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If you dropped me in a new city with no money and I wanted to get the right kind of business fast, referral marketing would be what I would do.
Jay Abraham
The six billion dollar man
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"The most valuable referral is the one that comes from a trusted friend."
Richard Branson
Founder Virgin Group Of Companies
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"If people like you, they'll listen to you, but if they trust you, they'll do business with you."
Zig Ziglar
Marketing and Sales Legend
"Nothing is as powerful as a recommendation from a trusted friend"
Mark Zuckerberg
Take a look at the proof for a moment:
Referrals are a $6 trillion economy where loyal customers are the most credible growth engine.
It's this 'referral effect' that led Dropbox from 100,000 to 4 million users in 15 months, Uber to reduce customer acquisition cost by 70% and Paypal to reach 100 million users with 10% daily growth in the early days (PayPal Viral Growth Report 2002)
Referred clients are both more loyal and more valuable:
- Referred clients are worth more: Referred customers spend 15–25% more on their initial purchase and have a 16-25% higher LTV than non-referred customers (Journal of Marketing, Schmitt et al., 2017)
- 4-5x % more likely to refer you to others: Referral customers are 4-5x more likely to refer others to your business... teh snowball effect (Wharton School of Business study)
- Say "yes" faster: Referred clients spemnd less time in teh sale pipeline and say "Yes" to working with you faster, with less time and effort to convert into a client.
- Stay clients for longer: Referred customers have 37% higher retention rate: Extole. (2018). "Referral Marketing Benchmarks Report."
- 3-5 times easier to convert than regular clients: Referred customers have 3-5x higher conversion rates (TRJMetrics Study)
Even car companies like Tesla have a 42x return on their referral program and have saved approximately $1000 per car in marketing costs and generated over $1B in sales through referrals (Tesla Shareholder Reports (2015-2019)
But not all the benefits are provable and asssuming you get referrals already, you'll most like know referred clients:
- They already know they want to work with you: This means less time and effort to convert into a client and less time in the pipeline
- Quibble less over price: Price is less of an issue because of the trust factor so the sale is more like a friendly conversation
- Easier to manage: They already know your value and trust you more and are generally nicer to deal with
So allow me if I may to give you a very conservative example of a referred client strategy in action...
Who am I? (and why I care!)
Hi my name is Steve Cole and people often refer to me as "The Referral Guy" because I consistently and predictably get huge volumes of referred new business.
I've had 7 figure referrals and grown 4 businesses almost completely by being referred great new clients. Getting clients was easy. But it wasn't always that easy for me...
It was back when I was an introverted, shy 25 year old and my business was 7 years old, that I lost my business and my home in a deep recession. I was literally homeless.
I was doing business the way everyone else did business with advertisings, which were expensive & unpredictable and also brought in a lot of poor quality headache inducing leads. I wanted to just do what I was good at, and not spend so much energy sucking time trying to bring in the business!
After I was made bankrupt I new things had to change! I learned how to get referrals from the best and highest paid marketing people on the planet, and turned everything around within 60 days. Within a year we were up into 7 figures and beyond. This was purely from referrals.
BecauseI was shy and hated asking to be referred, I created an honest and ethical way to get referrals that makes clients feel great when asked, so I wouldn't feel awkward or paralysed with embarrassment!
For the next 20 years I refined this system.
Referrals are like a ' Predictable Client Engine' that brings you prequalified dream clients over and over agian, for free.
It is the ultimate 'no brainer' must have strategy for all businesses who want to succeed big, that will always work, no matter what happens around you.
What People Say
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Truly awesome. I've sat in on lots of 'how to network and pass referrals' workshops to saturation. Finally there is someone who explains in more than one dimension how to get great referrals. Thanks, Steven. I'm finally beginning to get how we can actually create the foundations for referrals to come to us and how to create these foundations.
Max Alter - Video Creation & Marketing Consultant
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"I love how Steve was able to shed some real insights & practical ways to grow my business. His ability to analyze and break down the actions needed to deliver significant results were clear. I look forward to further building on this partnership".