Why your referral network is drying up

 

Referral Network

August, 2002: I was 16 and had been running the Café business for a few months, but now we were at a fix. Our daily number of customers was beginning to decline and more worrying, we hadn’t seen a new face in a while….

Lately, things haven’t been so great (cash-flow-wise) at the firm, so one night my co-founder asked me, “why don’t we have enough customers”? I am pretty sure he had pondered on this issue for a while before deciding to let me have a go ☺.

Anyway, I shrugged and gave the straight answer. “It’s because we are not selling to enough businesses”. Then I thought about it, do we really sell? A quick analysis of our business in the last 3 years points to one fact, 100% (not 99%) of our business are from referrals.

You see, I work in a software consulting firm, where we offer our excellent software design and building skills to enterprise customers who need customized business solutions. And like with most consulting firms, it starts off acquiring customers through the founder’s network.

referral network growth

It isn’t really so bad that all of our customers are gotten through referrals (in fact, I would argue that in a consulting business, your best customers are gotten through referrals), the problem is we had done nothing to nurture/grow our referral network.

So here I am, thinking; how do we grow our referral network?Do we improve (read: start) on our networking efforts i.e. attend events, conventions, product launches; sign up to a sports club, local bar, gym. OR do we dust up the old Rolodex and begin another round of cold calling OR like I did in 2002, do we start mailing envelopes (containing high quality prints showcasing our services) to potential customers.

 

This post first appeared on Mayor Brain’s Blog