Small Business Blog

Custom Leads from People Who Already Know You

There are an infinite number of banner ads to click that promise a ton of leads. If it sounds too good to be true, then it probably is. Downloading a list of contacts is a very passive and ineffective strategy for generating sales leads. Working from a base of existing customers is a much more effective approach.

Leveraging your existing customers before seeking new ones is a basic rule of marketing followed by successful businesses of any size; sole proprietors to Fortune 100 companies. The difference between existing customers and strangers on a list of leads, is that existing customers are people who you’ve worked with; people who know the quality of your services first-hand.

“A study, co-authored by Shawndra Hill, Wharton professor of operations and information management, found that consumers are far more apt to buy a company’s product if they are ‘network neighbors’ with existing customers.”

-Wharton School of the University of Pennsylvania

If you are providing quality services, your clients will naturally be inclined to advocate for you. These natural referral systems reward professionals that go out of their way to provide outstanding services. Creating the “WOW” effect for just ten of your client’s will do more for you than and excel file full of cold leads.

To bring customer advocacy full circle, you should consider rewarding clients that go out of their way to send you new business. Run a promotion campaign and offer a gift to let your clients know that you appreciate their positive referrals. Rewarding your clients is one of the easiest ways to say, “Thanks for spreading the word, keep sending me qualified sales leads.”

A strong business referral network is the best source of new business.

Tags: custom lead generation, sales leads, Wharton School of Business

This entry was posted on Monday, May 11th, 2009 at 4:00 pm and is filed under Wharton School of Business, custom lead generation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

6 Responses to “Custom Leads from People Who Already Know You”

1. Beth Bridges says:

   May 11, 2009 at 11:49 pm

   I haven’t read the article yet, but I look forward to learning more about the study. It seems like a pretty basic point, but sometimes in our need to keep growing and expanding, we focus on looking “outside”, rather than “inside.” Seems like our very happy customers would be the best source of referrals, but we’ve got to help them do it. Not everyone knows that it’s okay to refer or how to do it. Especially if your customers aren’t experienced business people. I’ve actually had people ask me if it’s okay for them to refer others to me!
2. Beth Bridges says:

   May 12, 2009 at 9:53 pm

   I read the article. Sorry, but the results of this study seem a little obvious to me…anyone else? I had to speculate in my own blog post on the study: http://bethbridges.blogspot.com/2009/05/wharton-studies-network-based-marketing.html Would be interested in your thoughts…
3. Chris O. says:

   May 13, 2009 at 1:38 pm

   Beth,

   I suppose the results of the study should be obvious to a seasoned referral networker but you would be surprised how much energy small business owners expend on courting new clients before they’ve fully leveraged their current client-base.

   I see this amongst web-oriented businesses the most. For example, some web designers pay fees to post to dozens of cities on Craigslist. Not only does the money add up but it can be very time consuming to monitor dozens of ads, responses, and postings.

   It’s no surprise that all of this effort may results in low quality leads which rarely result in sales. Anyone can go out and try to court strangers on a website, which inherently neutralizes any competitive edge.

   I view an existing network of trusted clients and colleagues as the greatest barrier-to-entry.
   best,
   Chris
   Referral Key
4. zen says:

   August 30, 2009 at 3:30 am

   I have the same opinion that the small business owners spend a lot energy to expend on courting new clients and the best way I think is the referral marketing and business networking.And also think that if you can make a customer happy he will refer others to you.Though these are all time consuming
5. chatlivehelp says:

   September 30, 2009 at 5:53 am

   Ya I think best one is to make a customer satisfied with your work.That will help a lot…
6. articlescreen says:

   November 12, 2009 at 3:03 am

   Nice and clean blog always attracts me and not only that the way you discussed about business ideas is really helpful too.Good job.