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MSP referralsIn any B2B context, the temptation to rely on referrals for growth is substantial. Referrals can be lucrative, and the nature of a referral means that the sales process itself is relatively easy. The prospect comes to you with a built-in level of trust and a strong intent to buy—the recipe for a sale that’s often as easy as hitting a slum dunk on your nephew’s Fisher Price basketball hoop.

As a business matures, the frequency of referrals naturally increases. You have more clients, so you have more sources of referrals. We often see MSPs who were once incredibly aggressive about pursuing new prospects rely more on the momentum of referrals and less on finding totally new prospects.

Drawbacks to relying on referrals

There is nothing wrong with closing referrals. Referrals are an important part of a sales pipeline, but you should be wary of them becoming one of your primary sources of prospects.

Here’s why:

  • Referral activity can be inconsistent, which could create long periods of stagnation.
  • Referrals are not a reliable way to capture or expand into new markets.
  • Referral activity is largely driven by the total sum of your other marketing and brand development efforts, which means even your referral stream depends on your activity that keeps you top of mind with your clients.

A More Balanced Pipeline

A well-rounded pipeline will help you create a consistent stream of referrals and new prospects. The exact makeup of that pipeline will vary based on your resources, goals, and target market, but in general the components of that pipeline include:

  • Referrals from existing clients
  • Appointments with potential prospects
  • Relationships with key centers of influence
  • A drip marketing system (a blend of email and other touches)
  • One-on-one follow-up with prospects (a phone call or something else beyond sending an email)
  • Quarterly seminars or other events designed for clients as well as prospects

Following Through

For all of this activity to culminate in consistent, predictable returns, the execution that you put in must also be disciplined and consistent. That’s easy to say, but we often see the beginnings of a pipeline breakdown not in its design and launch but in its long-term execution. The drip system goes stale. The sales team starts to lapse on follow-up. A one-month delay in running events turns into a year-long drought.

It’s human nature, but it’s a pattern that leads back to the problem we were trying to avoid in the first place: an overreliance on referrals.

If you invest the time, energy, and resources into building a well-rounded pipeline, you should also put thought and planning into how you will maintain a consistent level of activity from month to month. Your exact approach may vary—perhaps you use a sales coach to hold you accountable, perhaps you hire an appointment setting firm to deliver you new meetings each month, or perhaps you give your team incentives for staying diligent. But far more important than the specific “how” is that you are making that effort in the first place. The powerful pipeline that you’re after will never reach its full potential if it’s poorly designed or if it has little fuel to drive it forward.

Photo: SSSCCC/

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Brad Stoller

Posted by Brad Stoller

Brad Stoller is the CEO/Founder of Creativity Counts, LLC. Brad’s in-depth understand of the frustrations that MSP owners and managers go through when trying to keep their businesses growing led him to create a new way. Brad formed Creativity Counts to help MSPs not only find targeted prospects, but also actually help them CLOSE new business through a combination of technology, human interaction, and positioning his clients as true experts in their communities. His company is all about disrupting the old way of costly sales programs and creating new and effective methods and strategies to really help MSP’s, not just giving them another lead generation program.

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