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Know who your best source of referrals is

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This article is part of the series 28 Business Networking Strategies.

As a general rule of thumb, 80% of your referrals will come from 20% of your business network. The reason behind this phenomenon is the sale chain.

All business owners are part of a sales chain. That is, the product or service they provide comes after an earlier supplier in the chain. For example...

  1. A half of a couple decides to propose. S/he books a restaurant
  2. The other half accepts. The couple are now engaged
  3. They buy engagement ring(s)
  4. They employ a wedding planner
  5. They book a church
  6. They hire a celebrant
  7. They buy a wedding and several bridesmaids' dresses
  8. They hire suits
  9. They employ a florist
  10. They hire a photographer
  11. They hire a videographer
  12. They book a reception venue
  13. They hire a caterer
  14. They book wedding reception entertainment
  15. They book a honey moon

The chain may not always involve all of these steps, and couples may do things in different orders. Never the less, at least some of these services will appear in every wedding sale.

If you sell a wedding service, it's highly likely at least one of the providers in this chain will be an excellent source of referrals for you.

Even if you're first in the chain (e.g. Jeweller), there is still a service provider who meets the client before you do. In this case, a restaurateur has the opportunity to meet newly engaged couples and refer them to you. Ministers, priests and counsellors may also meet couples before they get engaged.

You may already know who your best referral sources are. If you don't, I suggest you create your own sales chain (i.e. a version of the above list appropriate to your industry). You can then work out who gets to meet your target clients before you do.

Once you know who your most likely referral sources are, take a look at strategy #4 in this series. It explains how to meet the people who will become your best source of referrals.

Compiled by Wayne Davies – creator of the DIY SEO Seminar.