Why It’s Risky to Rely on Referrals in Business (& What to Do)

You’ve been running your service-based business for a while and have built a network of enthusiastic clients (go, you!). So, you know they’re always going to send their friends and peers your way. It’s a foolproof system, isn’t it?

Well, not really. 

Relying on referrals in business is a DANGEROUS “strategy”. And I used the inverted commas because… it’s not a strategy at all. It’s more of a crossing-your-fingers-and-hoping-for-the-best kind of decision.

Here’s why and, most importantly, what you should do instead to make your business more sustainable, grow it, and be in control.

What exactly do I mean by referrals in business?

By referrals in business, I simply mean word of mouth. A client you worked with recommends you to one of their friends or peers who’s looking for your types of services.

A LOT of service providers—from coaches to photographers and more—tend to rely on referrals in business.

So, you can be excused for thinking it’s a good idea. But here’s why it can backfire and sabotage your income, systems, and growth.

8 reasons why you should STOP relying on referrals in business

1. Referrals are unpredictable and outside your control 

Relying on referrals in business would be like trusting the sky to keep you dry during your daily walk instead of taking the matter in your own hands, like wearing a waterproof coat. Sure, it could be sunny all day… or it could rain like hell. 

YOU have ZERO control over that. And that’s the same with client referrals. 

You could end up being fully booked for months thanks to word of mouth. You never know when it’s going to die down, though. And if you RELY on referrals, you also have no idea where your next client is coming from and… if they’re coming at all!

2. Referred prospects are not necessarily your ideal clients 

Just because they were sent to you by a client who was the right fit, it doesn’t mean it’ll be the same for the actual referral.

Maybe this past client referred them to you because they’re friends and they know this prospect is a lovely person. But being a lovely person doesn’t automatically mean they’ll be a good client, too. Or a good client for your specific services, business, and preferences.

After all, you know next to nothing about them!

Are they experiencing the pain point you solve with your services? Do they share your values? Are they willing to trust your expertise? Have they got the right budget to work with you?

3. You’re starting from scratch 

Just like you know next to nothing about them, these prospects know next-to-nothing about you.

All these referred prospects know is that their friend or peer recommended you, and they probably have a vague idea of the services you offer. Usually, that’s about it.

They haven’t been consuming your content for a while and aren’t familiar with your brand and offer suite. This becomes an even BIGGER problem if you can’t send them to the clearest and strongest website copy!

So, in most cases, you have to start from scratch, over-explain things that your ideal clients would already be aware of, and win them over.

(= time and effort)

4. Client referrals often expect to bypass your process 

Hopefully, you don’t jump on free calls with EVERYONE who gets in touch, do you? When you are the business, it’s important to protect your time and energy.

Maybe you usually ask them some strategic questions via email or DM? Or you require all your prospects to complete a contact/application form so that you can pre-qualify them properly? 

Unfortunately, when they find out about you through someone else, many prospects seem to think they can just ignore your process.

“Hi, I think I might need a coach, and Julia mentioned you. Can we jump on Zoom to see if we’re the right fit?”

For example, a while ago, a lovely web designer tried to send a potential website copywriting client my way. For context: for that type of project, I always start with an application and, if I genuinely think we could be a good fit, a paid consultation. But this was part of the message I received:

While I appreciated that this web designer thought of me, this was a big NO. 

I have all kinds of free content answering those very questions. If someone isn’t happy to go through it and, instead, they expect me to use my limited time to educate them for free and maybe even share free value on a 1:1 basis and create a free proposal… we would NOT be the right fit. 

And personally, I’d rather miss out on that potential sale than bend over backwards to follow someone else’s lead (especially when my ideal clients are actually happy to pay for my time and expertise).

What about you? Do you really want to keep wasting hours on so many directionless free calls with random referrals?

If the answer is a loud “NO” or even an undecided “Mmh, now that you put it this way, it doesn’t sound very productive,” keep reading—especially the following point.

5. You have to take whatever comes your way  

If you rely on referrals in business, you can’t really afford to be picky.

After all, you don’t know when and where the next client will come from!

So, I wouldn’t be surprised if you often ignore red flags or your gut feeling just because you need that sale, regret it later, tell yourself “Never again!” and then… do the same with another client referral.

6. Referrals in business give you a false sense of security

You could easily find yourself being fully booked for months and thinking “This is fantastic! I don’t have to worry about finding new clients.”

But then those projects end, a couple of clients drop you, and still… no referrals have magically come through. But because you were expecting them, you didn’t market your business consistently over the previous months either.

So, what exactly are you going to do next?

Try and remove the cobwebs from the email list you neglected for a full quarter? Reappear on social media out of the blue with a post along the lines of “Remember me? I’m open to work, now!”? 

Err, good luck with that.

If you only show up for your audience when you need sales, it’s too late by then.

So, realistically, your solution would probably be spending hours on cold outreach to find new clients (and miss out on sales in the meantime).

7. Relying on referrals in business makes it hard to grow it

As seen before: if you have the capacity to take on new clients but you just keep waiting or leave it until it’s too late? You’ll miss out on sales and money.

Sure, client referrals can certainly keep you going for a while. But what if you want to do better than just ‘keep going’? What if you want to grow and thrive, not just get by or run a stagnant business?

Then, you must take full control of your lead generation (more on that soon!).

8. Client referrals are usually looking for “a”, not “THE” 

In most cases, a referred prospect was simply looking for A graphic designer, A business coach, A consultant, and so on.

In fact, I bet they literally asked your past client “Do you happen to know A graphic designer / A business coach / A consultant…?” And I doubt they only spoke about it with them. They probably asked around and got recommendations from a few more people.

So, when you start talking to this referred prospect, you’re usually competing against a bunch of business owners.

And because these prospects know next-to-nothing about you, they don’t usually see you as THE go-to solution. They’re not like those ideal clients who’ve been following you for a while and are beyond excited to work with YOU and you only!

So, you could waste your precious time on calls and proposals that lead to… tumbleweed.

So, are referrals in business bad?

No, not necessarily. Referrals in business can be good news. 

First of all, if you get many referrals, it means you’re doing a fabulous job and leaving your clients more satisfied than my morning oat latte. And of course, some types of referrals in business can turn into actual work.

So, I’m not denying the importance of referrals in business… to a certain extent. Overall, I’d say client referrals are bad in business when:

• You rely on them

• You haven’t got a strong strategy to pre-qualify them and boost your chances of turning them into clients (without wasting a tonne of time on random calls)

What to do instead of relying on referrals in business

Are you ready to leave all this effort and uncertainty behind and be in control of who you work with? 

Then start seeing client referrals as a nice to have—not a given or something you expect and rely on—and focus on the following.

Prioritise your marketing, even when you’re fully booked

This is one of the most common mistakes among service providers: only marketing your business when you need clients. But by then, as we’ve seen before, it’s too late.

Organic marketing is a long-term strategy, and it must be consistent for it to work.

This isn’t to say that you MUST show up daily if that wouldn’t be sustainable for you. But it is important to build your online presence and turn marketing into a proper habit (yes, even when you’re so busy that you couldn’t possibly take on any new clients).

Are you serious about taking control of your lead generation?

Then, you must keep creating content for your specific target audience, engaging with them, and nurturing your relationship. In other words, position yourself as the only logical next step and stay top of mind.

(More on that soon! For now, just get in the mindset of marketing your business regularly) 

Fine tune your brand messaging: become “THE”, not “a” 

Tired of wasting time on lots of discovery calls with people who’re looking around for A graphic designer, A business coach, A consultant, and so on? Then stop showing up as “just another option.” 

Position yourself as THE go-to solution in the eyes of a specific ideal client. That way, even with someone who’s only just found out about you (or that was sent your way by a friend or past client), you’ll set the right expectations FROM. THE. BEGINNING. How?

A strong brand message is key. It should be your solid foundation, and you can then amplify it through your content marketing.

Without that foundation, though? You’d be building your marketing on shaky pillars of sand.

(And that’s why, during my 🧲Magnetic Messaging & Marketing Strategy Day🧭, we start with the brand messaging side of things)

Take control of your lead generation

Stop expecting new prospects to come to you through unpredictable referrals in business. Start attracting them, instead.

There are so many options, but here’s a basic funnel idea:

• Make your website copy SEO-friendly, and blog on your website to attract your ideal audience through Google

• Show up on different platforms or channels, creating content and engaging with your ideal audience to attract them organically

• Have a lead magnet that solves a small problem for them

• Direct your social media followers and online audience to your lead magnet and newsletter, too

• Target them with an automated email sequence to turn some of them into clients

• Keep emailing the rest regularly, building trust and staying top of mind until they’re ready to invest in your services

Of course, it’s all about finding the right lead generation and marketing option for you and your audience. That’s one of the things we can cover during a 🧲Magnetic Messaging & Marketing Strategy Day🧭

Keep sharing magnetic content that attracts your ideal clients and puts off the wrong-fit prospects

Your marketing shouldn’t be all about yourself (sorry!) or just… shouting about your offers.

It should be built around your target audience. In fact, think of your content as a magnet!

It will:

• Attract your ideal clients

• Repel the wrong-fit prospects, saving even more of your time and energy (bye bye, endless discovery calls that lead to nothing)

• Bring you enquiries from prospects who are pretty much sold by the time they get in touch with you

For example:

• What are their pain points?

• How are they affecting them, specifically?

• What have they already tried to do to solve them?

• Why did it not work?

• Why are you the best possible person to help them?

• Who is and isn’t a good fit for your services?

• What’s stopping them from investing in you right now?

• How would their life/business change if they were to solve that problem with your help

and so on.

You probably guessed it by now, but… only ‘giving value’ and sharing how-to content and tips? That won’t cut the mustard either. If you want to attract your ideal clients instead of relying on unpredictable referrals in business, you must get strategic.

(During my 🧲Magnetic Messaging & Marketing Strategy Day🧭, we cover exactly what type of content you should focus on to turn this into your new reality)

Make your website copy clear and strategic

By now, you know that… jumping on a call with every Tom and Dick who were sent to you by Harry? That’d be so time-consuming and energy-intensive. 

Instead, direct new prospects and client referrals to your website, and let the latter do the heavy-lifting for you. That way, THEY will be able to tell if your services are what they’re actually looking for and if they can afford your prices. 

If that’s a yes, that’s great news.

If it’s a no, guess what? That’s great news, too! It’s much, much better to find this out straightaway than after spending hours talking to a referred prospect.

Plus, when you rely on strategic website copy, it’ll also help you:

• Attract more of your ideal audience through Google

• Take more of them from prospects to paying clients, generating leads for you even when you’re sleeping

Has your website copy not been doing that for you? You can change it with the 🧲Magnetic Message & Web Copy Makeover✨, my VIP offer combining brand messaging, SEO-friendly website copy, and frameworks to inform all your content marketing.

The most important things to keep in mind to run your service-based business more sustainably and thrive

Overall, if you want to get more clients, save time and make your life easier, you must focus on:

• Attracting your target audience

• Helping wrong-fit prospects disqualify themselves so that you don’t keep wasting a tonne of time with them

• Getting your ideal clients to see you as THE go-to solution 

The second and third point, in particular, must apply regardless of whether someone found you organically or through a referral.

And remember:

referrals in business should only be a nice-to-have, NOT something you rely on.

How I can help you attract your ideal clients without relying on referrals in business🧲

I’m Giada, the brand messaging strategist & copywriter for women entrepreneurs.

Specifically, those who provide the best services but can’t articulate it in a way that sets them apart and attracts their ideal clients (yet!).

Tired of relying on unpredictable referrals in business, time-consuming cold outreach, and lots of draining discovery calls with wrong-fit prospects?

Then, here’s how we can get your target audience to come to YOU.

🔸Magnetic Messaging Compass🧭 Get clarity & your bespoke brand messaging guide in 1 week. Follow it to attract clients who already want to work with YOU and you only

🔸🧲Magnetic Message & Web Copy Makeover✨ Brand messaging guide + website copy that actually sells for you

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