Yesterday, I took one of my friends sailing. Dan is another agency owner I’ve known for a long time. We’ve climbed mountains together, drank scotch together, and broke bread together. I really like the guy, enjoy his company, and want to see him do well.
In the 15 years we’ve known each other, I can’t remember ever referring Dan’s company. On his side, I know that he’s referred business to me just once.
Another local peer is Jim, who I really like, but rarely hang out with. I haven’t seen him in person in five or six years. I used to refer him all our overflow leads or leads that I didn’t think were a great fit. He made quite a bit of money off this arrangement.
In sum, no referrals for a good friend and many referrals for an acquaintance.
Dan has a complimentary business that should have received referrals from us, except that his positioning excludes the opportunities that have crossed my desk. He has an agency that only serves dentists in a standardized arrangement.
Jim was actually a direct competitor (was because things have changed.)
I think the way it started was that I told a lead we were too busy to take on their project and they said, “Well do you know anyone who could help us?” My response eventually became a templated email that I would reply with, “So sorry, we’re busy, try Jim.”
In a way, Jim was providing value to us by shortening those conversations and giving an option to people we wouldn’t help.
Referrals are to a large degree about situational fit. Jim worked because he filled our exact position and solved a problem for us. Dan is part of a different ecosystem that doesn’t need help from companies like mine or Jim’s.
Your customers buy goods and services from a network that serves businesses like theirs. How well you fill a distinct role of that network will determine the availability of referrals- both from customers and from other service providers.
Featured image is “The Round city of Baghdad.” Between 767 and 912 it was the most important urban node along the Silk Road. By William Muir and used under public domain.