no-referrals-needed


Today we are going to talk about marketing for consultants and I am going to bust a myth that is commonly shared among consultants. The myth is: referrals are the lifeblood of a consultant’s business. The philosophy continues by explaining if you are in the world of consulting and you want to build a consulting business, then you need to have a plethora of referrals. Today I am attacking that myth because it is not true and it steers a lot of consultants down the wrong path. Let me explain.

Referrals are great. First, the common understanding is that world of mouth is the best marketing and that is generally true because it’s free. When people discuss your business in your absence, that’s free promotion. That is a good deal. Second, it is often said that referrals create the best leads and that’s also true. When people have been referred, typically they are already sold on doing business with you and you don’t have to do any heavy selling. Third, common knowledge is referrals cut through the client’s red tape. For example, if you are selling to an organization with two, three, or four decision makers being referred limits the amount of engagement you need to have with each and every person. There is already a sense of comfort with you and you can begin the your good work faster. All of those things I agree with, but there are a number of things not typically mentioned about referrals.

Referrals are flawed. You have to ask for referrals. Referral clients do not magically appear and past clients don’t walk up to strangers and say “Hey, you should do business with John Brown.” You must ask your existing client base to refer you. There has to be a process, a procedure or a method through which you consistently ask for referrals. Next, when someone gives you names of referrals there has to be a very structured way you respond and follow-up. This is a system and this system needs to be built and refined. Additionally, you need a group of existing clients if referrals are going to work for you. Who is going to refer you? Only those who have experienced your services already. So if you don’t have an existing base of clients, you don’t have anybody that can refer you. Finally, you can’t control referrals. It is hard to consistently put your business on a growth path because you don’t know when your next set of referrals are coming. If you don’t know where your next influx of business is coming from it is difficult to plan, hire, and budget like a mature business.

Coveted Consultants know they must advertise. Advertising allows you to measure return on investment. If you spend $1,000 for an advertisement you can measure how many clients you earned as a result of that advertisement. Maybe for every $10,000 you spend you get three clients as a result. Maybe for every $2,750 you spend you get eight clients as a result. Whatever the return is, you can measure it. You don’t need an existing client base, so you are not stuck if you don’t have clients to refer you. In fact, you can advertise without any existing clients at all. Most importantly, advertising increases the level of control and predictability in your business. As you refine your process, you learn that if you spend a certain amount of money, you will receive a certain number of clients.

Coveted Consultants know that marketing strategy involves a mix of activities. There are a number of things your business will deploy at the same time. You will mix referrals, advertising, launch campaigns, phone selling, etc in order to develop an intelligent marketing mix. That is my challenge to you today. Don’t just focus on referrals, but on your entire marketing mix, including advertising.

What is your marketing strategy?  Post below.

1 Comment

  1. […] scalable solution. I had already tried “networking”, “blogging”, and “asking for referrals“, but those don’t generate clients at a predictable clip. I needed a certain number […]

Leave a Comment