Million Dollar Referrals

February 19, 2011

An excerpt from my new book to be released by McGraw-Hill in a few months:

I was introduced once to a top client team by their boss who had hired me, who had used my help in a prior company and who, himself, was once a consultant in a former life. He opened with, “Alan is a consultant who, like any good consultant, will work closely with us until, like some incurable disease, he has taken root in our systems and we will not be able to get rid of him.”

That brought some nervous laughter—including my own—but I understood his point. Good consultants want to do such good work and meet so many potential buyers that they spread their tentacles throughout the organization seeking sustenance. This is because my mindset is that they need my value, not because I’m “searching for business” or “trying to reach revenue quotas.”

In your calendar, or diary, or Filofax® or cocktail coaster (whatever you use for critical reminders) you should note the following referral potential sources and check off whether you’ve inquired about them. If you don’t discipline yourself, you’ll tend to overlook sources. Feel free to copy this right out of these pages. Note how many of these sources there are, and that you cannot afford to overlook any of them in each client.

Potential Referral Sources to Be Sought

o Buyer Peers o Buyer Superiors

o Buyer Subordinates o Client Vendors

o People in Parent Organization o People in Subsidiaries

o Professional Colleagues o Acquaintances and Friends

o Client’s Customers o Trade Associations

o Regulatory Groups o Media Contacts

My estimation is that it is about 20 times more difficult to bring in new business than it is to develop repeat and referral business. It also costs five or six times more in money and time. Think about it. Asking for a referral or another project within a client takes little time and zero investment. Trying to unearth a new client—turn a cold lead into a warm prospect and then a hot client—is laborious and expensive in terms of trips, time , and managing the process.

Thus, your hunt for referrals is an excellent investment with a significant ROI.