First the real question. Do you measure your referrals and where your customers originated? It really isn’t difficult if you just want to get started. A tally sheet kept at the cash register, a customer database, even a 29-cent Palm Pilot (a pocket-sized spiral notebook) will get you an initial measure.
Why track client referrals? If you know how much time, energy and money went into getting your clients, you can see which methods you want to keep when you are looking for expenses to cut. You would cut the one that was least effective, not the one that was most expensive. Alternatively, when looking for more customers, you’d want to expand the programs that are most effective.
Be careful what you track. A common approach is to measure the final trigger that ‘caused’ the prospect to become a customer; for example, being introduced by an existing client. That, however, leads to some inaccurate conclusions. For example, I have 69 clients that have come directly from my networking efforts (PRE, Chamber mixers, Church, Boy Scouts, etc). Those people have introduced me to another 90 clients. It would be easy to say that the 90 came from ‘client introductions’, while only the 69 came from networking. That would lead me to the false conclusion that I should focus primarily on client introductions to build my future business. Especially since those are virtually free; there are no dues or mailing costs and it takes very little time to generate them (except of course for the hard work I do to earn client satisfaction). However, if I had not done the original networking effort to get the first client, they wouldn’t have been able to introduce me to their friends and family. It’s like trying to have grandchildren without first having children!
Measure the lifetime value of a referral source. Instead, I include in my metrics for each networking group, the full count of original clients and the people they introduced to me. Thus, all 159 clients came from networking. That tells me I should keep networking and look for new ways to network. So, the lifetime value of my involvement in PRE, for example, includes all the clients that have been introduced to me by people who first became clients from PRE. That total is 31 with 18 of those being second or third generation.
Oh, and yes I should keep on doing a good job for my clients so they keep introducing me to their friends and family.
Now stop reading about Your Referral Network and start doing! Let’s create YOUR personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at firstname.lastname@example.org.
Many of the self employed business owners I talk to are skeptical about when, how fast, or how prolonged any coming economic recovery will be. That leaves them reluctant to spend money right now when they are unsure of how soon they’ll be getting a return on that marketing or expansion investment.
I talk to dozens of self employed and small business owners every week in my client meetings, networking groups, and chamber functions. Since my passion in life is to make my self employed clients more successful, I pay attention to the trends of the moment so they’ll benefit quickly
Here are 5 real-time ways my savviest self employed clients, friends, and connections are getting ready to reap results from the coming economic recovery but not yet spending a dime.
1) Get out there and network. Traditional old face-to-face networking is on the rise. Our chamber has increased its number of events and attendance has also increased. People are having conversations, handing out their cards and meeting new prospects.
2) Get quotes. Some self employed business owners are requesting proposals for new mailers, new promotional items, new brochures, or new Internet methods. Although they are taking longer to pull the trigger on starting the projects, they are gathering information so they can make an informed decision to spend when the time is right.
3) Get Ideas. In my networking meetings, several times weekly, I am hearing discussions about what’s working and how to get started. Again, the dollars are not yet committed, but new ideas are being discussed, weighed, and considered. People are talking to new potential vendors as well as old favorites. Also, they’re talking to other self employed small business owners who have the same target market to get different perspectives. For example remodelers are talking to real estate agents.
4) Stage your implementation. Some of my network of business owners and others are starting small. Several have discussed how to start remodeling projects and do it in phases because they are tired of waiting and still want the work done.
5) Get educated on Social Media, Internet marketing and unfamiliar techniques. I hear conversations on who is using LinkedIn and how, who is using Facebook and why, as well as what’s not working. My Internet-related business owners are hosting educational seminars and fielding a lot of questions, both in and out of the classroom. Several business owners I deal with have started new email newsletters so their names will be top-of-mind when projects come up. Such techniques are extremely inexpensive and perfect for business owners with time available but few marketing dollars.
So that’s it. Even if you are not getting big orders, large sales, or copious numbers of new customers, there is lots of pre-buying activity going on right now. Don’t let it pass you by; get out there and get ready.
Now stop reading about Recovery Without Committing Cash Today and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at email@example.com.