The Magic of Business Referrals

By: Eve Jackson

It's tough to get a small business going. And it's sometimes even tougher to avoid the high failure statistics.

One of the big things in internet marketing has been affiliate programs. Affiliate programs are kind of like the old multi-level marketing systems where other people get paid to sell your products or services. Or they get paid to send visitors to your site. Usually the higher selling affiliates get extra rewards (if they don't they should )

So why am I talking about affiliates here? Because affiliates refer. And that's what I want you to do. Find people to refer clients to you.

You can ask past clients, friends, business acquaintances, friends. Ask anyone you can think of. Ask them by letter or in person. Doesn't matter how. Just do it.

Because here is the magic of referral systems. Direct mail to a cold prospect returns between 2 and 3 % responses. So, mail 1,000 direct letters and an average response will get you between 20 and 30 replies.

But...

Get someone to refer a business or client to you and your response goes up to a whopping 60%!

Now, you probably don't have 1,000 people or businesses you can ask for referrals from, but let's say you have just 10% of thatyou've got 100 people you can ask.

Asking just those 100 to refer business to you will get you, on average 60 interested prospects. Double that of the 1,000 direct mail letters you sent.

And add this to the mix- the cost to contact those 100 acquaintances to refer business to you is far less than contacting 1,000 cold prospects. Which means a better return on investment.

Once you do business with those interested prospects, get them in on the action. Ask them for a referral. It just keeps going and going...

Give it a try. What have you got to lose?

Entrepreneurship
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