Entries from February 2009 ↓

A personal story… I thought it was about time I gave you one.

Business networking is something a lot of people love to hate: It is time-consuming, expensive, and in most cases very inefficient.

I can bear the “time-consuming”…

I can even live with the “expensive”…

If – and it’s a big “if” – it produces results!

…

Which it typically doesn’t.

Most people who attend networking meetings are only interested in themselves. They don’t care about your product or service; they just want to pitch you theirs.

Now, for the record, I am not opposed to networking: I am a member of the Rotary Club, I am a Toastmaster, I visit various Chambers of Commerce and Boards of Trade. I have and still do belong to several business networking groups. I also go to a number of industry shows and events.

So I am not anti-networking.

What I am is… anti-networking-with-no-results-to-show-for-it.

Here’s how I went from networking with no results to networking that produces a constant, predictable and measurable inflow of prospects for my business.

I attended a breakfast meeting at the local Board of Trade. They had the usual: 30-second presentations by all businesses in attendance, the cookies and the coffee, followed by “natural” networking.

I met 13 new people at that meeting. I came back to my office with 13 new business cards in hand. Once I entered all these contacts into my list, I sent them a simple greeting card that said this:

Dear [name of the person],

If was nice meeting you at the networking breakfast earlier today.

I really enjoyed our conversation about [topic we have discussed]

I’d like to learn more about your business so as I could know who is a good referral for you. Please call me at (000) 000-0000 when you receive this card. 

Thank you & I look forward to speaking with you.

One week later, 6 people called me to thank for the card I sent them.

Let me tell you something important about my business: It DOES matter who calls whom first. In this case, they called me, something that has never happened before! 6 people out of 13… that’s 46%! Not too shabby in my books. With such a response rate, this is serious business.

And as of the time of writing this, out of these 6 people, 2 became clients and one has referred a number of other businesses to me. 2 out 6 is 33%! Any way you slice it, it’s a fantastic ratio.

Since this is the month of LUV, let’s talk about why we love getting referrals.

Getting a referral is like receiving a stamp of approval for all the hard work you’ve done. It sure does feel good!

However, aside from the warm and fuzzy of this experience, let’s take a look at the 7 most important reasons why you should be build your business using referral marketing:

1. Referrals Are Cost-Effective

In most cases, referral are much more cost-effective than any other form of marketing. They cost very little if anything at all! In the world of skyrocketing advertising costs and slugging economy, this is a very nice thing to have.

2. Referrals Are Better Clients

New clients that you have acquired by the way of referrals tend to be much better clients. They are less demanding, more appreciative of your work, and they are tend to be nicer people to be around. By focusing on referral marketing, you can “engineer” the type of people you want to attract to your business.

3. Referrals Are Predisposed To Buy

If someone was referred to you, chances are they have already been looking for your product or service. They are in the market. They need and want your product or service, right now.

4. Referrals Are Less Skeptical

When someone refers business to you, they provide an endorsement (either explicit or implicit) of you as a professional. This is the critical element of social proof that makes the selling process so much easier. When you focus on building your business via referrals, you don’t have to overcome as many objections and your closing ratio goes up.

5. Referrals Pay More

The people that have been referred to you by someone are not as price-sensitive as the other types of prospects. The price someone is willing to pay is in direct proportion to the amount of risk they see in the deal.

6. Referrals Are More Loyal

Clients that have been referred to you will tend to keep buying your product, or doing business with you as a professional, for a longer time than the clients you acquire through advertising.

7. Referrals Are More Likely To Give Referrals

This is something that most business owners never think about yet is possibly the most important item on this list. When someone gets referred to you and becomes a client, he or she will think that giving you referral is “normal”. As a result, they will be a lot more likely to give you referrals than the rest of your clients would.