The Hidden Danger of Running a Referral-Only Business

7FL - Ep.107 Referrals
Teaser: [00:00:00] Maximizing and optimizing referrals for your business, right? Because again, they are the best lead source when they are available, and we absolutely want to maximize the impact that referrals have on our business, while also having a consistent lead generation system that doesn't depend entirely upon the referrals and when you do this the right way, these two actually become a virtuous flywheel.
intro: You are listening to the seven-Figure Leap podcast. We're here to leverage rich relationships and smart strategies to take your business to the next level. Here's your host, Dustin Reman.
Dustin: Referrals are awesome until they're not. I am Dustin Reikman. Welcome back to Seven Figure Leap. And today I want to talk about a topic I hear every day in our coaching business, and that is this [00:01:00] idea of referrals.
Dustin: So I think two things can be true at the same time. referrals are amazing. In fact, referrals remain our number one lead source here at Seven Figure Leap. Also true if your entire business is dependent upon referrals. You don't really have a business. part of the definition of having a sustainable, scalable business is controlling your own lead generation.
Dustin: Obviously, I'm passionate about that. That's exactly what we help entrepreneurs do is create a consistent lead generation system to fuel their growth. But yet, referrals are awesome, right? And so the reason I say they're awesome until they're not is you ultimately don't control referrals, right? if you have a key referral source and they pivot, or, you have a falling out, or, any number of things that you don't control, you can lose this golden goose that keeps, you know, sending you ideal clients.
Dustin: What I wanna focus on today is. Maximizing and optimizing referrals for your business, right? Because again, [00:02:00] they are the best lead source when they are available, and we absolutely want to maximize the impact that referrals have on our business, while also having a consistent lead generation system that doesn't depend entirely upon the referrals.
Dustin: And when you do this the right way, these two actually become a virtuous flywheel, right? The more. Consistent leads that you have and you're generating, amazing clients and providing transformation for them, and you're
building your relationships, you will naturally get many more referral sources. And those referral sources, again, generate new clients, which.
Dustin: feedback into the same virtuous cycle. So this is not a referrals or lead generation that you control. It is both. And I wanna focus right now on three key things that you need to put in place if you want to maximize the positive impact of referrals on your business. It's really simple. But it bears saying out loud.
Dustin: This is, something that we key in [00:03:00] on a sort of the tail end of our podcast Profits Accelerator. This dynamic gets, set up where many people come to us because they've built a great business. They have a coaching business, consulting or agency business that they love, and they realize that they're way over indexed on referrals sometimes to the point where their entire business is referral or word of mouth.
Dustin: You know, supported, that's bad. but as I've said a few times now, you do want to maximize referrals. So how do you do that? So step one, and this is the 80 20, this is the most important aspect of having consistent high quality referrals, and that is specificity. Okay. I think the trap that most people fall into when they think about proactively generating more referrals is they fall into this mindset of like, if I am too specific in who I'm looking to be referred to me as a client, then I will miss out on opportunity.
Dustin: Right? Because if I draw the boundaries and I keep [00:04:00] it real narrow, then That's limiting in some way, right? And I can understand that. However, the reality is if you stay broad and generic in your ask, you won't get anyone, right? So to kind of paint a picture for this and bring it home, let's say I am, you know, I'm having some issues at my house and I say.
Dustin: Hey, network. I'd really like a, a referral to a handyman, let's just say a repairman in St. Louis, right? So. All the people that I put that in front of, their brain will lock up and they'll think, I don't know. I don't know who to, who to refer. I probably have encountered many handymen in the St.
Dustin: Louis area, especially if I, you know, if I live in St. Louis. and so that's, that's an example though of how often coaches will ask for referrals. It's like, I'm looking for people I can help, with. Business, right? It's like, well, there's so many options that our brains literally can't access any individual names.
Dustin: If I change that, and I say I'm [00:05:00] looking for a reputable family owned company that repairs air conditioners in my neighborhood. Here in Glen
Carbon, Illinois where I live, well now I can get really good referrals, right? I can send a text out to friends in the neighborhood. I can put it in a Facebook page, in our community.
Dustin: And because it's so specific, everyone can access. The best people that they've had experiences with, with this specific issue, right? They're like, oh yeah, I, two years ago I had someone come out and repair my air conditioner, and they serve this area. Like here's their name, I'm gonna send you a text and connect the two of you.
Dustin: Like, those things happen, they go into motion because of specificity. Right. So an example on our own business, at a high level we do business coaching, right? And if I said, Hey, I'm Dustin. I'd love any referrals that you can give me, for business coaching. Even as I say that, you're probably like, yeah, I, I ain't got nobody, right?
Dustin: Like, there's no way I can give you a specific referral because it's way too [00:06:00] broad. But if I say specifically, I'm Dustin, I work with coaches and consultants who are running six figure businesses largely on referrals, and they have a story to tell and I want to help them use podcast guesting.
Dustin: As a way to grow their coaching business. Right? Or even more specific. I, I want to help someone use podcast guesting to launch their book. Now your brain starts to access who have I met, who am I community with? Who's in my masterminds, my who are my clients who are launching a book this year? Who I think would actually really love the idea of podcast casting as a way to grow their coaching business that is way more effective because it's way more specific, right?
Dustin: So number one here is be specific. So. the cool thing about specificity is you can also be specific at different times in different ways, right? So you're not locked into only ever working with, in this example, coaches who are launching a [00:07:00] book, like I Can next quarter. If it's a different focus, say, Hey, I'm looking for.
Dustin: Coaches who host a podcast who are not getting the results they're looking for from that podcast. And I wanna help them use podcast guesting as a way to grow their podcast and ultimately get them more clients for their coaching business. Right? Or I'm looking for health coaches. In Illinois, who are looking to expand their footprint online, and they have a great story to tell and they would like to use podcast casting as a way to grow their health coaching business in Illinois.
Dustin: Each of these specific examples provides an actual way for our brains to access referrals. And even if someone like just loves you and would love to connect you with the best people, if you're not specific, they can't. that's the big lesson here. So that's number one. Number two. Even more simple ask.
Dustin: Okay. So, I think a lot of us kind of sit back and we hope that someone's friendly enough to think of us in their morning [00:08:00] walk and be like, you know what? I want to connect, Jill to Joe. I think that, you know, the two of them, could really collaborate and do some cool stuff together. Like that happens, right?
Dustin: But that is very passive. So if you wanna be active and you want to generate referrals, you need to ask. Okay. And so, what are some ways you can do that? Well. You can be. In tune to and have your antenna up for opportunities, right? So, if you're on a call and there's an opportunity, you're in a breakout session with some people, and they're like, Hey, what's your big goal for the year?
Dustin: Well, I'm glad you asked. You know, like, here's what I'm looking for, and you're very specific and you. Ask for any connections, referrals, collaboration, partners that they may have in their network. the other way to think about this is systematizing the referral process. So again, this is something we do, something we started doing hmm in the last year.
Dustin: So when people finish Podcast Profits Accelerator the first 90 days, our core program. As part of the offboarding, we ask them, you know, for [00:09:00] feedback on the program and we're continuously improving that. But as part of that feedback, one of the questions is, do you have anyone that you know in your network that would benefit from this?
Dustin: If so, please, you know, take action. Please put their name below, or please, you know, send us a message. So that's a systematic way. So every client. At least once gets asked, right? the other thing that you can do, as another value add here is when someone enrolls in your program on the front end and they're super excited and they're really, you know, jazzed up to work with you, that's a great time to ask for referrals, right?
Dustin: So, hey, you are joining the accelerator. we're really excited. We kick off in, three weeks. Who do you know that? Should be in this program with you, sort of like, let's bring a friend along, right? And at this point, they're already tuned into the specificity 'cause they've already made the decision for themselves.
Dustin: And so that's another great place to ask. So think about this in your, fulfillment, your [00:10:00] onboarding, your offboarding, your regular email communication, your social posting, create a regular cadence of making very specific ask. Of people for referrals. So that's number two is to ask. So we've covered Be specific and ask number three.
Dustin: The final one here is incentivize. And these are definitely an order of importance. You don't need to incentivize people to make referrals, but it definitely helps, right? So if you get to a point in your business where you understand the value of a client and you know what it would, be worth to you to incentivize people to.
Dustin: Send referrals, like you should totally do that, right? So this could look like an affiliate program, a referral relationship. It doesn't have to be anything technical or fancy. It can literally be, a, a. Stated, sort of casual handshake agreement of, Hey, when you, find someone who's great for this, or, you know, following steps one and two, and they say, you've been specific and you've [00:11:00] asked, you could say, and by the way.
Dustin: If you send us someone, and they are qualified and they're a perfect fit, and they sign up, we're gonna send you a thousand dollars, or we're gonna give you monthly recurring revenue for as long as they stay part of our, agency services or whatever your model is. That's a really compelling way to stay top of mind for people.
Dustin: Right. So again, it comes last because what I'm not saying here is go out and sort of do old school, you know, bro marketing where it's like. All affiliates, right? It's not like, pay to play and like it's not transactional. It's still very relational, but it kind of adds that cherry on top where we can incentivize someone to share.
Dustin: The other thing with incentives is it allows you to get a broader base of referral support. So, you know, it's great to get a direct introduction to someone who becomes a client, and you should reward that if you can. And that's part of incentivization. But also, let's say you're hosting a workshop or you have a
really good lead magnet that you can send [00:12:00] people via email, you can incentivize people to share that and track those leads and then give them.
Dustin: You know, a, generous commission on the backend when someone ultimately becomes a client. So it doesn't even require them to think of an individual to refer, but more of a, mechanism to refer a lot of people sort of at
the top of the funnel. And then you do the job of educating them, qualifying them, and converting them into your programs, but as a reward for doing that.
Dustin: You can incentivize them with a generous referral commission. So be specific. Again, that's 80% of the battle here, and it's the part that I, I see people mess up all the time. so be specific. Ask and have a systematic approach and a, mindset towards asking in a really generous way serving way and three, incentivize as appropriate.
Dustin: And if you do these three things, you will definitely get more referrals. And the way I like to frame this is if you do these things versus not do [00:13:00] them, the very worst case is you'll get zero more referrals. Like there's no harm in this. And all the things I talked about don't really. Cost you anything in terms of, outlay directly or, even much time, right?
Dustin: Like if you're just doing this as part of your processes, it. Again, becomes a virtuous cycle. So those are my three keys to generating referrals at a much higher level, much higher quality, and staying top of mind with people in your network so that you're the person they think about when someone has the problem that you solve.
Dustin: And I'd be remiss if I didn't say. Don't only do referrals, right? So again, if your whole business is built on referrals, you also want a way to consistently generate leads that don't depend on one individual human connecting you to another individual human. Like, take that, of course, leverage that, love that, embrace that part.
Dustin: But you also need to control your own destiny. You also need the ability to generate leads on demand. [00:14:00] So of course, that's what we do at the Podcast Profits Accelerator. It's all about generating leads through. Telling your story, coaching, loving on people the way that you like to do that in this amazing medium of podcast casting and what a lot of people don't realize is.
Dustin: Beyond the podcast guesting appearance itself. What you're really doing is building high quality relationships at scale with not only the listeners, but the hosts, the other guests on those podcasts. And if you do that systematically, you generate this amazing pool of people that are also referral partners.
Dustin: So again, it's a virtuous cycle. It's a flywheel effect when you do both well. So I hope this has been helpful. I hope this has been encouraging to you. if
you want to. Come over into our world, learn how to not only do referrals better, but get out of the business of, depending on referrals. we would love to serve you in the Podcast Profits Accelerator, and of course you can talk to us and see if that is an ideal fit for you at this stage of your business.
Dustin: Just go to seven figure leap.com/call and we look forward to talking to you then in the meantime. [00:15:00] Get real specific today. Think about exactly what you want to ask. Go out, ask someone in your network for a high quality referral, and if you'd like, you can also incentivize them to do it. All right, we will see you next time here on the Seven Figure Leap Podcast.