Why Businesses Fail To Grow

Most people try to win new business the hard way.  


Everyone knows that the best way to profitably grow your new business customers is through word-of-mouth referrals.  Every business can benefit and every business owner knows how important it is.  So, why do only 26% of businesses get enough new business leads through referrals?  Why do business owners still spend much of their profits on advertising, on sales people and on other marketing channels yet achieve poor word-of-mouth referrals?  If only they could get a steady source of word-of-mouth referrals every week every business owner would be enjoying the growth that comes from people referring new customers.

Further, what if we never needed to ask for another referral again - but we got them anyway!  What if it did not matter whether you were an experienced sales person or a sales trainee?  What if everyone could learn how to achieve more referrals and therefore new business growth?  Is there a catch?  Yes.  You have to unlearn some of your old sales habits and create some new processes.

If you are not getting enough new business from your existing customers or suppliers, like any business improvement, you need to change your current processes .  From our work with businesses of all sizes there are usually 5 steps that are required to profitably grow your business leveraging word-of-mouth referrals.  Within each of the steps below we assist our customers to setup the correct processes and to achieve the outcomes that come from doing referral marketing well.

1. Start With The Right Mindset in Your People


Leaving referrals to chance is a horrible waste for any business.  The key is to develop a mindset and formal process centred around actively developing your relationships with your clients such that referrals come naturally and easily.  For example, don't get hung up on the need to ask for referrals!  They will come even if you don't ask.  We develop scripts that work and we help sales people avoid the ones that don't work.

For instance, this is one type of common practise that doesn't work:

At the end of a 2 or 3 hr client meeting the typical referral conversation may sound something like ... “ here’s a few of my cards, if you have any friends that might be interested in speaking with me, please give them a card ... “ smiles are exchanged, the sales person breathes a sigh of relief and the business cards get “filed” when the client gets home........  Does this sound familiar?

2. Understand What's In It For Your Client To Refer

We see dicey processes all the time that may involve financial rewards for the referrer that are not appropriate.  Many sales people and business owners don't take the time to think about why someone would refer you on to another customer.  It's not because you asked, by the way!

We help businesses develop good practises and processes around doing what's right for clients and making them refer you to other customers eagerly - often with no financial reward required.

3. Know The Value Of The Client Relationship

Understanding your current customer relationships and knowing what each customer values is essential.  But, you will not usually get this by simply asking "Do you enjoy using our product or service?"  We assist clients to implement a process where the customer-facing people ask great questions and get fabulous information which help position that client for offering referrals down the track.


4. Master the Process

You can't just read a book or an article on a website and assume automatically your sales people will excel at growing your business through referrals.  It takes practise in addition to well customised and documented processes.  This is analogous to the often repeated phrase "we had a great idea but we failed to implement it successfully".  There are definite steps that need to be practised and mastered.  The great thing is that anyone can master the process no matter how long they've been selling.

5. The Trilogy of Trust

Who is more important - the new contact or the referrer?  Strange as it may seem, the referrer is more important.  Doing a great job with the new client is important.  But, keeping the referrer informed and respecting their role will lead to even more referrals. You need to respect both the person who referred you and the new contact that you have made.  Having a communication process to achieve this every time is vital.


We come across businesses all the time that either overdo the communication to the referrer or do too little.  Trust will come from respect and good communication.  The most desirable outcome is to achieve a "Trilogy of Trust" between your business and your referrer and your new contact.  When this happens referrals will multiply exponentially. We know because we assist business owners every day to do just that.

If you own a business and would like to see it grow through excellent referral processes then let's have a chat.  Otherwise, let us know in the comments below your experiences with good or bad referral practises.


Chris Pattas

Chris Pattas lives in beautiful Melbourne, Australia. He is happily married with two children. Chris is a successful business leader who enjoys helping organisations reach their full potential. Whether it is driving greater profit or sales, growing market share in competitive industries, inspiring executives to achieve great things, negotiating compelling business deals or working as a board member implementing exciting change programs, he knows how to get the most out of any organisation. Chris has worked in various product and service industries including: advertising, software, IT&T, travel & tourism, utilities and telecommunications. His interests and expertise include: leadership & strategy, sales & marketing, online & social media, science & technology, travel & tourism, photography and music.