Last fall, Philip Morgan recommended to me, “Why Clients Buy” as part of my investigation into referral focused strategies (thanks Philip!) A thesis of that book is that for client work, you only need around 200 possible clients to know you. It’s a relatively small number of people (with the caveat that the number is based on income per client.)

From my research on agency channels, a little less than 1 in 3 referrals came from colleagues and peers, people who would probably compose much of that group of 200 people from “Why Clients Buy.”

I’m in the early phases of implementing a referral strategy and how I’m thinking about this is networks. Every person is a node in a network that connects to a certain number of other nodes. For a client serving business, you need 200 that have some sort of link to you, either directly or within one connection. As in, they know you, or when they ask for a referral, someone they’re connected to knows you.

People are not equal (sorry founding fathers, you got it wrong.) We don’t have the same abilities. As it pertains to networks, not all nodes are equally valuable.

Due to this, as strategic priorities, in building a referral network, I’m looking at building relationships with three kinds of people:

1) Other suppliers. Especially potential partners and including competitors. These nodes have a higher number of connections to your possible customers than the average person in a network.

2) Chatty Kathies. Clients in the market who love to engage and invariably form an unusual number of relationships. Look for these folks at the community watering hole in a leadership or support position.

3) Leaders. People who are on the forward edge of the market proposing solutions and sharing them with others. Because they provide solutions, people bring them problems and often those problems are solved by a referral.

The question is:

How do these people impact the 200 people who should know you?

If a Chatty Kathy is connected to 100 possible clients (one connection away), do you only need to build a relationship with two Chatty Kathies?

Maybe. I don’t know. I suspect that it’s rarely that clean.

But I can tell you that it’s possible.

I know because I’ve seen it happen several times with myself and my friends where we’ve referred hundreds of thousands of dollars of work away to competitors we knew and liked because we weren’t interested in working with a client.

It’s a working theory, similar to the 200 clients number that “Why Clients Buy” proposed. What’s useful about developing a working theory is that it frames your experience in a way that can be evaluated. This leads to learning.

What’s your theory about how best to acquire new customers in your market?


Featured image is a baroque drawing of the constellation Orion from Johannes Hevelius’ star atlas Firmamentum Sobiescianum, showing the stars as they would appear to an observer looking down upon the imaginary celestial sphere from the outside. Used under public domain.