Think back to high school. You can probably remember going home for the summer and coming back in September to discover that one of your “little” classmates suddenly sprouted by a full foot, going from 5 ft. nothing to 6 ft. He looked like he swallowed another kid or spent the summer eating steroids for breakfast.
In terms of expanding your business with appointment setting, that’s the kind of growth we are talking about. But why would you need that, you get lots of business from referrals.
Lots of businesses place a heavy focus on referrals, especially in niches like finacial consultation and financial services , real estate and other service business niches . And indeed, referrals are a powerful source of new business opportunities.
The recommendation from an existing or past client sets the stage for a successful new client dynamic. The prospect enters the first conversation with a certain degree of comfort and trust in the services you offer because someone they trust vouched for the quality of your work.
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.
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. 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.
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
Repeatable methodology integrated into a backend system that allows you to:
A well-organized and consistent drip marketing system
Personal one-on-one follow-up with prospects that goes beyond sending emails and flyers
Consistency outbound activity, in good times and bad
Greater consistency of activity and pipeline building efforts designed to lead to new business opportunities and sales.
Unfortunately, the realities of initiating new relationships stops businesses from continuing that diverse approach to lead generation once referrals start to come in. Finding new prospects is time-consuming, which can be hard to justify when you have a roster full of existing clients that need your attention, and the process of engaging cold leads can be frustrating and even at times, feel embarrassing.
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.
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. Even multi championship winning athletes like LeBron James are famous for spending many late nights pouring over game footage and early mornings shooting basket after basket.
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.
But what if you could skip the draining process of prospecting and 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 actually 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 reference 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.
Ultimately, the growth of your business 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 rest of your career, 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. Think beyond referrals. Grow your business with a well-rounded sales pipeline and make appointment setting a part of that.