Why you should not rely on referrals to get new business

In today's episode of the Agency Accelerator podcast, I want to talk all about what's wrong with the fact that you may get most of your business from existing clients and from referrals. So if that's something that's going on for you right now, then this episode is going to be really useful and an important one. So make sure you listen. Now I'm going to talk about what's wrong with that strategy and perhaps more importantly, I'm going to outline some steps you can take to create a more proactive business development strategy for your agency. So strap in, grab a cup of coffee, or put your earbuds in and walk the dog. And listen to today's episode of the Agency Accelerator podcast. Accelerate your agency's profitable growth with tools, tips and value added interviews with your host agency owner and coach, Rob DaCosta. When I meet a new potential client, one of the questions I will always ask them is how do they get their current new clients, their new business? And often they'll tell me that, rather proudly, that they get all of their business from referrals or from existing clients, and that they have no other major business development strategy because they haven't had to in the past. Now this is great, of course, in some respects, but sadly they are in for a bumpy ride. And often people start talking to me because they've realized that, because perhaps their referrals have started to dry up and so they need to focus on business development, but they don't really know what to do. So let's explore what's wrong with a strategy if you are relying on winning new business from existing clients or you getting referrals from your network. So first of all, of course that is fantastic and something that we want to encourage as much as we possibly can. And whilst the economy is good or whilst your network is really strong, it works pretty well. But what happens if it dries up? For example, what happens when the economy changes? You know, Covid, suddenly you can find yourself going from a fairly full order book to a very empty one. So that's one issue about referrals is that it's an external thing that you're relying on other people to control. And talking of control, one of the things about that is that you have no control over the quality of those referrals, whether those referrals actually fit in your core niche and are your ideal target customer. And you also have no control over the frequency of when those referrals come in. So one month you might be inundated with opportunities and another month you may have nothing. And that can lead you into the famine and fees cycle, which as you know and as we've talked about before, is not a very nice place to be. So the problem with relying on referrals this way and new business from existing clients is that you don't have a ton of control of when they come in. So if we can acknowledge that, then let's start talking about some things that you should start doing. Even if at the moment you are still relying on all of your new business coming through this route. So first of all, as I've said, of course that doesn't mean you shouldn't encourage that. You want to make sure that your network really understands what you do, who you serve and who your ideal target client is. So in effect you're making them mini salesmen and they are able to not only refer contacts to you, but refer ideal target prospects to you as well. So that's one thing we want to make sure we're nurturing that and of course we want to make sure that, that we are winning new business from existing clients. You know when someone talks to me and they say I need a strategy now to win new business because I have a big gaping hole in my order book and they start thinking about some of the marketing things they can do. Truth be told, all of those marketing strategies are really going to be medium term return on investment. Very few of them are going to give you a quick return on investment. Despite some of the claims that you'll see spattered around on Facebook and LinkedIn. The truth of it is that you have to make an investment in engaging with your audience, building that know like trust with them and providing value before they will buy from you. But anyway, so if someone says to me, look Rob, I really need to get some new business quickly, I will always say to them, look, look inwards rather than outwards. Start off by a re engagement campaign. Talk to all the clients that you have worked for in the past, see if they have any work for you and also talk to your network and say, look, we're growing, we're taking on new business, so if you know anybody, please put them in contact with me. That's the kind of only short term strategy. And of course I shouldn't forget the fact that you obviously want to be able to try and sell additional services to your current and existing clients. But the other things that I'm going to talk about now are all medium term investments. But the truth is if you don't start investing in them now then you're not going to ever get to that medium point where you start getting some return from them. So let's just focus on some of the alternatives. And I want to start off by just really reminding you about the concept of your sales funnel. And if you think of a sales funnel, it's wide at the top and it's narrow at the bottom. So at the top we've got new ideal target customers coming into your world. They may not know much about you at the moment, so they're kind of cold contacts, but nevertheless, they could be customers in the future. Then as they move down the sales funnel, you start to engage with them more, you start to provide them with really useful content. So they start to get to know you and get to like you. You share testimonials and case studies and you provide some training and some value so they get to trust you. And then of course, you start speaking with them one on one and they really get to know you. And once you've taken them through that know like trust journey, then you can start trying to close the deals with them. So we, we have to remember that all of our marketing and our business development activities have to take people through that know like and trust journey. And there is no way of shortcutting this. A couple of podcasts ago, we spoke all about LinkedIn and how to use LinkedIn as not only a social media platform, but a business development platform as well. And if you've ever had that annoying situation where someone sends you a generic connection request where they haven't even taken the time to send you a personal message, and you look at them and you think, well, actually they are a good fit for my network, so I'll accept them. And as soon as you accept them, you get a message from them trying to sell to you. This actually happened to me this morning. Then, you know, I'll go, I don't know about you, but I'll go out of my way to disconnect from them because why on earth would I buy from someone who, A, I have no idea who they are and B, I have no idea if they can help me. So they, those people are trying to bypass the know like trust sales funnel and you can't, because you're never going to buy from someone if you don't trust them. I always use an example of water here. If you could buy two bottles of water and one of them was, say, Evian, and one of them was a completely unbranded bottle of water you'd never heard of, and The Evian was £2 50 and the unbranded bottle of water was £2 20. There's a very good chance that you're going to spend the extra 30p buying the Evian because they, through their advertising and their sponsorship and everything else they do, they've already taken you through that no light trust journey. So you your confidence about the quality of the water that you're going to get when you buy it. Whereas this unbranded bottle, even though it may be cheaper, you have no idea who they are. And so when people try to bypass the LinkedIn process, for example, they're just trying to sell you the unbranded water that you've never heard of. So our marketing strategies, our alternative business development strategies to relying on referrals have to be starting with getting your ideal target audience to join your sales funnel at the top and then nurturing them to take them through the know like trust journey to the point where they know you, they like you, trust you, and they want to buy from you. So let's just talk about some of the things that you need to do. So I feel like most agencies are pretty good at the top of the sales funnel. They're pretty good at getting new people into their world, and they're pretty good at the bottom of the sales funnel. That's the prospect meeting and their proposal, writing and closing the deal. But they're really poor in the middle part of the sales funnel. And the middle part of the sales funnel is where you are building credibility and trust with your audience. And this is where you want to be really providing. So, for example, if someone signs up to your email list or if someone connects with you on LinkedIn, you need to make sure that you are providing value to them and that you understand them and you are truly helping them. And yes, you should be doing that for free. You shouldn't think, oh, my God, I can't give this away because, you know, I'm giving away my ip. Well, quite frankly, that's kind of a crazy way to think. If you think about this podcast, I am giving you content now that I give my paid clients because I want to help you, my audience. I want to take you through the know like trust journey, build a relationship with you. So at some point in the future, when you have a need that you know, I can solve for you, you'll reach out and say, hey, Rob, can we have a chat? So don't be scared about giving value away. And in fact, that's exactly what you have to be doing in that middle Part of the sales funnel provide value. And if we think about two ways of doing that, one is your email list through your reg emails and one is your social media. So that might be posting on LinkedIn or Instagram or Facebook or sending out some direct messages. You have to take this 8020 rule. 80% of the time you're providing value, 20% of the time you're selling. Now let's just understand why that percentage split is so important. If all you ever did was provide value, then people will get to know you as a great resource, but they'll never think of you as a place to buy from. And similarly, if all you ever did was sell well, obviously people get fed up with you pretty quickly and they would unsubscribe from your list or start ignoring you on social media or even unconnect from you. So it's really important to get this 8020 rule, 80% of the time, adding value, 20% selling. Now I've talked about building your mailing list many times and there are many other smarter marketing gurus than me who will tell you how important it is to build your list. And certainly if you're building an audience of people who are coming into your world and interested in talking with you in your list, then you can keep providing them one to one communications that add value. Now when you think about it, when people come into the top of your sales funnel, there's almost like three stages they have to go through. The first thing is they have to say, I'm kind of interested in what you've got to say. I'd like to follow you. Stage two is I'm interested in what you've got to say. I enjoy reading your content and I know one day I'll buy from you. And then stage three is I'm ready to buy from you. I'm going to reach out to you. And of course these types of prospects are the best ones ever because when they reach out to you, they have already pre qualified themselves to some extent because they know what you do, they understand how you can help them and they're reaching out to say, hey, can you help me? And that's much better than doing any kind of cold outreach where you're almost throwing a load of stuff out there and hoping some of it sticks. The days of cold calling and that kind of cold emailing just doesn't work anymore and it really isn't good practice. So this is my strategy for all of this. You need through your social media, through any advertising you might do, through your Networking, you need to drive traffic to your website and then when people get to your website, you need to direct them in the right direction that they need to go to serve them and help them. And that means without going into too much detail, because we could do a whole episode on just how to structure your website. But fundamentally on that top part, the above the fold part of your website, you need to have a button that offers your audience something of value. And this button should not be contact me or join my newsletter or subscribe to my mailing list because none of those things work. Because guess what guys, if someone's just googled you, they don't really know who you are yet. They're not going to click on a contact you button because that's trying to skip the know like trust. Okay? They might, you might be able to build some of that through the content that they read on the website and that might lead them to contact you. But by and large most people won't do that. So that button that is above the fold needs to be an offer to download something of value to your target customer. And as many of you will know currently on my homepage and my above the fold, I have an offer of getting hold of my self running agency book for free. And that works well for me. I get lots of people downloading it. Once they've downloaded that, then they go into my email nurture sequence. So you've got to make sure that your website is working for you. Now that piece of free content, and by the way, it's gated content so they have to give you their email address to get it doesn't have to be a hundred page book like mine, it could be a one page cheat sheet, it could be a, a one page audit, it could be a tool, it could be a quiz. Whatever it is, make it simple, make it attractive and provide genuine value for your audience and drive traffic to your website. And then they will download it and they will get into your email list and then at that point you can start sending them nurturing emails which provide continued value. And as I said, take the strategy of 80% adding value, 20% selling. So really every business needs to focus super hard on building their list. And if you don't have a list today, I would suggest that you start grab a sheet of paper, write down everybody you know and you will quickly find that you've got 100 people that you can put on your list. And then implement this strategy of using your website to get more people on your list. And that way you will Start to build your list. Of course, you need to work out what you're going to send to your audience. And there's a really useful tool that I use with some of my clients called a content Twister, which takes one idea and helps you come up with seven variations on that. So that's a really useful tool. So if you're stuck for ideas and you're thinking, well, Rob, yeah, I understand I need to build my mailing list, but I don't really know what to send my audience, then I'm going to put a link to a blog post I wrote earlier this year called why Email Marketing Should Be at the Top of youf Agenda. Have a read of that, because it kind of digs into what I'm talking about today in more detail, and it also gives you a chance to grab the Content Twister for free. So have a read of that article. So, broadly speaking, in a very simplistic way, your external communications, your social media posts, your blogs, your podcast interviews, any partnerships that you do where you are guesting on other podcasts or blogs should be driving people back to your website. And when they get to the website, you, you should be really clear about the action that you want them to take. And your goal should always be to get someone to give you their email address before they leave. And in return for that, you're going to provide them some value. Then once you have got them in your email list, you're going to start regular email communications to nurture that audience by providing them with value for 80% of the time and selling for 20%. And just to give a bit of context for that and let you know, what I do in case you're not on my list, is that most of my emails, like 99% of the time are an email about providing some value. Then at the end of the email in the P.S. i might say, here are four other ways I can help you. And in there I might talk about private coaching, setting up a strategy call, joining my coaching program, listening to the podcast or whatever. I vary that week for weeks. That's where my selling comes in. Now, an important point to make here is that your customers are ready to buy when they're ready to buy. They're not ready when you want them to buy. Yes, of course we've got to do whatever we can to get them over the line to make that purchase, but you have to be nurturing your audience. So as I say, when they go into that third stage of saying, I know who you are and I'm now ready to buy. They reach out to you. Now, as you can imagine, there are lots of other strategies that I haven't even begun to talk about today that you could follow, including running webinars, live trainings, doing partnership events, and so on. But my advice to you would be to implement this strategy, do a few things and do them really consistently. Well, don't do lots of things and then decide that they're not working and give up and then move on to the next shiny new object. Because you will never get anything working if you do that. You have to be really persistent. I mean, a good example of that is this podcast. You know, when I started out this podcast, I was probably releasing episodes to the Crickets because it takes time to build up that traction and that following before you get a big enough audience to actually make it have any kind of return on investment. But if I'd have looked at the first few episodes and thought, well, I've only had, you know, 50 downloads of this or whatever, I'd have probably given up. But no, when I decided to do this, because I'd heard that the average number of episodes a podcast to create before they give up is seven, I was determined that I was not going to be that person. And here we are on episode 40 and we're still going strong. So do a few things and do them really consistently. Make sure you are looking at the data, make sure you are thinking about how you can refine the process, but don't get seduced by Shiny New object syndrome, because I guarantee you will not get any results. And as I said at the beginning, these strategies are all medium term strategies in terms of winning you new business. But if you don't start them now, you will never get to that point where they start providing you some kind of return. So sort of tying all of this up. If you've been relying on referrals in the past and because perhaps because of the virus or other reasons they've started to dry up, then you need to make sure that you are starting to implement a strategy that we've outlined today. And if you're listening to this episode thinking, well, Rob, I don't need to worry about that because I still get all of my business that way. Just be mindful that one day that will change. And you need to make sure you're in control of your business development strategy. And so I would say as well as nurturing and encouraging those referrals, you need to put a more proactive strategy in place, such as the one I've outlined today. So I appreciate in 20 minutes I've covered an awful lot and I could speak on this topic for many hours and drill in a lot deeper. So I probably will talk more about mailing lists. I'm definitely going to be talking more about making your website work for you and also some other strategies that you can use in future episodes of the podcast. But today I think I just wanted to talk about this topic because over the last few weeks I've heard it quite a few times where people have said, you know what, I used to get all of my business through referrals and it's just dried up and I just don't know what to do. And of course, when you get to that very deep pit, it's really difficult to get out of. So before you ever get to that point, I would really encourage you to put a strategy as I've outlined in today's episode. Okay, so there you go. I hope you found that useful as ever. Please share the podcast far and wide with your colleagues. Please make sure that you subscribe, and also I would love it if you would leave a review if you enjoy listening to it. Other than that, I hope you have a fantastic Thursday Friday and a brilliant weekend. And I will see you next Thursday for the next episode of the Agency Accelerator Podcast.