Most everyone is at least thinking about their 2018 business plan. What will be the key marketing activities you will rely on to make 2018 a more profitable year? As you list these activities is there a creeping sense of déjà vu? You’ve dutifully made marketing plans in the past, but the business gets in the way of focused, committed follow through. Trust me, you are not alone.
Referral Marketing Should Be Your #1 Marketing Commitment in 2018
The key is to prioritize those activities and decide, come what may, which activity will be the priority. If only one thing gets done it will be…what? I recommend that the one thing is a commitment to developing referral relationships. What I mean by referral relationships is a proactive plan to identify, communicate with, and seek to uncover business opportunities with people who can provide you with referral business.
We all love referrals.
When a prospect is referred to us, we enjoy a sort of trust transference. The prospect has a solid, satisfied relationship with the person referring us. Their thinking is along the lines of “Bob has taken good care of us, so if Bob thinks these guys will do a good job helping us with ERP software (or whatever your product and service offering is), we’ve probably found a good service provider.”
The referred prospect is already predisposed to us: confident that we can do the job.
Like us, like everyone, the prospect’s time is valuable. There aren’t enough hours in a day. There is more to do than time to do it in. As a result, being referred can mean a fast-forward past the buyer stages of Know, Like and Trust, straight to the “Try, Buy” stages. This means a shorter sales cycle. And very likely, it means a lower cost of sales.
When we are referred, the competition doesn’t have the benefit of the trust transference. (If there is any competition.)
I am always amazed at how often being referred results in the prospect bypassing the evaluation of other service providers. I believe this occurs because of the time + trust transference effect. The person making the referral is trusted enough to substitute for due diligence and the prospect can use the time he would have spent evaluating other services providers on more business-critical activities.
You’ve probably experienced what I’ve described. Usually when I asked business owners where their closed business comes from, the answer is referrals. There may be a few deals that come from a webcast or an event they attended. There may also be the occasional deal that comes from direct mail or email marketing. But the lion’s share of closed business seems to come from referrals.
So why don’t we spend more time developing referral partners in order to increase the number of referrals we get?
Let me suggest that 2018 is the year you get serious about referral marketing. Here is a very simple 4-step plan that anyone can put in place.
- Identify who can refer the type of prospects that need your products and services.
- Pick 5 and list them in the first column of a spreadsheet. Across the top, list out the months of the year.
- Each month, communicate with the referral partner. The point is to stay top of mind, so that when they are talking to a prospect or customer and the prospect/customer communicates a need for your products and services – you’ll be top of mind.
- Look for opportunities to refer business to these 5 contacts. Nothing keeps you top of mind as effectively as helping your referral partner close business.
It’s really quite simple. But it may not be easy.
I work with business owners to implement plans like the one above. Getting started is the hardest part. Maintaining the momentum of regular communication is crucial. “I just didn’t have time this month” is the number one cause of failure. However, when business owners make the time – decide that this is the one thing they will make sure happens – the results are energizing. There are more qualified opportunities (adds to the pipeline). There is more revenue coming into the business. Typically, referral customers are happier customers – so you have more reference sources and case study candidates.
Consider this: if you could double the number of referrals received, what would it mean for your business? If you could triple the number of referrals received, how much more would it mean for your business?
A little regular attention to your referral partners can go a long way. In fact, a 2X or 3X increase is a conservative forecast were you to commit to working your referral partners. This is why, if there is only one activity that can get your full commitment, make your commitment to referrals.