No.240: The Truth About Referrals

Willmot's Weekly Wisdom

Back in November 2011, The Society for Executive Wisdom (my research organisation) completed a survey on business referrals. The study comprised of professional services firms, business owners, salespeople, business development managers, etc., and 90.4% rated the importance of referrals as high.

But what about the other angle in the referral dynamic? What motivates someone to take the risk and refer someone? After all, if it goes bad you’re certainly going to feel guilt and probably some level of responsibility. Here’s the rub:

  1. Do I want to be the catalyst for my friend having a bad experience?
  2. Does my referral seem genuine or might it be inferred that I’m receiving some benefit for making the recommendation?
  3. Will the person I’m offering the referral to mistreat the provider and impact my future business dealings with them?
  4. How is my reputation affected?
  5. What might go wrong?
  6. Will people appreciate the referral?
  7. Is it worth the effort?

Referrals can be a complicated dynamic with many pitfalls for everyone involved. Not only do you have to be great at what you do to receive the referrals, but you must also make it safe for people to recommend you. What you do has to be worthwhile and ultimately worth the effort.


“A staggering 73.6% of organisations do not have a formalised referral system or process.”
— Business Referral Survey by The Society for Executive Wisdom.