The Dark Side Of Referrals

  • Category: Selling

It’s not unusual for consultants and various experts to decide that they need to grow their referral base with the idea that it’s the holy grail of building a sustainable business.

But there’s a dark side to referrals, which is why Jonathan and I wanted to explore some pivotal ideas about their role in business development:

Why relying on referrals is a passive strategy with few controls—and a dangerous hidden cost.

The difference between referrals and word of mouth from your authority-building efforts.

The one exception where a referral system can be exactly the right approach (and it applies to a VERY small slice of experts).

Why investing in broader market moves (e.g. publishing and speaking) will bring you business faster and more reliably than courting referrals.

Quotables

“I’m like a control freak. I don’t want to depend on maybe somebody sends someone my way…”—JS

“I always help people if I can, but there’s a limit to what you can do for any one person before you have to turn the meter on.”—RM

“Like the difference between a hunting model and a gardening model, the word of mouth authority marketing is a gardening model.”—JS

“Referrals are a long-term play—and they’re so uncontrollable.”—RM

“I cannot stand this feeling of just hoping the phone rings.”—JS

“If you’re operating on an old model (and you haven’t positioned yourself well), depending on referrals is going to get worse.”—RM

“It’s that word of mouth that I would rather have, and it is more predictable than referrals—it’s more like tomatoes coming out of the garden.”—JS

“There’s such a difference in somebody who comes to you because of the authority that you’ve built—they come to you basically pre-sold.”—RM