Are refferals important?

[HUMBLE]

Do the referrals play a major role in Sales? If yes, by what %?

[dooooors]

Absolutely, but it is not the easist process
to figure out, that of what level they actually
play in making a completed sale(s).

I once passed a business card to my employer
for a housemate, I got paid well for my effort.
Do I really know what I did or did not do for either
party - no! And they never told me either!

I heard it is a good rule to measure the increased
sales by the active number of associates that you
maintain, but I think that it is almost impossible
to do unless you have a well structured referral
program to track things with.

Another words, that of your asking
people to provide names and numbers on a
sheet of paper and therefore you have a
measurable idea, but without such
a program - you have no clue who is
out there complementing your services.

And, if you have a workable formalized referral
system in place, you probably don't need to
depend entirely on that source for keeping a
profitable market base (very unlikely).

If you are that good with it, you might want
to include a few conditions in the structure.

eg. Anybody wanting to do business with me
must keep things simple, and no smoking in
the my office bathrooms please!

That could be a very important issues if
your assistant is alergic to smoke, or
if your lawyer hates insurance agents.

Right now I'm at 20%.(this month)..50% would be nice

[HUMBLE]

Thats nice of you, Eborg

Referrals are everything in some businesses. Consumers are wary of scams and an opinion from a friend, relative, or business peer will carry a lot of weight.

Knowing someone with actual experience with a potential supplier of products or services is golden. Not every small business owner remembers to ask new customers if they were referred or just how they learned about what they offer.

My referral rate exceeds 60% which may explain why I'm MIA from SBF for weeks at a time. I am truly blessed with loyal clients and repeat business.

Cheers,

Jim

[HUMBLE]

Do we need to put up any process in place to keep track of these referrals?

Hope that might help for repeat business.

[dooooors]

Yeah, its possible to know who you have, but at the same time there is no way to identify the losses because of wrong referral messages. When somebody approaches you - they need to be asked about what specifically that they heard. Even when people hear something similar, they don't all hear the same thing (we all see a different event although the same accident took place kinda scenerio). Couldn't every business function be improved?

[FrodoSan]

Referrals make up about 80% of my marketing. Bill Cates has a great book on referral marketing, which was really corny at first, but when I saw a pro use it (on me) I was impressed at how natural it can be.

Referrals are great because the conversion rate is so high. On the people that randomly find my website and are looking for high-end services, we're rarely breaking 10% conversion... referrals are over 90%. It's a no-brainer. Marketing is about trust, and that trust can come via proxy. So treat your clients right, and make sure they understand that you would be delighted if they sent you business

[dooooors]

yes, that is a positive note about referrals, but i have mechanic that is doing service for relatives and friends because of referrals....however don't think that the 10%-20% not referrals (other modes of marketing) aren't good conversion - because those small numbers might lead to another tree of blissful referrals!! and it is very important to distinguish between something that spreads well because its good product vs. what it is that makes it so delightful to engage ......or the competitor might have better words comming down the road!! eg. webspace pricing and perks (how did that go so low?)

a good method might be to tell a customer that you offer discount a friend of-there's (i am not directing this to any specific person on here)....people need reasons and those reasons have to be indentified and reinforced.