Sustainable Business

7 easy ways to start building a sustainable business based on referrals

13 min read
Jennifer Bourn

If you're a business owner, freelancer or entrepreneur, you're probably going to networking events and conferences, being present on social media, and investing time and resources in blogging, cold calling, advertising, email marketing, search engine optimization, free offers, teleseminars, webinars, online challenges and direct mail. You’re doing it all to chase new leads, make more sales, gain new clients— and it's exhausting.

Yet even though you're working hard to close new sale after new sale and avoid the dreaded self-employment income roller coaster, it feels like you're always behind.

Wouldn't it be awesome to be able to stop chasing clients and instead have them chase you? How transformational would it be to have all the new clients and customers you need seek you out, and all you have to do is serve your clients and do what you do best?

This shift in new client and custom acquisition strategy can happen by focusing your efforts on building a sustainable business based on referrals.

Creating a referral-based business

Today at my company, Bourn Creative, almost 100 percent of our new clients come to us through a referral from a friend, family member, colleague, industry peer or associate

  • They reach out to us because one of our current or past clients recommended us and spoke highly of our skills and focus on high-end client service.
    They call because someone we didn't end up working with was so impressed with our portfolio, our reputation, and how we handled the sales process, that they recommended us.
  • They fill out our new project inquiry form based on our reputation and referrals made through social media.
  • Past clients hire us over and over for new projects because of the relationship we have nurtured and the trust we have built.

Our most lucrative clients and our favorite clients have all come from referrals, from people seeking us out based on what others have said about us and our company — and you can enjoy the same in your business, too. All it takes is a shift in how you think about new business.
Most business owners, freelancers and entrepreneurs focus on making new sales.

  • They invest their time, money and resources in marketing and pushing their brand message and sales messages out into the world.
  • They attend conferences and networking events to pass out business cards and collect business cards, and they often have a "quota" in mind for how many people they will talk to about their business.
  • They spend valuable resources on advertising, sponsoring events, and exhibiting at trade shows.

While this approach will help build your bottom line, it is a train that you have to keep feeding, as it is a never-ending, work-heavy, time-intensive, expensive approach to sales. It’s not the best way to build a sustainable business.

Instead, you need to shift your thinking to focus on providing your existing clients and customers with outrageously good, unbelievably helpful service.

Your focus needs to be on cultivating and nurturing relationships, and offering friendly support, advice and information.

When you approach your client and customer relationships as partnerships that are vital to your success, your clients and customers will feel valued, appreciated and special. And when that happens, they'll recommend and refer you to everyone they know.

Sustainable Business Fist BumpHow to get referrals and recommendations

The very first thing you must understand about referrals is the risk that is associated with giving a referral. When you make a referral, you're putting your own reputation and brand on the line.

  • If you give your friend a referral and they have a great experience, it makes you look good and they will be thankful for the referral.
  • If you give your friends a referral and they have a bad experience, it will make you look bad and they'll wonder why you made the referral in the first place.

Likewise, when someone else makes a referral to you or your business, they are putting their reputation and brand on the line. So the very first step to creating a sustainable business based on referrals is being referral-worthy.

You need to position yourself and your brand as credible, reliable, dependable and trustworthy. You need to build a reputation around unparalleled integrity, stellar customer service and extraordinary experiences.

Your reputation needs to be rock-solid so others know, without a doubt, that if they refer someone they care about to you, you'll take great care of them and make you both look good.

7 tips to create a sustainable business based on referrals

Once you have positioned your business and brand as being referral-worthy, it's time to take action and cultivate a network of referrals.

1. Get clarity and create an ideal client persona

When others aren't sure what you do best, who you can help the most, and what type of results your clients and customer enjoy, it is virtually impossible for them to refer someone to you.

As I mentioned, making referrals can be scary. When you make a referral, you want to know that it's a good one. You want to feel confident that your friends and family will get the best, get exactly what they are looking for, and get what they need — and you can't do that without the right information.

When you have clarity about what you do best, how you're different, why you're the best choice, and what big results you help others achieve, something magical happens: other people gain the same clarity.

When you know exactly who your ideal client is and have a written ideal client profile that you can share with the world, something magical happens: other people discover who would be a perfect fit for what you offer.

When your network, audience and peers know exactly who you are, what you do best, and who would be a perfect client or customer, it becomes very easy for them to identify potential referrals and send them your way.

Sustainable Business Client Personas2. Focus on your ideal clients

If you’re a business owner, freelancer or entrepreneur, chance are you're already very busy, so don't spread yourself too thin trying to be uber-amazing for every prospect you speak with. Instead focus on working with your ideal clients and serving them to the absolute best of your ability so you attract more of them.

It's also important to understand that in reality, not every client will be a perfect ideal client. While it's critical to provide every client and customer with a great experience, you must understand that 80-percent of your business will come from 20-percent of your clients and customers.

They key using data to discover who the 20 percent is. You can then provide every client and customer with great service, and the 20 percent with extraordinary service.

If you can do that, you'll find that your best clients will invest more with you, refer more of their network to you, and become brand evangelists for your company.

3. Build a rock-solid reputation

If you offer too many different services or do too many different things, people will get confused and they won’t know what to refer people to you for.
To make it easy to earn referrals from your network, you need to build a rock-solid brand reputation around the one thing you do best (and hopefully better than everyone else). I'm not saying you can only do one thing, but that your marketing and brand should focus on one thing.

For example: Bourn Creative, is a full-service design agency. We provide a wide range of graphic design, digital design, print design, logo design and web design services, as well as development services, development support, and website maintenance. While we are a full-service agency, all of our marketing and branding efforts are centered around the one thing we want to be known for: high-end, custom WordPress website design and development. This made it very easy for those in our network to send us referrals because they knew exactly what to send us referrals for.

4. Ask for referrals

You can't be afraid to ask for referrals.

Your happy clients and customer want to give them to you. In fact, they are usually thrilled to send referrals your way, they often just don’t know how to send them to you, or if you even need them.

Help others refer new business to you by simply asking them.

Reach out to your clients and customers, share your ideal client profile with them, and ask them if they know anyone who fits that description, who would benefit from working with you, or who is looking for the services you offer right now.

The best time to ask for a referral is right after someone has complimented your work or spoke highly of their experience with you and your business. If you’re speaking with a client on the phone and they’re raving about working with you or being in your program, take a moment to thank them and honor their praise. Then casually mention that you do have openings for new clients or you are looking to fill a new program. Then ask them if they know of anyone who may be a great fit or who may benefit from the same results they have experienced. You can use the same approach by email, too!

5. Send a referral letter

If you're not comfortable picking up the phone and asking for referrals, consider sending a referral letter to your best past and current clients, as well as any strategic partners. Think of it like one of those update letters you receive in Christmas cards — not the cheesy ones, but the good ones.

Update them on your business and your current service offerings, share your ideal client profile and who would be a perfect fit, and ask for referrals. Be sure to invite them to follow up with you if they have any questions or need anything themselves. If you have an affiliate program or offer referral rewards, mention them in the P.S. section!

Another great referral letter formula is to first share the biggest challenge your clients face, then share the solutions you offer and the big results your clients get, then invite recipients to share the love and refer their friends or family who may be a great fit.

6. Create referral partnerships

I'm sure you've heard the buzz online around creating multiple income streams. While much of it is hype and internet marketing malarkey, the principles can be applied to your business in the form of referral partnerships.

In addition to cultivating referrals one at a time through your clients and customers, it's also smart to create strategic referral partnerships with complementary businesses. One good referral partnership can create an entirely new income stream of clients and customers.

The best, most powerful and profitable referral partnerships are between service providers that serve the same market, offer complementary services, and operate with the same level of professionalism, integrity and expertise.

For example: A designer and a copywriter are perfect candidates to be referral partners. At some point the designer’s clients will need copywriting services and the copywriter’s' clients will need design services. With a referral partnership in place, each service provider knows exactly who to refer their clients to so they are practically guaranteed a seamless experience.

The key to a successful referral partnership is regular, open and honest communication.

Help your referral partners stay excited about referring others to you by staying in touch with them and keep them in the loop. Be sure they are the first to know about your new services, products, launches, sales and business changes. Create special referral opportunities and rewards and provide them with tools to make referring new people to you a breeze.

And when you receive a referral, reach out to the referral source and give them updates during the sales process, so they know you're taking care of those they send your way, even if they don't end up converting.

7. Say thank you

Sustainable Business Thank You

You don’t need to have an affiliate program to create a strong referral program, you just need to ensure your referral partners feel appreciated, acknowledged, valued and loved.

It might not seem like a big deal, but a simple “thank you” goes a long way. Be sure you thank your referral sources for every referral they send your way. You can send them a quick email, but emails are easily lost, deleted or ignored. Instead go the extra mile and give them a call, write them a handwritten note, or send flowers or a small gift as a token of your appreciation.

For example: My in-laws own S & J Mandarin Grove, an organic mandarin orchard in the world famous Placer County, Calif., foothills. Their orchard is one of only a few organic mandarin orchards and they ship all across the United States. As a token of our appreciation, my company Bourn Creative, sends hand-packed boxes of organic mandarins from our family farm to all of our clients and referral partners during the holidays. We have done it for so long that clients now look forward to it every year!

Getting started

Now I've just provided you with a wealth of knowledge and tips for building a sustainable business based on referrals, but I know that if you're going to take action, it needs to be easy. So here's a quick list of to-dos to help you take action right away:

  • Evaluate every touchpoint a prospect, client or customer has with your brand and business. If the experience doesn't position you as referral-worthy, give it an upgrade.
  • Get clear on exactly what you do best, how you're different, why you're the best choice, and what big results you help others achieve.
  • Get clear on exactly who your ideal client and create an ideal client profile that you can easily communicate and share with others.
  • Remember that 80-percent of your new business will come from 20-percent of your current clients and customers. Identify the 20 percent, provide everyone good service, and the 20 percent extraordinary service.
  • Build an undeniable, rock-solid reputation around the one thing you want to be known for and receive referrals for.
  • Ask your best clients and customer for referrals! They want to help but just may not know how to refer someone or whether you even need a referral.
  • Send a referral letter, updating your network on what's new with your business and what services you offer, share your ideal client profile, and ask for referrals or to be connected with anyone they know who may be interested.
  • Reach out to complementary service providers you trust and respect and create referral partnerships that allow you both to better serve your clients.
  • Say thank you and show your appreciation. Send an email, write a handwritten note, pick up the phone, send flowers, or send a small gift. It doesn't matter how you do it, just be sure you do it.

If you take action on the steps I have outlined, you too can enjoy the benefit of owning a sustainable, referral-based business and having new clients seek you out, instead of you seeking them out.