Why It Takes More Than Referrals To Grow Your Business

Why It Takes More Than Referrals To Grow Your Business

Why It Takes More Than Referrals To Grow Your Business

Whenever I speak about marketing to small business owners, there are always several people who come up to me afterwards to say they found my session useful …and then comes the “but”….”but I get the bulk of my customers from word of mouth referrals or networking in my community.”

There is no denying the importance of referrals and networking to keep your business alive. Both are golden when it comes to gaining new clients.

But if you rely totally on them for your future growth, you will not get to your goals. You will be imposing limitations on your efforts and will see your market share stay small, no matter how hard you work and how great your service is.

There are three good reasons why both referrals and networking have limitations as methods of procuring clients. You need to expand your options if you want to see your business grow.

Reason 1: Your reach for new clients will be limited to your current ones

My current clients have been amazing ambassadors to help me secure new customers and to help my business grow, and I am grateful for their efforts. However, I cannot rely solely on them as I work to expand.

That is because they have a limited reach. Very few of them have a national reach, let alone international, yet that is the wide reach I want my net to cover to secure new clients.

Your current clients, like mine, tend to refer your services to people they know, and the bulk of those people are within the community where they live.

This might have been fine before we all took to the Internet and pulled down the geographic barriers to doing business.

Today, with Cloud accounting, with video conferencing and instant texting, we are no longer limited to doing business in just one community or geographic region.

When constrained by geography, ultimately you will run out of the kinds of clients who need bookkeeping or accounting services, for example. Not everyone in your community has a business or a need for services, and among those who do, there is a finite number.

As a result, even if every current client you have refers people they know to you, they will ultimately run out of referrals.

Simultaneously, if that region is hit by some kind of sudden downfall, such as a major business closing or a natural disaster, your business will be severely impacted if you do not have a client base outside of it.

So selecting areas for expansion and adopting marketing plans to reach them just makes good business sense.

Reason 2: You only get the people other people send you

As wonderful as referrals are, you tend to get referred to people who run similar businesses or have circumstances like your current clients.

But what if you have identified another opportunity and want to reach out to add that dimension or niche to your business? How do you get to secure a market segment that your current clients don’t fit in?

You have to move to another means of recruiting these new clients.

There’s another issue with letting your clients be your sole attractors of new clients for you. This passive approach will not serve you well if they are not as aggressive about getting your name out there as you might be yourself.

I like to explain it this way. If you opened a corner store, would you be willing to contact the person next door and ask them if they would encourage everyone they know to come and buy things there? Could you really expect that this person would mention your name often enough and convincingly enough to persuade the clientele you need to survive to come through your door?

Of course not. Nor should you expect your clients to do all your recruiting of new customers for you. They may use your name when it suits them to help a friend find a service, but they are hardly going to talk about you enough to keep you top of mind in your field.

Reason 3: Your clients can only talk about what you do for them

Your bookkeeping business likely offers a considerable number of services. In addition to just keeping the books, you may handle payroll for some clients, you may prepare GST returns and federal tax returns, and even offer specialized services like budgeting, research and specialized financial reports.

The client you hope will bring your referrals may simply require monthly bookkeeping services. So that is what he or she will talk about if they do refer you. The business person looking for payroll assistance or weekly financial reports may not even be aware that you offer such services.

This begs the question: can you really expect your clients to sell your services?

Of course not, and if you wanted them too, they are still not be trained sales people who are familiar with all your offerings and adept at persuading others that you are the right fit for them.

They do not have your marketing materials, your research, or in-depth knowledge of your field.

Why networking alone isn’t the answer either

The three reasons why you cannot rest the growth of your business solely on the shoulders of your current client referrals are the same three reasons why you can’t rely on networking events to bring in a flood of new clients.

It is good to be seen at such events within your community, but normally these venues also have limited geographic reach, there is no option to discuss every single service you offer, and those who even remember that they meant you there are not professional sales people who will guide people to your door.

However, I think the biggest challenge with networking is it relies totally on you and your time. You cannot leverage anything. If you are not personally doing the networking then the networking is not being done and not providing you with any new leads.

What replaces referrals and networking?

There are many alternatives to networking and referrals. Online advertising, social media, hosting your own events, webinars, podcasts are all ways you can reach out to grow your business.

But, before you get started with any type of marketing make sure you have a plan – a sound strategy. Nothing will grow your business faster than having a sound strategy and making the effort to determine the kind of client you want and then continually reach out to secure their interest. There is no short cut to success and growth.

Thank you for reading. Until next time, take care.

This blog is for you and we hope you will enjoy the content.

Please let us know if there are any specific topics you would like us to address in the future.

Copyright: marigranula / 123RF Stock Photo

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