June 04, 2013

Guest Post: How to Maximize Your Referrals

Two gold miners strike gold.

One miner believes she should distribute her resources across the entire mine and only spend a fraction of her time where there is gold. The other miner believes she should spend the majority of her resources where she found gold.

Which miner will come out ahead?

Your database of client relationships can be a gold mine for generating referrals. But not all client relationships are created equal.

Just like the first miner, too often businesses get into trouble because they invest their resources evenly across all clients while a small fraction account for the majority of referrals.

Instead, maximize your referral efforts by investing the majority of your resources in those clients that are most likely to refer your business.

Segment Your Database by Value

In order to invest in the right relationships, you must first organize your database of clients from highest to lowest potential for referrals. To do so, bucket your client relationships into segments using the A, B, C, D method.


This segment should consist of your top 10-15% of client relationships that have the highest potential to refer you. Include clients that already refer you regularly or those you believe are likely to in the near future.


This segment should consist of your next strongest 25-30% of client relationships. Include clients that you believe have the potential to eventually become A's with a little more effort on your part.


This segment should consist of those clients that you have an average working relationship with but you're not sure if they'll ever refer you. This group will make up the next 40-50% of your database and should consist of relationships that you believe have the potential to move into the B category.


The last group will make up the remaining 10-15% of your database and represent a segment of clients that either 1) you don't like working with them and/or 2) they will likely never refer you.

Investing in Your Segments

The most effective approach to maximizing referrals is to invest the majority of your referral generating activities into those client relationships with the highest likelihood of referring. As a general rule of thumb, allot the following percentages of your referral generating resources for each client segment:


Your A's should get about 60% of your resources with the goal of generating as many referrals as possible.


Your B's should get about 30% of your resources with your goal to build a relationship that will move as many of them into the A category.


Your C's should get about 10% of your resources with low touch interventions (i.e. newsletters) with the hope that some of them might move into the B category.


Your D's should get deleted from your database! You have limited resources for referral generating activities and this group is the least likely to result in value. Delete them from your database and focus your attention on the other three categories.

See the givegive database reference chart below:

Your Gold Mine

Your database of clients is a goldmine. But how you think about investing your resources will directly impact the number of referrals you generate for your business.

Focus your efforts where there is the most value and watch as your referrals grow.


Jeff Riddle is a referral strategist and the founder of the givegive, a leading methodology for growing businesses through client referrals. You can learn more about the givegive and Jeff by visiting thegivegive.com.