How can I stretch my marketing and sales activities and budget?
In most cases, referrals are more powerful routes to to clients than prospecting. A referral carries with it an implicit endorsement from the referrer and gives you an advantage over someone who reaches out to a client without a referral. Given, that, your best strategy is to focus on the mechanisms to cultivate and maintain referral sources. There are a few ways to do this.
First, understand who is likely to be a referral source. Small businesses are busy and may not have time to help you out. New businesses to a market won’t have built their referral networks. Conversely, trade associations or chambers of commerce have broad contact with their industry or profession. Vendors, if you are not competing with them, can be great referral sources.
Second, understand what you need to do to get referrals. We sometimes assume that a referral source is eager to help us based just on our reputation. Although this might be true in some cases, you are better off making sure there is something in a referral to both the referrer and the target. Making a referal requires trust that you are both good and ethical over the long run. This means cultivating referral sources with repeated and consistent good service. Do good work and make sure you let your referral sources know about it.Tip:
Set as a target to get 50-75% of your new clients from referrals. Start with a list of your target clients and work backward to find types of and specific referral sources. Make this a formal, written plan to identify those referral sources for whom you have already or can demonstrate that making a referral will not put them at risk. Finally, develop the tactics that will assure that the referrer benefits from making that referral.© 2009 Institute of Management Consultants USA