Prospect referrals from your existing customers are great!  They are the least expensive and generally most qualified sales channel.  They provide you with prospects who already have a great deal of trust in you and a great expectation of your competency from the first meeting.  With a good referral, you are also less likely to be fighting against the toughest competitor in the marketplace: status quo!


While there are things you can do to increase your customer referrals (such as just asking for them!), relying on customer referrals is essentially a passive process.  You really can't do much to drive greater sales volume if this is your only sales channel.  You can't browbeat existing customers (as much as we would like to!) for referrals!  At the same time as a practical matter, our existing customers have limited Rolodexes of associates that they can even potentially refer us to. It is, by its structural nature, a limited lead source.  When we are dependent on customer referrals we are not in control of the process of generating leads.


If we want to drive sales, then we need to be in control of our sales process and in particular our lead generation.  Whether we have lead generation that is the result of active networking, of outbound telemarketing or of inbound Internet marketing these are ways that we have leverage to affect change.  We can both vary the amount of our investment in these methods and work on ways of making these tools more efficient. Waiting for customer referrals simply won't do it.  Lead generation is an integrated part of your sales process and you must be in control of it.


As a consultant, whenever I meet a client or potential client that tells me that they get all their new sales from customer referrals, I know they are very exposed to a complete drop off in their sales.   Every company needs to have the capability to generate opportunities, not simply react to opportunities when they present themselves and at the same time every company cannot be overly dependent on one lead source.  Prospecting for leads needs to happen consistently, not just when sales are slow!