I regularly meet with prospects and help them understand how much business they are getting from their network and what is being left behind. It’s a very enlightening exercise and students are always dismayed to learn how little they are actually tapping into thier network.
How about you, do you know your referral percentage? No? Don’t worry, most people don’t know and have never given it much thought. So, grab a pencil and a calculator and I will help you find your referral percentage, here we go.
1. List 4 people in your network (not clients) who have passed you the most business by referral this year. For instance Tom, Sue, Bill, Kim.
2. Now, for each person write the number of referrals they have passed you in the last 12 months. For our example, Tom=4, Sue=12, Bill=5 and Kim=8
3. Think about each of those people, how many people do you believe each of them know? On average, we each know about 250 people. So, Tom=300, Sue=500, Bill=800 and Kim=200
4. Next step, add all of the referrals you have received together, in our example it would be 29, next add all of the people your network knows together. In our example, it would be 1800.
5. Last step, you will need your calculator to complete the process, divde the number of referrals you have recieved by the number of people in their networks. For our example, 29 referrals divided by 1800 equals .016%
What is your referral percentage? Are you surprised? Did you have 4 referral sources? The very first time I did this exercise I got .010 and I was speechless as many of my students are when they are taken through this exercise.
So let me ask you the most important question; what are you going to do to change this percentage? What steps can you take to develop a higher referral percentage?
Hint: Stop adding people to your network! Most of us already know everyone we need to know to make a wonderful living. If we just learn to develop our relationships and put a system in place that supports both ourselves and our network we would see an increase in our results.
Start with the 4 people you listed here and if you did not have four then work on the ones you have. When you are sure that you have developed that relationship, then move on to create a new one, until your have your “Four”. Manage the 4-6 closest relationships and you will raise your referral percentage.
If you would like a system for generating a consistently higher percentage take a look at the ebook on this website, 26 Strategies for Generating Referrals.