Tweet

Small Business Marketing: The Truth About Building a Referral Based Business

Written by: Larry Ferguson

Article Overview: We've all heard that referrals are the lifeblood of any small business, but here's another look. If you're depending on referrals to grow your client list, you could be waiting a long time. Learn how to develop a sales cycle that keeps new business coming in from many different sources.

Small Business Marketing: The Truth About Building a Referral Based Business

During the first five years of my business, I lived and died for referrals. I would do anything to get a referral because everybody was telling me that was the best way to get business. I read about this multiple marketing books and heard about it from several highly-successful speakers. It was sold to me as the golden gift of marketing. I thought "Gee, it doesn't cost anything. It's easy. It doesn't require arm-twisting. It's the way for a business to survive."

Then about a year ago, I heard an interview with a former Microsoft executive that really changed my mind about referrals. In essence, he stated that referrals are one of the worst forms of marketing because you cannot predict your business. You never know when you're going to get a call, how much income you're going to have, how long of an engagement or how good of an engagement it will be.

After reflecting on this marketing twist, I realized that referrals are really not the golden answer. They are one form of marketing and sales, but not the only one.

If you rely solely on referrals in marketing and sales, you're waiting for the phone to ring. You're waiting for somebody to knock on the door. You're waiting for somebody to walk into your office. Unless you have written a top 10 bestseller business book, it's not going to happen - especially if you're brand-new and just starting out.

Referrals are great, but don't rely on them.

Have other forms of marketing available to generate business. Increase your visibility, build your brand, and demonstrate your expertise. These are critical.

Marketing is not just a one-time event. It's an ongoing sales process that can help you bring in a constant stream of business.

Here's a simple easy to understand 5-step process that will greatly help you decide how best to approach my target audience:

1. Prospects Know You:
   
   People get to know you through visibility. Build your visibility by speaking, blogs, articles, etc.
   
   
2. Prospects Like You:
   
   Put out quality information that appeals to the wants and needs of your target audience.
   
   
3. Prospects Trust You:
   
   Put out great information and provides value to your audience. When people begin to see the benefits of working with you or reading your materials, they trust you.
   
   
4. Prospects Buy You:
   
   Bring them to the point where they want anything that you offer because they know it's the gold standard; the information is good and that it's going to benefit them.
   
   
5. Clients Retain You:
   
   Your clients and customers continue with your services and come back because they know the quality and results are there.

Build visibility so that your business is not 100% reliant on referrals by having multiple forms of marketing - speaking, writing, joining professional associations, blogging, organizing a Facebook group, etc. Instead of relying totally on referrals, think of them as a gift or bonus for your marketing efforts.

Related Articles
  Business Marketing No More Cold Calling
  Karma Keys to a Referral-Based Business
  Referral Truth or Delusion
  Top 7 Mistakes Made By Small Business Owners When Joining a Business Networking Referral Group
  How to Create an Abundant Flow of Perfect Customers

Article Tags: bestseller, business book, first five years, marketing books, microsoft, microsoft executive, prospects, referral, referrals, speakers, target audience, time event, visibility



Related Forum Posts
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
New Study - Women prepare better business plans - I found an article in Business Week and I found this quite interesting. [quote:ka7lg35i]Who Prepares Better Business Plans, Men or Women? A new study based on four years of data from men and women in a training program for microenterprises finds that they come out the same in quality scores. "However, women scored significantly better on the presentation of their plan to judges," conclude the study's authors, Ronald G. Cook, Paul Belliveau, and Christine Lentz of Rider University, in a paper presented at a recent meeting of the Small Business Institute. [/quote:ka7lg35i] What do you guys think?
The Little Man Introduction - Good Morning, This is John Hoover from Little Man Consulting. Our company has been floating along as a after thought for a few years. This year we decided to make a go of it. So far we are doing great. We are Virtual Administrators, Web Developers, Database Designers, and Software instructors. Basically, if you have someone in your office to do it, we can do it virtually. Our company was created to "Provide Big Business Resources to the Small Business". Wish me luck, I plan on revolutionizing the small business world with this!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Work Life Balance: Adding White Space

Clues to Increase Sales -- Listen to the Buyer

Are You Listening?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.