BECAUSE IT PAYS WELL!
By Mike Macedonio & Vince Vigneri
“Truth or Delusion? Unlike cold-calling, the referral process is difficult to measure. Delusion!
“We know this because we’ve designed a networking scorecard for tracking referrals and the business that results from them. On this card you record the nature and source of each referral, how you followed up on it, how you handled it, how you conducted your networking activities—Did you provide your referral source or contact an article of interest? A thank-you note? A phone call? Lunch? Business?—and the end result of these activities. It’s not that hard to analyze what you did and how successful you were in getting business from your referrals.*
“The referral process is about committing to a series of actions designed to create a result, both for you and for the other people involved, and then measuring it and improving the system. As long as you track your activities, it’s not that hard to measure the results.”
(See bottom of page)
The key to tracking the referral process lies in knowing what to measure. An effective referral marketing plan should be measured in 3 categories.
- networking activities
- referrals given and received
- closed business
When you do not track the referral process, the lag time between participating in networking activities, getting referrals, and ultimately closing the resulting business inevitably creates a significant challenge. Without tracking the system, you cannot pinpoint which of your networking activities have led to the referrals which end up resulting in new business for you.
Now that we understand why tracking the referral process is important, let’s look at some examples of networking activities and see how we can measure this first category in order to evaluate our referral process. Actions such as sending an article of interest or a thank you note, giving a referral, and meeting for lunch are all great examples of networking activities. To measure the effectiveness of these activities, we can use a tool called a networking scorecard which is discussed in the book Business by Referral by Dr. Ivan Misner and Robert Davis. The networking scorecard allows you to plan your networking activities, track them, and then measure their effectiveness through a weekly point scale.
As you fill out your weekly networking scorecard, it is important to keep in mind that participation in networking activities does not often produce immediate results. In most cases these activities will take weeks, even months of lag time before they start producing
* Excerpted from Truth or Delusion? Busting Networking’s Biggest Myths
referrals and closed business—which is precisely why it’s important to
track the process. (TIP #1—In order to stay engaged in the process; reward yourself as you hit certain networking scorecard point benchmarks.)
The second category which must be measured in the tracking process is the referrals that are given and received. Measuring this activity allows us to manage each referral and to follow up with the referred prospects, as well as with those who have referred us. (TIP #2—Our biggest opportunity in tracking this category is the ability to provide recognition to our referral sources and to ensure that we are not just takers in the referral process.)
The final category to track is the closed business that results from our networking activities and the referrals that we receive. Along with tracking our results, we are able to tie back to who is referring us the business, and what activities have been most profitable in producing business. When we track our closed business, we begin to see where our time is spent in order to produce the different results. But be forewarned that though many people tend to slow down their networking activities when they start producing results and getting more business, this is a big mistake. Even though you may be receiving business, do not fall victim to a false sense of security as you cannot disregard the lag time between participating in networking activities and closing business.
Simply taking the time to implement a basic, easily carried out tracking system such as this can help you to realize a very successful referral process. Here is one such success story. A professional business trainer in six months ago began scoring and tracking weekly activities on a networking scorecard. The first week began rather low with only 82 points. Over the next several weeks, by deliberately planning activities and tracking them, points began to surpass 100, then 200, and now consistently over 400 points a week. At the same time, while measuring the referrals given and received, the trainer was ultimately able to measure the business that was closed from those referrals.
To evidence the success at tracking referrals, let’s look at what the monthly averages look like after only 6 months of implementing a referral process tracking system. Networking activities are scoring over 400 points per week, and on average giving 27 referrals a month, and receiving 9 referrals plus 3 speaking engagements a month. As a result of referrals, closed of over $11,000 in referred business for in the last month. (TIP # 3—Consistent tracking will provide you with an accurate return on networking investment, the value of a referred appointment, and who are your most profitable referral relationships. Budgeting your time with the right activities and the right people will then become a networking art and a science.)
Though this way of tracking your referral process is an excellent one, it is not the only way to track. One question that I am commonly asked is:
“OK, I get it, I need to track my referral process, but what do I track it with?”
My answer to that question is: WHATEVER METHOD YOU WILL ACTUALLY USE!
We have participants that are tracking their referral process on copied pages from Business by Referral, others who have created their own spreadsheets, and still others using even more sophisticated tracking systems such as Relate2Profit, Act, or Goldmine.
What you measure you will attain!