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Yes, I admit it. That is totally, 100% a Star Wars reference. However, there really is a dark side to referrals, especially as you become more successful.
Short answer: Time is more and more precious as you grow your business AND try to have a life worth all that effort to create income and value. Most people are not worth as much time as you might think in a predictable referral process.
One of the greatest examples of this ‘dark side’ coming into play is in the area of Centers of Influence (COI’s). Quite simply, after 30 years of coaching and consulting with some of the best in the industry…I no longer call a professional a COI until after they do a referral introduction. Note: they don’t have to create a sale to become a COI, they just need to successfully use their ‘influence’ on my behalf.
Another problem with COI’s is that we in the financial service industry falsely limit the group to other professionals like attorneys and accountants. What a massive error.
Would you agree that a client that has referred you is using their influence to benefit you? In my book, they are the best kind of COI possible because they not only are introducing you…they possess the ultimate ‘trump’ card in that they can answer the "why should I meet with them” question better than anyone else since they are a client.
Where you move into the ‘light’ when it comes to referrals is when you start getting business owners as clients. They not only can be very profitable…they also have a client base of their own and can potentially refer you at scale.
How to make sense of this and what is a practical execution strategy?
- Focus on continually recruiting potential COI’s from within and without your client base. Refer to an earlier blog of mine about ESP (Expert Service Providers) and interview them frequently until you have a 3 deep bench in all critical categories.
- Look into ‘unique’ types of referral sources like pastors and other influential members of your local community. They are not only connected to a lot of people locally, many of them have national networks as well.
- Work macro strategies on your larger network and go deep with micro strategies with your best clients and COI’s.
I am going to end with this great quote I have used so many times from my first great business coach Dick Herron from Rhode Island: “You can’t eat potential”
The key with referrals is being able to blend enough activity with the right people. You need to find and test ways of working both widely and deeply if you want to experience the power of referrals in your bank and your life. Don’t spread yourself too thin trying to work with people that don’t return your interest…that is when you are working in the ‘dark side of referrals’.
Related: Why CEOs Joining Peer Advisor Councils Boosts Growth and Exit Multiples