The reality of referrals in business today

I have been sharing my insights into the concept of ‘referrals for better business’ for several years now, and I thought it was about time I shared them with you too.

I thought I would do this by way of sharing a conversation I had again recently. I say ‘again’ simply because I find myself having this, or a similar conversation at little too regularly.

I have taken the fluff out and just given you the juicy bits, and I would like you to think, “If this were me, where would I sit in this conversation (what level would I be)?”

The conversation goes like this:

Me - How do you feel about referrals in business?

Other – Yes, well, obviously they’re good. I actually get quite a lot of referrals.

Me – That’s great, may I ask who refers you?

Other – Mostly my customers and sometimes a few from networking events I attend.

I call this LEVEL 1 simply because that is where most people are if they have been in business for a year or more. They are building a network, have some customers and are becoming known for what they do. The conversation continues…

Me – How often do people refer you?

Other – Not sure really. They just refer when they can, I suppose.

Me – How does that make you feel?

Other – Great, obviously. It feels really good when someone refers me out of the blue.

NOTE: I should point out that Other and I had agreed that we would be honest and open with each other.

Me – Would you agree then that for the majority of the time, some of your customers refer you sometimes?

Other – Yes, I would agree with that.

Me – How would you feel if your customers referred you most of the time?

Other – Yes, obviously that would be better, but it’s not going to happen in reality is it?

Me – May I ask how much time and money you are currently spending looking for and getting new business?

Other – Quite a lot probably. I don’t really know, to be honest.

Me – What if you include the time you spend networking and on social media, would that be even more time?

Other – Yes, it would.

Me – What if I showed you how you could have a strategy and plan in place so that most of your customers are referring you most of the time. How important would it be for you to know how to do that?

Other – Sounds good in principle. I’m interested to know - not sure if I’ve got the time or money to do that though. I’m pretty busy at the moment.

Me – You have already said that what you are currently doing to gain new business costs you a lot. My question would be what is it costing you not to have a plan to get most of your customers referring you most of the time? What are you giving up at the expense of being busy?

Other – A fair point, I suppose…

NOTE: At this point, the conversation goes into what that plan looks like, but as I said, I have taken out the fluff to give you just the important bits so you can see what the reality is for referrals in business today.

Now, with a plan and strategy in place for communication, networking and conversation we are at LEVEL 2, and most of our customers are referring us most of the time.?

The conversation continues…

Me – Earlier you mentioned that you also get some referrals from your network. When did that last happen?

Other – Actually it was just last week. Someone from my networking group called me and introduced me to someone who needed their xxx fixing.

Me – Has that turned into business yet?

Other – Not yet. Sometimes it takes a while because of (what I do).

Me – Of course, I appreciate that. When was the last time you remember a referral from your network turning into business?

Other – Probably a few weeks ago. Not sure really, just thinking. Why do you ask?

Me – I am interested to know a couple of things really - firstly, how often these referrals turn into business for you and secondly, how much less time you invest in converting because it is a referral.

Other – Well, mostly they turn into business…

Me – Just to be clear, do you mean most of the time or some of the time?

Other – I would say most of the time.

Me – Great. How much less time does it take you to convert those referrals?

Other – Obviously it takes less time. Usually there’s still some work to do, but on the whole, I think it’s working well.

Me – What if I showed you not only how to get most of your customers referring you most of the time but also get your network referring you most of the time? Do you think you could cope with that increase in business?

Other – Good question. If I’m honest, you make a good point, and if I was getting more referrals from customers and my network, plus the usual enquiries… mmm, good question.

Now, with a strategy and plan, which also includes more referrals from most of our network, we are moving from LEVEL 3 to LEVEL 4. Again, at this point, the conversation goes into what that plan might look like. For now, the conversation continues…

Me – We have already talked about how much time and money you spend gaining new customers and how you can change that, may I ask what your thoughts are regarding growing your business? Earlier you said you are pretty busy at the moment.

Other – Yes, pretty busy. Could always do with more though, right?

Me – Of course. So, would a few more customers mean that your diary remains full?

Other – Yes, I suppose so.

Me – If your diary is mostly full all of the time, how will you grow your business if you cannot fit more in?

Other – (smiles) You’ve got some good questions, haven’t you! OK, honestly? I don’t know. I suppose I would have to start thinking about employing someone.

Me – So you are going to employ someone just to make them as busy as you are?

Other – Oh, yes, I suppose so. What else is there? That’s it, isn’t it?

Me – I believe there is another option, and this is why: most businesses grow by expansion as described – get busy, expand, get busy, expand etc. The problem with that is that whilst that is a perfectly viable way to expand a business, and you will increase your turnover, you are also typically increasing your costs. I believe this is a finite business growth strategy because time is finite. What we are not addressing is the core responsibility of every business, profit. By focussing on profit, we have a way to grow infinitely because the potential for profit is infinite. What would it mean to you if you were focussing on profit in your business not just gaining clients and being busy?

Other – I hadn’t really thought of it that way. I guess I really am focussing on more business.

Me – We have already talked about a plan for more referrals, both from your customers and your network. How about we now think about better referrals? Would you agree that if you were to get better quality referrals, referrals for higher revenue business and more enjoyable business, could you be in a position to make more money in less time?

Other – When you put it like that, yes. That makes an awful lot of sense, really helpful…

Now, with a strategy and plan in place which also includes referrals for better, not just more business, we are focussing on building a more profitable business, a better, stronger and smarter business, we are at LEVEL 5.

I believe we have a responsibility to do the best we can for ourselves and our businesses and focus on growth. Whether that be for profit or quality, or both. Growth doesn’t have to mean bigger but it does always mean better.

As mentioned, I would really like to know which level you think you are at. Here are the levels again. Once you’ve decided you want to level up, give me a call and I will show you how.

LEVEL 1 – Most people are in this position because referrals happen by accident. Some of their customers refer them some of the time. They think it is going well, but they are unaware of what they are leaving on the table.

LEVEL 2 – They have a strategy and plan in place so that most of their customers are referring them most of the time.

LEVEL 3 – The start point for many who attend networking events and who have or are building a network. Some of their network refer them some of the time.

LEVEL 4 - They have a strategy and plan in place so that most of their network are referring them most of the time.

LEVEL 5 – Better, not just more. Your network is referring you regularly for what you want, not what you are already getting, i.e. the business you want next which supports the potential for infinite growth in profit.

Drop me an email here: [email protected]?

Or book a call directly here: https://calendly.com/markjarvis/discoverycall

#referrals #betterbusiness #betterreferrals