In a recent informal survey we found that, at most, 1 in 10 professionals have a planned approach to winning referrals.
Yet referrals are, by most measures, the best marketing a professional firm can do. Put another way, the marketing that works best is the one most firms aren’t using on purpose.
There are a few contradictions here:
- Many professionals know that most of their new clients come through a referral, usually from an existing client.
- They know how valuable that is, because a referred client costs far less to win than one found through advertising.
- For most firms it still isn’t enough: growing the business needs more new clients than referrals bring.
- So the firm’s marketing turns to paid ads, seminars, webinars, email campaigns, bought-in leads and search advertising.
- Often without asking whether the referrals that already work could be grown instead.
That’s odd from a marketing point of view. It assumes that referrals just happen and can’t be worked at, and it skips the question of what actually works.
Referrals aren’t only cheaper to win than other kinds of client. They also tend to be worth more. Ignoring them in favour of methods that work less well, or not at all, means missing an opportunity.
What a referral strategy means
Referral marketing means having a deliberate plan for winning referrals from more than one source.
Existing clients will keep referring on their own. Beyond them there are other sources, and the obvious one is other professionals.
A solicitor, say, offers services that don’t compete with a financial adviser’s. Draw the two as overlapping circles and the overlap is usually small. The parts that don’t overlap are large, and that’s where the referral potential is: each firm’s clients regularly need what the other does.
The work is to recognise that, build a practical way of acting on it, and make it part of the firm’s marketing plan.
Measure it
Give it a fixed period, such as 12 months, and count the referrals that come from the new sources. That shows whether the effort is paying off, and where to put more of it.
We’d like to see that 1 in 10 figure change, so that every professional firm has a planned approach to referrals from more than one direction.
How a referral works on PCN, step by step.