Do you know that relying on referrals and recommendations is silently killing your consultancy’s growth?
If you’re anything like me you will be proud that you’ve built your consultancy business on referrals and recommendations. It is a great sign that you’re doing a fantastic job. But what I didn’t realise for a long time was that solely relying on referrals and recommendations was silently killing the growth of my consultancy!
I’m Stephen Bavister, the founder of LexisClick - We are business growth specialists for owner-managed consultancies. We help consultancy owners to build predictable new business pipelines and enable them to scale their consultancies.
I am sure you have experienced feast and famine cycles. I used to experience those cycles regularly. The feast periods when you’re working all hours just to keep up with the volume of work, and you’ve got zero bandwidth or time for marketing and business development. Then the work finishes, and you have to network like crazy to bring in some new business so that you can pay all the bills and salaries without going into the red.
I found that riding the feast and famine roller coaster was super stressful. I wanted a predictable pipeline, but the feast and famine cycle made it really tough to deliver.
Have you experienced that roller coaster ride too? Are you experiencing that roller coaster ride?
What I didn’t realise, and I have (also) found that many consultancy owners also don’t realise, is that their reliance on referrals and recommendations is actually making that roller coaster ride even wilder.
Why? Because relying on referrals and recommendations is hiding a much deeper problem.
It’s hiding the trust gap that you need to cross to win business from cold customers.
So what is the trust gap?
Let’s start with a concept called “The Attention Spectrum”.
On the Y axis of the spectrum, you have attention from low to high. On the X axis of the spectrum, you have trust, which ranges from high to low.
What you have on the left-hand side of the spectrum is the people who have high trust in you. Your Mum, Dad, friends, relatives, and your long-term customers. The people who will spend two hours listening to your crazy ideas and giving you feedback on them. On this left side of the spectrum, you also have the people who just get what you’re doing with barely any explanation. The Early Adopters.
This left-hand side for most consultancy businesses represents an absolute maximum of 15% of the market. It’s much more likely to be a tiny fraction of that - probably less than 1% of the market for most consultancy owners.
Over on the right-hand side, you have all the people who don’t know you at all and have no existing trust in you. This is where the majority of your market sits and represents somewhere between 85% and 99.9% of the market for many consultancies.
In the middle of the two is the trust gap. If you are really serious about growing and ideally scaling your consultancy, you have to bridge this trust gap and start winning customers over on the right-hand side of the spectrum.
So, why is relying on referrals and recommendations invisibly killing your growth?
Well - when you get a referral or recommendation, they are firmly sitting on the left-hand side of the spectrum. Even if you have a crappy website and no marketing message to attract them, if someone has been referred to you by someone they trust, they’ll give you their time. They’ll probably happily spend an hour or two with you to build a relationship and develop even more trust. Unless you really drop the ball, you’ll make a sale and probably have a customer for life.
The trouble is the more you rely on referrals, the bigger you are making that trust gap. I’ve seen it even go as far as consultancy owners thinking that they don’t need to invest in marketing because they get all of their business through referrals and recommendations.
As soon as they think that, they’re making the trust gap even bigger still, and they’re seriously limiting the potential growth of their consultancy.
If you’re truly committed to growing your consultancy, you need to cross this trust gap because referrals and recommendations can only get you so far. And you have to be fit for growth to cross that gap.
Working on attracting non-referred customers gets you fit for growth, and it also fuels future referrals.
The three fits of working to attract non-referred customers are
- Message-market fit
- Product-market fit
- Getting sales fit
Combining these three fits makes you fit for growth and fuel your future referrals.
Compare this with relying on referrals and recommendations alone, that silently kill your growth as you stay unfit for growth because you don’t work on any of these three areas.
Just like when you’re getting fit, in the beginning, it can be frustratingly difficult to achieve your goals. But the fitter you get, the easier it gets.
The best place to start is by defining a niche audience to target and working to get message-market fit with that audience.
To help you with this, my team and I have put together a FREE lead generation planning work pack for consultancies just like yours that will help you to define your niche audience and build your message. Getting these in place will help you bridge the trust gap faster and start attracting those all-important non-referred customers.
If you’ve found this blog post useful, please like it, share your thoughts and questions on it in social - the best place to get in touch with us is via LinkedIn, but you can also find us in the other usual places.
Remember that your consultancy solves a highly valuable problem for your ideal customers. Just imagine the difference that you can make when you are solving that problem at scale for many more ideal customers than you are today.
I hope this blog has helped you understand why relying on referrals and recommendations is silently killing the growth of your consultancy, the value of non-referred customers and the trust gap that you need to cross to build a predictable pipeline of new business to banish the feast and famine cycles for good.