I regularly meet with prospects and help them understand how much business they are getting from their network and what is being left behind. It is very enlightening and they are always surprised by their results. Do you know your referral percentage? No? Don’t worry, most people don’t know. So, grab a pencil and a calculator and I will help you find your “Referral Percentage” here we go,

1. List 4 people in your network who have passed you the most business by referral this year. For instance Tom, Sue, Bill, Kim.

2. Now, for each person write the number of referrals they have passed you in the last 12 months. Tom=4, Sue=12, Bill=5 and Kim=8

3. Think about each of those people, how many people do you believe each of them know? On average, we each know about 250 people. So, Tom=300, Sue=500, Bill=800 and Kim=200

4. Next step, add all of the referrals you have received together, in our example it would be 29, and then add all of the network members together. In our example, it would be 1800.

5.Last step, you will need your calculator to complete the process, 29 divided by 1800 equals .016%

What is your percentage? Are you surprised? Did you have 4 referral sources? Many of my clients are shocked and frustrated when they do this exercise. It is possible to increase this number. The very first time I did this it was .010 and I was shocked.

Here is the real question, what are you going to do to change this percentage? What steps can you take to develop a higher referral percentage? Hint: Stop adding people to your network, instead start digging deeper into your network and develop stronger strategic relationship! Start with the 4 people you listed here and if you did not have four then work on the ones you have. When you are sure that you have increased that relationship, then move on to create a new one, until your have your “Four”.

If you would like a system for generating a consistently higher percentage take a look at The Referral Institute for help.

When business people tell me that they do business with anybody, everybody or small businesses, I know that they have not spent time identifying who they want to work with and they are hoping that someone else will figure out for them. They are aiming at the sky hoping to hit a bird and every now and then, a flock will fly over a few get hit, and now the businessperson thinks their network is working. Reality is the flock just happens to fly over at the exact same time that the bullets fired. This is reactive and requires you to use a lot of time and energy with unpredictable results.

If you are going to build a business by referral, you have to narrow the scope so that you can identify referral sources who are working in the same target market, you will know where to spend your time networking and you will be able to collaborate with referral partners.

Look at your current clients, what do they have in common?

Survey your clients and see if you can find a common denominator? Surveymonkey is a free tool that you can use to customize a survey, go to www.surveymonkey.com design your own survey. You can get a great deal of demographics in a very short period, this can give you a snap shot of current clients and allow you to find the common thread.

Working on your target market takes time and energy; it will pay off in the end.

Aristotle said, “We are what we repeatedly do.  Excellence,then, is not an act, but a habit.

So, let me ask, what habits have you created around your referrals business?

The first habit that every business person should have is the habit of tracking your activities.  Creating a referral system requires that you track several things.

Track your networking activities.

• Who are you networking with?
• What activities are you participating in?

Track your giving.

• Who have you given business to?
• What connections have you been able to make?
• What was the value of the business you have given?

Track your receiving.

• Who has referred business to you?
• Who has connected you?
• What was the value of the business you received?

Track your thanking activities.

• Who have you thanked
• How have you thanked them?

When you have a system for tracking your activities and you use it consistently you begin to develop a habit.  It is these habits that creates excellence!

Referrals can come to you from many different directions.  Some will come from people you meet at networking events, some may come to you from your customers, and others may come from your trained Referral Partners.  You will never know where they are coming from if you do not take the time to track your business.

Every time someone calls, ask the simple question, “How did you hear about us?”  Open a spreadsheet and track every customers or prospective customer’s response.

This simple task will allow you to identify where you may want to spend more time or money.  If you find you have one person who is acting as your advocate you will want to find ways to thank or reward that person.

Maybe you find that all the time you have spent at a particular organization has not paid off as well as you thought, but the place where you have been volunteering  has had the added benefit of being a gold mine of clients.  Now you will be able to make a sound decision about where you are spending your time.

Until you start tracking, it’s all guesswork and you may be ignoring some of your best sources.