- Your Network is Unlimited. As you begin to build relationships with powerful referral sources and you get your clients to refer you, the network continues to grow with no end in sight.
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Higher Quality Clients. Since Mercedes’ clients seek out a referral, you get higher quality clients just from being “referral based.” Referred clients usually don’t even ask about the price. They are more concerned about quality than price.
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Pre-Qualified Clients. By educating your referral sources, your prospective clients will be pre-qualified; therefore they will already know more about you (and that you charge more than the commodity or service level company).
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People Trust Referrals. Wouldn’t you agree that referrals already have a level of trust for you? Sure they do. They trust you because the person they trust knows you.
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Reduces Competition. With referral marketing, you are no longer fighting for the best ad placement or getting copied. Relation- ships are hard to duplicate.
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Low Cost. With the right referral marketing system, you won’t spend money on expensive advertising. The cost is very low for referral marketing. Even with a Referral Reward Program (which I highly recommend), the cost is still extremely low compared to most advertising.
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High Returns. The returns can potentially be huge. In many industries a 4 to 1 return on investment on advertising dollars would be outstanding. In other words, if you invested $1,000 in advertising, you would get an average of $4,000 in return. With referral marketing, if you pay a 10 percent referral reward and everyone cashed in on it, you would have a 10-to-1 return. In my reward program, I get a 20-to-1 return as less than half of the certificates are ever redeemed.
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Returns Guaranteed. With a referral reward, you don’t pay it until after the product or service is paid for. With traditional advertising, you put your money on the line and hope for a return.
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Small-Time Investment. The biggest objection I get to referral marketing is “time.” See #10 to overcome that challenge.
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Exponential Multiplication! Would you be interested in how investing just a few minutes a day doing something really fun would give you a return of over $10,000 in new business each and every month after six months? Of course you would. Even though I can’t guarantee it, I have seen it happen many times.
Here’s what I discovered with referral marketing (see chart).
If you invested just thirty minutes per day calling on powerful referral sources (companies that are in a position to refer you on a regular basis), do you think it’s possible to generate just $1,500 in new referrals in a one-month period? See the first column on the chart. Not too difficult for most small businesses.
What I discovered about referral marketing is that once you win the confidence of a referral source, they will continue the habit of referring you (the light column), unless you give them a reason not to. You will then continue to develop new referral sources each month to the tune of $1,500 each month.
All told, at the end of six months, you would be at over $10,000 per month in new referred business! The total monthly income in new business is demonstrated by the second darker column.
This is how I built my first company from the trunk of my car to a multimillion dollar enterprise. I still use this method today. This is how I built a phenomenal training business and the reason you are holding this book in your hand right now. And it’s the same method I have taught countless small business owners around the world. They are having record sales and profits because of it. Finally, it will work for you too if you understand it and apply it.
