“Referrals and Repeat Business” is Not a Sales Strategy

One of the things I see frequently in entrepreneurs is a fear of sales, especially from smaller, service-based businesses. 

They’re not sure where to start. They don’t know exactly where their customers are. They don’t want to sound “too salesy.” 

I spoke with someone who didn’t want to do any outbound marketing because they didn’t want to seem self-serving or sleazy. 

For a while, businesses like this may be able to bootstrap on friends and family, word-of-mouth referrals and lots of networking. In the early days, it’s often necessary. The problem is that it doesn’t scale. 

What you’re missing when you don’t have a sales strategy

When that’s your only strategy, you’re going to have a lot of gaps. 

Dedication and commitment 

If you get business solely through networking and referrals, you don’t have anyone dedicated to ensuring that your revenue targets are met. You may not even have revenue targets. 

I’ve spoken with a lot of founders who haven’t hired a salesperson because they think someone else couldn’t be as successful with sales as they are with their networking. After all, you’re the expert on your company and its offerings. 

If that’s your thinking, it’s holding you back. An entrepreneur in one of my peer groups shared that he was hiring a salesperson. He was going to set low sales expectations because this new hire wouldn’t be able to sell as well as him. 

One of his peers chimed in with a question about how much time this entrepreneur spent selling every week. As you might expect, he spent some time selling — certainly not most of his time.

The peer was perplexed. So you’re going to bring in someone who has a career in sales and is focused on it 100%, and they’re not going to do as well as you? They should be outperforming you. If they’re not, then you hired the wrong person. 

The entrepreneur saw his peer’s point, and he’s applied that thinking to every hire he’s made since. 

As an entrepreneur, you have a lot of jobs. The right dedicated salesperson will always outperform you.

Reproducibility and predictability 

If you want to scale your business, you need to know where your next sale is coming from and how big it will be. You need to know how to reproduce the good sales you’ve made. You need to be confident that if you put in X, you get out Y. 

Prior to the pandemic, I had a LinkedIn strategy that was working really well to generate opportunities for Trajectify. I knew I could convert one out of every 125 interactions. 

The pandemic blew that up. It doesn’t work anymore. It was reproducible but not sustainable in a pandemic. LinkedIn got too noisy. So back to the drawing board I went.

If we can reproduce something, we can predict the outcome. If we can predict, then we can set realistic goals and plan for the future of our businesses. 

Systems and processes

Most of the founders I’ve seen relying on referrals and networking for their business don’t have a way of tracking their progress or forecasting their results. 

There may be no consistency to their efforts. Opportunities fall through the cracks. There’s often no transparency because they haven’t written anything down. 

If they want to sit down and forecast their revenue for the next quarter, they don’t have anything to base their predictions on.

Even those who have developed a system don’t always follow it. Information must be recorded, assumptions must be validated and updated, reminders and notifications must be acted upon. A system or process without adherence is nothing more than a useless distraction.

Brands and marketing assets

When referrals and repeat business are your sales strategy, you’re less likely to invest in brand development. You’re investing in relationships instead. 

Relationships are important. So is your brand. And your ability to market that brand.

While measuring the ROI on brand can sometimes be challenging, brand development focus has something of a halo effect. You reap a lot of benefits — clarity about who you are, what you do, and why you exist and a magnification of your message.

Having a clear brand communicates to your internal team so that everyone’s on the same page. And just like it can help you sell to prospects, it can help you sell to prospective employees.

Ultimately, having a dialed-in brand helps you generate leads and build your sales funnel. 

How to fill your sales gaps 

Once you see the places where your lack of a sales focus is holding you back, you want to remedy the situation.

So what next? For every gap you have, there’s a solution.

No dedicated sales focus

Hire an experienced salesperson that can fully commit to making the sales you need. They’ll spend the time you don’t have. They’ll create a system that’s measurable and reproducible. 

Not ready or able to hire a salesperson?

Get creative. Partner with another organization that has complementary offerings and train their salesforce to sell your product as well.

If you’re determined to do it on your own, time block your schedule to make sure you’re committing a certain amount of time each week to sales. If you don’t even know where to start, hire a sales coach, take a training program, or invest in a proven sales system.

No reproducibility

It’s time to be a little more scientific about where you find your prospects and the process you use to turn them into clients. 

You need to define your funnel: Where do I get my leads? What do I do once I have them? How long does it take me to move them through the funnel? How many leads convert to sales? 

You may not be able to answer all those questions at the beginning. You may have to go out and test it. 

This part of the business is very iterative. Think about businesses whose primary lead generators were hosting events or attending conferences. When the pandemic happened, those sources dried up. What used to be reproducible wasn’t anymore.

You might develop your products and services using an agile methodology. Do that for your sales processes as well.

No systems

You must always be measuring so you know when it’s time to revisit your strategy. You may saturate the market. Your message might get old. The tools you use may no longer be effective. You might experience a pandemic. 

It’s time to invest in a CRM and use it. Actually using it is the challenging part for many non-salespeople. It takes discipline. 

If you’ve already identified where you get your leads, how you qualify them, and the process they go through, you can customize the CRM to fit your process. A CRM tailored to your business will be most effective. 

If you don’t have all those questions answered, though, using a CRM with its out-of-the-box settings is better than nothing. You now have something that’s documented and measurable, that you can learn from. Things won’t be as likely to fall through the cracks.

No brand or marketing

Whether you’re doing the selling or you hire a salesperson, you need to know what your message is, who you’re selling to, and how you get the word out.

If you’ve started a business, you’re probably able to speculate on the best messages and channels, and are resourceful enough to figure out how to do it. If you’re not marketing, then perhaps you don’t appreciate why it’s so important. Or maybe you don’t have the time, so…

You can hire an agency, a freelancer, or do an internal branding workshop if someone on your team is skilled in that way. At the very least, you have to understand who you are, what you do, why someone should hire you, who you want to respond to your message, and how you get that message to them. 

Final thoughts

Filling any one of these gaps will help your business scale. Filling all of them will give you a complete sales strategy. 

When I started my business, I got five new clients in five weeks because of all the networking I did prior to my decision to found Trajectify. I didn’t learn anything about selling because I got them through my network. It wasn’t something I could ever replicate. I wasn’t even quite sure what I did.

You may get by in the early days without a sales strategy. Eventually, the referral and networking system will show its limits. You’ll be in a much better position if you’ve already begun to fill these gaps.