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Do Referrals Happen by Coincidence?

Written by: Ivan R. Misner

Article Overview: No, they don't. Here's how to stop relying on luck to create word-of-mouth for your business.

Do Referrals Happen by Coincidence?

A few years ago, a friend and colleague of mine, Art Radtke, told me about a member of one of his networking groups who was about to leave the organization. The member's name was Mike. He owned his own business and was considered a good member of his group. Most people were surprised when he dropped out of the group only a year after helping to form it. Mike was receiving referrals and things seemed to be paying off with some high-quality sales.

Despite appearances, Mike had a totally different perspective on the situation. In talking to Mike, he explained that the members liked each other a great deal, and he truly felt that they helped each other whenever possible, but, inexplicably, he felt that it just wasn't working for him. Mike explained that his business was doing well, and he went on to describe some of the new clients he acquired. Oddly enough, many of the clients and referrals he described sounded very familiar. As it turned out, many of these people and companies that he discussed as the basis for his burgeoning business were the very same people that had been referred to him by the chapter members throughout the previous year!

One of us called Mike to end the confusion over why he was leaving. As it turned out, the call only created more confusion. The conversation took an hour and, in the end, we agreed with all the facts but had dramatically different interpretations. Mike believed that:

1. He had been introduced to these new clients by members of his group, or by people introduced to him by members of his group, mostly by chance.
2. He didn't feel that the results were any indication that a system was at work. He stated quite clearly that these referrals were basically coincidences. It was by chance that so-and-so bumped in to someone that just happened to need his services.

Mike was looking at his success from a position of repeatability. His professional training taught him that he and his employees should call people from a list that was generated based on the demographics he was looking for in a client. If he didn't have enough business, he needed to call more people. The results of his activity were always measurable and could always be accounted for by the actions he took. Most importantly, there was a well-defined ratio that he fully understood relating to the number of calls, appointments and closed sales.

The clients he picked up from referrals, on the other hand, always had a story attached to them that couldn't be repeated, leading him to believe that the results were coincidental.
This misconception happens when someone focuses on the referral rather than on the relationship that produced the referral. This interpretation led Mike to the inaccurate conclusion that the results were coincidental.

It's no more coincidental that people receive regular and consistent referrals from the people in their network than it is that a fisherman who casts a net catches fish. The fisherman concentrates on his action of casting the net, not on the individual path of one of the fishes that swam into it. If he did base his decision on that one random fish, he would quickly come to the same conclusion Mike did: That it was coincidental.

The reason Mike focused on the referral and not the relationship is because he didn't understand that building effective and profitable relationships is a system. In fact, he had never been trained on how to systematically build mutually profitable relationships. In his early training, he was taught about products, customer service and cold calling. When he did receive referrals, he had no idea what specific actions he had taken that had caused it-so he was simply thankful for his good luck and went back to what he knew.

When it comes to networking, "luck" is where persistence meets opportunity. There is no coincidence about repeat referrals. It comes from the day-to-day activities of building relationships. Although it can't be measured as easily as tracking cold-call ratios, the results are dramatic and almost never coincidental. Repeat referrals happen because you've laid the groundwork through professional relationships.

Art Radtke contributed to this article.
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Dr. Ivan Misner is the Founder and Chairman of BNI, the world's largest business networking organization, which has more than 4,600 chapters in 37 countries. Dr. Misner is also the author of several books, including the New York Times bestseller TRUTH OR DELUSION? (www.truthordelusion.com), and he is the Senior Partner for the Referral Institute (www.referralinstitute.com), a referral training company with operations around the world.

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Related Forum Posts
Re: How do you get your clients? - I think staying away from gathering clients strictly online when first starting out is probably a good idea. Your first few clients could maybe be people you know, or know through somebody that may require some of your services. Another good way of gaining new clientel is offering your first few clients completely free service in exchange for placing your business card or promotional material in their business if you're doing b2b sales. Referrals are the lifeblood of many small businesses.
Re: How do you get your clients? - [quote="brata":2qa58hl5]I think staying away from gathering clients strictly online when first starting out is probably a good idea. Your first few clients could maybe be people you know, or know through somebody that may require some of your services. Another good way of gaining new clientel is offering your first few clients completely free service in exchange for placing your business card or promotional material in their business if you're doing b2b sales. Referrals are the lifeblood of many small businesses.[/quote:2qa58hl5] Ive been in business for a few years and my best way to get clients is door to door so far. However as my marketing budget grows I have stopped door to door business to business sales and shifted to mailers, billboards, radio, and just a tiny bit online.


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