Relying on referrals for customer acquisition? You're screwed

4 minutes read
Adam - 19.04.2020


Why you need sales enablement content and outreach to build a healthy prospect pipeline

Referrals are often seen as the pinnacle of customer acquisition.

And why wouldn't it be?

Winning new business through a recommendation from an existing customer is not only validation of the work you're doing (an unhappy customer isn't going to recommend you to someone else are they because now their reputation is tied to your performance) but it's also way cheaper than investing in marketing and sales.

But becoming too reliant on referrals (or basing your entire sales strategy on them) is a huge, unsustainable mistake for your business and is a sure fire way to drop you in a world of trouble down the line.

In this blog, we take a look at why referrals need to be part of a wider sales enablement and marketing outreach strategy to maintain a healthy lead pipeline and generate consistent revenue for your business.


The problems with relying on customer referrals

Don't get us wrong, we entirely believe that customer referrals are a good thing and we've won a fair share of our own new business through referrals.

But they do have a few downsides if you put too much weight behind them.

1. They're usually sector specific - This isn't necessarily a problem, especially if you specialise in a certain area, but industries tend to operate in their own bubble so it makes sense that referrals (for the most part) will be made within that bubble. Relying on this is seriously limiting for your business and you're potentially missing out on thousands of other customers in other sectors that would be a great fit.

2. You have to work really, really hard to get them - Working hard for your customers? Of course you are, or should be. But when you're relying on those customers to recommend you to other people it's easy to fall into the trap of saying yes to every request and get into a toxic cycle of over-servicing. There's nothing wrong with sometimes going "the extra mile" for customers, but when you're consistently over-servicing customers you have it hampers your ability to go and get new ones.

3. You can only get so many - Yes, referred customers are more likely to convert and have a higher lifetime value for your company, which is why when they come along you should snap them up. But in reality, your current customers can only refer you to so many companies who can actually benefit from what you do. And referred customers can only introduce you to a finite number of other people etc etc

4. Will businesses introduce you to the competition? - When a customer comes to you it's because they are looking for a service that you offer which they think they can use to get ahead of their competition. If you're doing a good job for them, are they really going to refer you to a potential competitor? Maybe, but the chances are slim. 

Using sales enablement for consistent customer acquisition

Like we've said, getting business from referrals is a great position to be in and definitely shows that you're doing something right.

But it should also only play a part in business development and should sit alongside a sales enablement strategy and video for sales outreach plan to engage more prospects.

Sales enablement might sound like one of those marketing buzzwords, and you wouldn't be completely wrong for thinking so, but at its core, sales enablement is simply the process of using marketing to create content that your sales team can use to connect with and educate prospects.

For instance, if your sales team is constantly being asked about how to integrate CRM software into their business, an in-depth guide on developing a CRM strategy with information on integrations should be a focus for marketing to create content about.

We outline how to create a sales transformation strategy in this blog.

With a stack of useful content answering questions that prospects are asking, your sales team can reach out to leads and engage them in an effective way, rather than relying on cold calls or emails, intrusive LinkedIn messages or waiting for referrals to come in the door.

Using sales enablement content in other ways, like creating videos for sales, is another effective way of branching out beyond the referral bubble and (because video is still a bit of novelty in sales) make you stand out from the rest of the crowd.

Case Studies, while not exactly the definition of referrals, should also form part of your sales enablement content strategy as they prove to prospects that you can operate in their industry.

Ultimately, if you want to create a healthy sales pipeline and generate consistent revenue you need ensure you are not becoming overly reliant on customer acquisition through referrals alone.

Creating a sales enablement plan and using referrals at the tail end of the sales process as "social proof" that you offer benefits to clients in a particular sector will put you in a much better position.

Here's three more reasons you might be killing sales conversion.


Want more information on creating a sales enablement strategy. Download our guide to sales enablement here:

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