Think back to secondary school. You can probably recall going home for the summer and returning in September to find out that one of your “little” classmates unexpectedly sprouted a full foot, going from 5 ft. nothing to 6 ft.something. In six weeks. It looked as if they had swallowed some other kid or spent the summer eating steroids for breakfast.
That’s the kind of growth we’re talking about is more than possible in terms of expanding your company with a successful appointment setting campaign. But, when you get lots of business from referrals, why would you need that?
Many companies, especially in niches such as financial consultation and financial consulting, real estate and other service sector niches, place a strong emphasis on referrals. And yes, a good source of new business prospects is referrals, there’s no argument there.
The suggestion from a current or past client that a prospect seeks you out specifically sets the stage for a new client dynamic that is fated to be more successful. With a certain degree of comfort and trust in the services you provide, the prospect joins the first discussion feeling far more confident in what’s on offer because someone they trust vouches for the quality of your work/product/service.
It’s easier for you as well. You’ll still go through the formalities of introducing yourself and the services you offer, but you get to skip the sometimes difficult process of taking a cold lead and initiating a completely new relationship. You also have someone who can ‘vouch for you’ and is likely to have already at least commented to the prospect about the value on the table (whatever that may be)
In terms of generating new business, referrals are an essential piece of a profitable, well-rounded sales pipeline. Too many people, however, come to rely exclusively on referrals for growing their businesses.
THE RISKS OF RELYING ON REFERRALS
Relying on referrals is easy. Doing so seems to make sense. The rewards are reasonable and the sales process is less demanding. You do OK, well even. The business remains on an even keel, even now, in the strangest of times. However, what separates the good from the great is an aggressive approach to initiating new business relationships in areas that are not necessarily natural or comfortable.
If your sales pipeline is filled almost entirely by referrals, you are taking the following risks:
- Referral activity is often very inconsistent, creating long periods of stagnation.
- Referrals are not a reliable way to capture or expand into new markets.
- Even in the best of times, referral activity is inconsistent and is largely driven by the total sum of your other marketing and brand development efforts. 2021 was not the best of times. Which in why in 2023 relying solely on referrals for growth is a riskier business than ever.
Instead, your sales pipeline should be comprised of referrals as well as efforts that specifically target completely new audiences or markets. You could explore a new market locally, or you could expand into a new region.
By initiating these new relationships, you increase your potential for referrals exponentially, and you give yourself greater control over the growth of your business.
A sales pipeline that mixes referrals with other sources of new relationships will usually contain the following pieces:
- Appointments with potential prospects
- Referrals from existing clients
- Relationships with key centers of influence
- A well-organized and consistent drip marketing system
- Personal one-on-one follow-up with prospects that goes beyond sending emails and flyers
- Consistent outbound activity, in good times and bad
WHY COMPANIES AVOID CHASING NEW BUSINESS
Unfortunately, as referrals begin to come in, the realities of initiating new relationships deter organizations from taking – or continuing – a more complex approach to lead generation.
It takes time to identify potential clients, which can be difficult to justify if you have a roster full of current customers who need your attention, and the cold lead engagement process can be frustrating and even occasionally humiliating.
The current pandemic is making things even harder for some salespeople. Sales in general is very different when it’s being conducted in a socially distant – usually remote – way, adding enough of a new learning curve to tackle without taking on anything else (like looking for new cold leads) Referrals are easier, and, let’s face it, we all prfer easier.
An old saying goes that if you are not moving forward, you are moving backward. Even in the face of success, resting on your laurels can undermine the potential of your future.
Apple, despite its explosive growth, continues to innovate and challenges its employees to behave like entrepreneurs—even going as far as to call them intrepreneurs – entrepreneurs working within an existing company. One of the biggest companies in the world, and yet they STILL actively seek growth and new business.
In another example, GE, an international giant with its hands in everything from household appliances to x-ray technology, continues to invest in new technology and in new markets.
These are just two examples of a very old business truth. The most successful companies and individuals are successful because they never stop growing. They never stop trying to achieve.
Is finding new prospects to generate new business the best use of your time? Is it your best skill? Many business owners, if being honest, will answer no. In fact, more than 40% say prospecting is the most challenging part of the sales process, followed by closing (36%) and qualifying (22%).
Many will also admit to strongly disliking the cold lead generation process in general, so they come to rely entirely on entirely referrals because of that. That’s fair, as cold lead generation is not easy, but shying away from its growth potential because of that is a real shame.
But what if you could skip the draining process of lead prospecting and cold lead generation meet only with potential customers that fit your target criteria and are interested in the services that you offer? That’s the power of an appointment setting program.
With an appointment setting program, you can:
- Grow your business without the front-end investment of time.
- Reap the benefits of new relationships without having to initiate them.
- Capture new opportunities in new markets.
- Fill your pipeline with a steady stream of activity.
- Tap into a new wave of referrals.
That all sounds great, but here is how these benefits translate into actual results: Typically, those working with experienced appointment setters see closing ratios of 40-50 percent for their met appointments. To those used to the high success rate of referrals—usually upward of 70 or 80 percent— a 20 percent success ratio might seem low, but within the context of completely new relationships it is actually quite high.
Let’s say that your appointment setters set 60 appointments. You meet with 40 of them, who you find to be highly qualified. You then close 24. 40%. How much are 24 sales going to net you? The tactics work for smaller companies too, as Pearl Lemon Leads have demonstrated in the past.
That however is the base return. It does not account for the potential return that you could see from sales that take longer to mature—nurtured by slow drip marketing and follow-up efforts—and it does not account for the return that you will see in the future when those clients refer you to new business. In this way, appointment setting builds a pipeline for sales and referrals.
To refer back to our outline for a well-rounded sales pipeline, this influx of sales and referrals will feed your slow drip marketing system, giving you a consistent flow of new prospects to engage, in turn making your one-on-one follow-up activities more targeted and more fruitful.
This is especially important right now. Due to the business changes the pandemic is bringing about right now some qualified prospects may be unsure, or unable, to buy right now. But simply by getting them into the sales funnel, and then staying in touch via things like drip marketing, you’ll be top of mind when they can.
Ultimately, the future and sustained growth of your business – whatever that may be – depends on you and your willingness to challenge your own status quo. You might be able to comfortably get-by on referrals alone for the years, but you risk missing opportunities that more aggressive competitors will capture first and you risk hitting a slump in sales when your pipeline—powered solely by referrals—hits a lull.
The worst risk of all: you may never tap into your business’ full potential. It’s time to think beyond referrals, without discounting them as a valid form of business growth. Grow your business with a well-rounded sales pipeline and make appointment setting a part of that.
Not sure where to get started with a more efficient appointment setting plan? Need help finding those great top of the funnel salespeople who embrace cold contact and aren’t put off by it all? We can help. Get in touch today to discuss what Pearl Lemon Lead’s team of experienced appointment setters can do for you and your business.