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What’s Really Behind All Those Referrals?

It just seems to be the thing to say,  when asked where our new business comes from — and makes the speaker so much more admirable, doesn’t it? But do referrals really just fall into our laps?

I would contend that, even if you have a strong referral base (and after a certain time in business, any well-run business can and should expect that), you still have to work to turn referral possibilities into tangible contracts. I mean, referrals and kind words may be good for the ego, but they don’t count ego in your bank account.

Identify the Sources of Your Business

First and foremost, to be proactive and build a strong referral base, you need to know the sources of your business referrals.

For instance, do the referrals come from a particular business group, association, trade contractor, customer or potential customer? Are they generated through your public relations and marketing program — from press announcements, articles or releases in your local newspaper, from advertising or your son’s or daughter’s ball team?

Determine Where to Focus Your Energy and Resources

Okay, now take it one step further. Analyze what kind of work comes from your different referral sources so you will know where to focus your energy.

If, for example, you receive a number of nice little $500 repair orders from your son’s ball team, but several $200,000 agreements are generated through your business networks, where do you think you should spend your marketing dollars? If your networking with the chamber of commerce gets you lots of repair jobs but your involvement in your local home builders association brings you additions, where should you concentrate your energy and time?

I’m not suggesting that any of these examples are factual. That’s for you to find out.

Market, Market, Market

But I think we often paint referrals with a very broad brush. What seems like a referral may actually have resulted from hard work and consistent involvement with a particular group. Over time, that effort built trust within that group and eventually led to successful closings on a number of projects.

Nobody just sits back and waits for them to walk through the door with a checkbook — or my favorite, a bag of cash. Credibility, knowledge, ethics, ingenuity and craft doesn’t just happen. There is, and always will be the expenditure of effort and resources to establish yourself.

That’s marketing — and nurturing sources to produce referrals plays a role in it. In other words, pouring your resources into a group or groups to elicit requests is not categorically “all my business is referral”— it’s really smart marketing.

So, call referrals what you want. It’s the results we’re after, and what we can count on when we market our businesses effectively. I’m off to wait for the telephone to ring.

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