fantastic opportunity to get a new prospect interested in your business through someone that they trust and who has vouched for you. In this way, there’s an element of trust that advertisement just can’t provide. 

However, word-of-mouth and referrals can be a two-edged sword…

Yes, they can bring you targeted clients but there’s danger in referrals.

In this #MarketingMinute, we’re going to dive deep into why it’s dangerous to rely on referrals and what you can do instead to get leads consistently. 

Why Relying on Referrals is Risky Business

If you currently rely on referrals for the majority of business, I don’t have to tell you the downsides, you’re probably well aware of them, especially in economies like the one we have right now…

• People have pulled back their budgets
• Businesses are reevaluating their strategies
• You might have had cancellations with current clients
• You might have had to extend your pipeline because people just need to wait until things get better before they move. 

In other words, their priorities have shifted inward. In crunchtime, any business is going to focus on their own needs instead of passing business on to someone else.  

That’s why if referrals are your primary source of leads and new clients, you’re (likely) heading for trouble. 

Referrals are an unreliable growth engine because you’re putting the growth of your business in someone else’s hands. In good times the referrals are rolling in and life is great. But that may not (and often will not) last forever. The moment your well of referrals dries up you’ll be sitting there helpless and empty-handed. 

By not having full control of your pipeline you are putting your business at risk of slumps. No predictability. No stability. You have to put an emphasis on creating a predictable system for generating sales opportunities on your own. 

If you're looking for a predictable, cost-effective, way of getting sales opportunities every single month I suggest you sign up for an upcoming workshop (no cost) with my team and I. 

Remember that people can’t find you if they don’t know about you; it really doesn’t matter how good your product or service is if no one knows about you.

People may hear about you via referrals, but again, it’s usually not enough - in either quantity or consistency - to actually grow a business. The truth is, it’s simply not enough to wait for prospects to come knocking.

If you struggle with getting leads outside of referrals, know that you’re not alone in this. Over the years, I’ve personally spoken to hundreds of businesses who struggle with this, and this is one of the major reasons my business exists - to help businesses get leads consistently so that they don’t struggle with the draining “feast or famine” cash flow cycles that keep them in a plateau.

Turns out, in a survey of 7,500 small businesses conducted by Alignable, the overwhelming majority of small business owners rely on word-of-mouth referrals to get clients. 

That’s good and bad news. Bad because it means a lot of businesses struggle when new referrals aren’t coming in and good because if you can find a way to get consistent leads in the pipeline, it puts you on an upward trajectory that your competitors won’t be able to compete with.

Reducing Risk is the Name of the Game

Ok, so let’s talk about how you can avoid this fate. 

First, you need a system you can rely on. I’m specifically talking about an outbound lead generation and sales development system that will get quality prospects on your calendar ready to talk about how you can help them.

So what do you need for that?

You need to know who your ideal client is. That means being familiar with their demographic, and psychographic data, as well as the work and lifestyle choices they confront on a daily or frequent basis.

Second, you need a way to proactively find your perfect prospective clients and utilize a system that builds their trust in you. This means you need to choose a platform that allows you to either:

Connect with them one-on-one via social media messaging (LinkedIn messaging, for example), email, phone calls, or even face to face (it might take a while for the latter to come back!)...

AND/OR

That will pique the interest of your prospects at scale using social media ads (Facebook and LinkedIn are great examples here).

Third, this also assumes that you have your messaging and your online profiles dialed in so that you’re attractive to your prospects, and that your online presence represents you and your business in a way that makes you look like THE best choice on the market.

This includes building authority and trust in your market so that your prospects trust you. In a way, this “replaces” the trust people experience when they’re referred to you. This authority and trust you create yourself by posting consistent, relevant, and valuable content shows them that 

1. you know what you’re doing (you are indeed the expert), 
2. that you know enough to help them solve their problem (you can deliver the results they want), and...
3. that enough people follow you and or respond to your content (“social proof” acts as the word of mouth here).

This can sound like a lot at once. Where’s the best place to start? Well, it really depends on what you want to do. Here are some suggestions…

Your Turn

Want to learn and set up a lead generation system yourself? 

I’ll show you how my team implements the same system we use for our clients to help them get consistent and quality sales appointments on the calendar in our most popular webinar…

The New System to Automate Your Outbound Lead Generation & Prospecting with LinkedIn

How to grow your network and gain new clients on autopilot without using black hat LinkedIn bots or software

>>Click here to save your spot now. 

Want someone to do the work for you? 

Want to explore your options to get help setting up an outbound lead generation and sales development system? If you need a steady stream of qualified leads booking appointments with you and if you’d like to learn how we keep our client’s pipelines full - and how it might work for you, too, schedule a time to speak with my Director of Client Strategy here to discuss your options.

Want to contribute? 

What’s your experience with referrals? Have you experienced the “feast and famine cycle” that comes from relying on referrals alone? What ways have you overcome it?

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