The different referral marketing strategies are a great way to go for many businesses as they help increase the productivity of your business. However, there are some strategies that you need to watch out as they might not help you entirely. While some business owners claim that some types of standard marketing techniques work best for them there are also strategies that do not work for all business owner. Remember not to just jump right on top of the band wagon and be swayed away easily. Learn about these strategies and determine if there were better cost-effective options available to you rather than the ones mentioned here.


Getting Leads instead of Referrals

Before taking another step of the business process, you need to recognize what is referral and what is a lead. Knowing the difference between the two can make your marketing efforts go much more smoothly and effectively. A lead is a contact that may come from any number of sources. However, this contact is generally not expecting your call which more often than not will just basically regard it as something not much better than a cold-call. On the other hand, a referral is the opportunity to do business with someone in the market to buy your product or service who has been told about you by a common friend or an associate. In other words, when you contact them, they already know who you are and what you do. Referrals are more substantial than just a lead because the prospect has talked to your mutual acquaintance and is generally expecting the call. Hence, they are referred. Again, a referral is better than a lead because you can use the name of the referral source to open the door.

Relying on Customers

Referrals can be obtained from networking contacts, handing out referral letters, reputation, personal preferences or satisfied customers. However, relying on customers, clients, friends, or "centers of influence" to have to remember to talk about your business to their network of friends does not guarantee a productive result in your business. Once a referral source has given you the name of a person to call, it’s up to you to do the rest of the transactions. Unfortunately, this is where most people drop the ball when it comes to getting referrals. The problem stems from the fact that sales people tend to believe that “since Tom referred me to him or her” then all marketing rules go by the wayside. In most cases, all a referral gets you is a targeted lead who may take your phone call. Do not forget the fact that people want to buy from businesses and individuals that they know, like, and trust well enough. There is no guarantee that every new client generates referrals for you. This will work only if your referral source moves beyond the role of a promoter to that of a facilitator where he or she takes the responsibility of working out the details of getting you and the prospect together so you may discuss the business opportunity further, and if possible in person.

Relying upon Borrowed Trust

Many people that come to you on referral expect to pay a premium. However, you will always find someone who wants to undercut you. These are the people that are in a rush to go out of business and not build a business. This strategy will work only if a good friend referred you then all you have is a little bit of trust. Unless of course they don’t trust the person who referred you. If you are serious about getting referrals, then you must still help them understand what benefits you can offer. Of course, the effectiveness of your referral network in providing you with quality referrals depends on the amount of work you do to develop the sources in your network. There are many ways to encourage your referral sources to become active and enthusiastic members of your marketing team. Remember that someone who comes to you on referral was sent on trust. Therefore you are the benefactor of that trust. And people are happy to buy from people they trust.

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