Return to the Blog

The Great Lie About Referrals

Pinocchios referrals lies

[Image: the tale of Pinocchio - as he lied, his nose grew longer]

The moral of the fairy tale is that referrals are the mark of a good business.

Do good work, your clients will be happy, they will tell other people, and they too will become your clients. And you’ll all live happily ever after.

But there are plenty of finance professionals who do a good job. And for most, referrals are at best erratic. Haphazard, and a tenuous platform on which to build a business.

In fact, they are often a source of frustration.

Newcastle, my home town, is littered with joint venture referral agreements between businesses. That cost more money in legal fees than the revenue they generated. It’s much the same everywhere else.

» Good work doesn’t mean happy clients.

  • Many can’t evaluate whether your service is good or not.

I got a tax return; my accountant must be good. Would another accountant have you paying less tax during the year? Could you have got more?

I have a financial plan and am on track. But ….

  • It’s expected. I’m paying you to do a good job. So what.
  • And for other clients they are not even connected to the outcomes you create.

» Misery is shared, happiness is personal.

  • Do something wrong and clients tell the world.
  • Do something good and people are happy, for a fleeting moment. Even then it does not mean they will tell others.

The fallacy of net promoter scores

It’s why net promoter scores are a feel-good placebo. The latent good will identified at the end of a carefully worded and structured survey is self-fulfilling.

Of course, people are going to say yes.

It does not mean they will refer. People are self-absorbed, lost in their own world and dramas. Clients might mention your service if asked who they use. But the idea that they actively promote it is fantastical.

Most of your clients or professional colleagues are not active promoters of someone else’s business.

Referrals - the cocaine of the business world

Referrals are great. Their conferred trust bypasses much of the initial selling process. Their conversion rates can be upwards of 90%.

Dangerously though, they reinforce the ego of the recipient.

I must be good at my job…  and so the fairy tale loops again. No wonder they are so addictive.

Because we all want to believe that we are good at what we do. And the implied recognition of a referral is a huge dopamine hit.

Besides, it means less work in having to generate new business.

But success is not haphazard

There are businesses that do enjoy regular inflows of referrals. Dig deeper though and you’ll find someone investing a lot of time and energy into relationship building. Continuously, strategically, and over a long period of time. Because once the investment stops, memories fade.

Others have referrals built into their standard business practice. So that it becomes embedded into their processes, and those of their referrers. They become sustainable over a long period of time.

To find out how -

simply email Alex Meijnen on alex@deliveringresults.com.au and we’ll send you a “how to” that builds effective referral habits into your business.

Posted on 09 Jun 2021

Comments

Be the first to add a comment...

Post a comment

Invaluable to the growth of my business

After being in business for 3 years it felt like we hadn’t quite created an identity for the business and what we do for clients. We also had issues in communicating to potential referral sources how we can benefit them and their clients.

delivering Results took us back to the fundamentals of marketing and then created the communications for the business to help with the ‘sales’ process and reduce this cycle to almost half.

Since implementing these new sales tools we have also noticed a steep increase in referrals into the business from existing clients as well as new professional referral sources.

Alex and his team did not use a ‘one size fits all’ approach or a programme; using their experience and knowledge they created a tailored process and quality advice.

Overall, going through this process was invaluable to my professional development, the development of staff and the growth of my business and I would recommend that all owners go through this process with Alex and his team regardless of how long they have been in business.

Attracting the right type of clients and confident about the value of my service

Alex and the dR team have achieved something unique among marketing consultancies in my experience. They have been authentic.

They are not afraid to get involved. If you just want a marketing consultancy that simply tells you what you want to hear then dR is not for you.

Alex has helped transform the positioning of my brand and service to the market.

I am now attracting the right type of clients and am much more confident about the marketing and value of my service offering.

Genuine working relationships

When we engaged delivering Results to rebrand our Medical Imaging company the standard of work and investment in our business from the entire team was second to none.

I truly valued the time Alex took to understand our business and team. He helped translate this into an authentic brand that represents our vision and allows us to honour the promises we make to our staff and clients.

What I didn’t expect was the depth of knowledge Alex and his team would impart, the mentoring and support and the genuine working relationships that would follow.

With greater understanding of how we develop and nurture our referral partners we can grow our business in the way we envisioned.

JavaScript not installed

This website uses JavaScript to improve the user experience. The web browser you are use does not have JavaScript installed or is outdated. For the best browsing experience please open the website in a modern web browser with JavaScript installed, such as Google Chrome, Mozilla FireFox or Safari.