Now that we have our sensational headline out of the way, let’s discuss what we mean. We loved getting referrals to our grounds maintenance business. Referrals were solid, often pre-sold on our services, and best of all cost us little to nothing. We felt we did not need to put much effort into additional marketing.
Sounds great, right? Wrong. We relied too much on referrals, we had growth but it was nowhere near the level it could have been. Referrals offered just enough success to give a false feeling of sustained growth.
Our mistake was on at least two assumptions. First, referrals felt like the best way to grow—they stoked our ego and they were easy sells. Second, we left our referral to chance—we did great work and earned those referrals, but the system was passive.
Opportunities for growth beyond referral marketing
Referrals make a great way to add clients to your company, but only as one option among many. There are easily a number of other opportunities to gain clients, many of which are more predictable and steady than waiting for referrals. Any company relying on one funnel to bring in new clients is leaving too much low hanging fruit untouched.
The strategy for finding clients should include a look at three areas of the client life cycle including new opportunities,
Current clients are ones that have recently engaged your services. These provide so many opportunities to find new clients, here lies the path to the referral. We will discuss more in a minute.
Past clients are often overlooked and neglected, yet in many ways, they offer the most potential for business if properly nurtured and they have had a good experience in the past with us. Service providers know the lifecycle of their products and services, who better than those who serviced the furnace last as to when it will need to be
Referral marketing needs a system
If you think referrals are good now, just wait till you implement a system for getting them. We won’t go into details here, that is an article all on its own.
Some basics. Referrals need an action plan for gathering them. They often require an ask. Approximately, 75% of satisfied clients are willing to give a referral, but only 25% do on their own. Great times to ask for referrals include: at the time of service when the customer is smiling, when you have just received a positive review, and when they have just given you a referral.
The referral partner system (again something to be covered more fully in its own article) is an extremely powerful opportunity in helping your business grow. The simple version is to find another service provider that offers a different service to the same group of people as you do. Create a network of these partners—plumber, electrician, lawn care, etc.
Conclusion
We have made a slight case against relying on referrals for growth. We are not suggesting referrals are bad, let us be clear. Referrals are an amazing source for business. Referrals need to be understood as a piece of a larger marketing strategy for growth. Dependance upon referrals as the major source of growth is more a reflection on the lack of using other sources than an accurate testimony of the power of referrals.