In a recent casual survey we found that – at best – 1 in 10 professionals have a dedicated, tactical or strategic approach to referral marketing.
This is contrasted with the simple fact that successfully generating referrals is the best marketing professionals can do, when measured against just about any metric.
Put another way, the most effective marketing option available is not being used.
There are multiple conflicting and confusing aspects to this:
- Many professionals recognise that the most common way new clients come to them is through a referral (normally from an existing client)
- Likewise, they recognise the incredible value this produces (as the acquisition cost of the new client is zero)
- Conversely, for most professionals this is not enough, their business growth requires a greater number of new clients
- Tactical approaches such as paid for ads, seminars, webinars, email marketing, third-party lead generation and Google Search are often employed within the firm’s “marketing”
- Often without any comparison made to boosting the already successful organic referral activity that is taking place
This is curious, from the marketing viewpoint, because it assumes that (a) referrals are somehow naturally occurring and could not be made into a more tactical approach and (b) ignores the question of effectiveness.
To ignore boosting what works to ever higher levels, in favour of many things that do not work as well, or at all in some cases, makes no sense.
The thing about referrals is that they are not just cheaper to acquire than other methods, but they tend to be higher value.
This leads to a conclusion, professionals are missing an opportunity; and often the opportunity cost can be measured in hundreds of thousands of pounds.
Referral marketing basically means having a purposeful approach or strategy to generating referrals from all sorts of sources.
Existing clients are left to their own devices, so that they naturally provide the base, but beyond this there are multiple other potential sources, with the obvious one being fellow professionals.
Professional A in one sector (e.g. legal ) has a service proposition which is not competing with Professional B in another sector (e.g. financial).
There can be some crossover (so a Venn Diagram, middle element) but its commonly very small – in the areas, much bigger in size, where there is no crossover, it is clear that the most incredible potential exists.
All a professional needs to do is recognise this potential, which is so vast and then construct a workable way to approach this.
That is then brought into the marketing strategy and the firm can pursue this quickly and easily.
Once the commitment is made, the work can start.
In the course of 12 months, say, this can then be measured, based on how many referrals are generated from the new sources or new effort.
Done well, and with skill, this can easily translate into many new clients per month.
We have examples where firms have gone from scratch, apart from their organic referrals, to ten per month in under a year.
There are so many benefits to this marketing approach, some are subtle, some more obvious, with an overall impact that is so clearly better than the alternatives that are commonly tried.
We hope to get that 1 in 10 number changed and that every professional should have a multi-faceted and dedicated approach to referrals, the prize is enormous, the cost/risk negligible in comparison.