When we ask clients how they get new business, some life science firms respond: “We get most of our customers from word of mouth and referrals.”
The implication is: “We are getting high quality clients and saving money on sales costs; isn’t that great?”
This may be great in the short run, but in the long run, referrals will seldom deliver bigger projects than the original one you did for the referrer. In our experience, referrals have a downward trend over time. Track your own referrals. Was the project you got as a result of a referral bigger or smaller than the project you did for the referee?
The way to fight this downward trend is through active marketing. This starts with a) clear positioning, which must then be b) articulated and c) promoted through the touchpoints that your audiences pay attention to (e.g., web sites, trade shows, email blasts, etc).
Referrals are great, but it is really hard to build a long-term business model upon them and even harder to build a business that you’ll be able to sell upon them.