Imagine a time your business where you don’t have to look for business. You don’t have to spend exorbitant amounts on advertising, waste time figuring out new marketing channels, or even have to post on social media at all! Imagine getting warm leads ever day through referrals from people that you know, like and trust. And giving them referrals in return when your clients need their services. Doesn’t that just sound like the easiest way to do business?
Well it’s possible when you have your Power Circle. Your power circle happens when you surround yourself with other businesses that complement the products and services that you provide to your clients. This way the circle can refer customers and clients between all of them. There’s so many reasons that this can be beneficial, it not only brings in new clients through referrals, it also increases their loyalty to your business, lowers your customer acquisition costs, and improves your credibility. Here’s how building a power circle can benefit your business.
Expand your Knowledge of the Wider Industry
Your power circle is a great resource you can tap into. It gives you access to a diverse range of professional expertise and experience. You can use it to learn more about the wider industry that you’re part of, get business guidance, ask for feedback, and stay up to date.
When you build the relationships with your power circle you can learn more about their niche. This may just be from talking with them informally, sitting down for a workshop, or if you’re lucky they may also give you access to exclusive resources that you might not otherwise have access to. The information you learn from them can really help you to understand other industries that complement your products or services.
These relationships can also help you by informing you of industry trends, new innovations, legal developments, or other things so you can stay current with developments in industries that affect yours. You can use this information to pass on to your clients when it is useful and also to identify when to refer your clients of to others for their expertise.
Your power circle will be filled with people from different industries, backgrounds, and experience levels. You can utilise your relationships to learn from their experiences, successes, and mistakes which you can learn from to enhance your creative and critical thinking. This can lead to a deeper reflection of your own knowledge and beliefs, which my in turn help your clients. Your power circle can also give you unique industry insights, find innovative solutions, and guide you through any complex challenges that you may have. This targeted advice can help you to grow professionally, helping you to find success easily and quickly.
As your power circle grows and develops, you may find ways that you can collaborate together. This might be with one person in your power circle or all of them. Think hosting industry events, collaborative marketing resources, or simply working together to support a client. It’s great to be able to work together in a way that actively utilises your expertise, supports your businesses, and helps your clients.
Your Power Circle is Great for Customer Experience
Your power circle not only makes your business life easier, it also makes the lives of your clients and customers easier too! By surrounding yourself with complementary businesses, you can refer clients that need the extra help to the people that can help them rather than expect them to figure it out for themselves.
Here’s an example for you. We have a couple that’s looking to buy their first home. They’re in their late 20’s and make a decent amount of money between the two of them, but they’re nervous about taking this big step into property ownership. Whose services could they use?
Their first step would be talking to a mortgage advisor to figure out how much they can borrow and figure out a good strategy for paying it off quickly. To get a mortgage, they need insurance so they talk to an insurance advisor. They also talk to a lawyer to get any legal stuff started and to get advice on what they lawyers need to go ahead when purchasing a property.
From there, they get to the fun stuff and start to look at properties. Once they’ve found one, they work with the real estate agent and get a property inspector to get it all checked out. When it comes back all clear they put an offer on the house and it gets accepted. Yay!
So they book a moving company to take the stress out of their move.
But, after a month of living there, they decide to do some renovations. So they get a builder in to make some changes, a plumber to update the shower in the bathroom, and a painter to give the place a fresh lick of paint. They also decide to get a gardener to help tame the unruly garden.
That’s at least 10 different people this couple has used in the process of buying their first home! Now, buying a home can be a pretty stressful experience, especially when you’re doing it for the first time. You have to do a bunch of research to find all of these people, book in times to see them, view all the houses, decide which one you want, and then pay for it all! It’s a big job.
So imagine if the first person they talked to, their mortgage advisor, had the names of the other 9 people in this process. Imagine how much less stressful the experience could be if this couple was just told the next step and given a recommendation (or several) on who to talk to and who would look after them throughout this process.
It Improves Trust and Credibility
Your power circle can help to improve your trust and credibility. It does so through reciprocal referrals. It’s one thing when someone personally endorses a business, but it’s even better when someone professionally endorses a business. Because they are essentially putting their professional reputation and relationship on the line by recommending it. There’s something powerful in that.
That something powerful is TRUST!
According to a survey by Nielsen, 89% of respondents trust recommendations from people they know the most. That means they trust other people more than your website, more than Google, and more than your social media. They trust a referral more than all of the marketing you could throw your time and money at. If someone they trust recommends your company to them, it’s an automatic transfer of trust.
The trust that is formed through a simple referral does wonders for your business. It’s a form of social proof – where people are more likely to use the a product or service because of other people. It’s similar to reviews or testimonials, but way more personal. It’s one thing to read a five star review from Joe Bloggs in New York, but it’s another to be verbally told about something by someone you trust.
This is because the referral acts as a validation of quality. Who would refer a business’s product or service that didn’t meet or exceed their expectations? No one!
A referral suggests that your business good. But a referral from another professional reflects not just their experiences with your business, but the positive experiences of all the other clients they’ve sent your way. This can enhance your credibility in the marketplace immensely! All of these positive experiences can break down the barriers of perceived risk. Even if they’re not particularly risk-adverse, a referral can help them to not get caught up in the uncertainty that comes with trying a new product or service. I can calm their worries because they trust these other people’s experiences. If it works for others, it’ll work for them too!
On the flip side, referring to other people in your power circle also increases your credibility. By doing so, you’re acknowledging that you might not have all of the answers. But you clearly have a network of people that do. People that you trust enough to refer to. It shows that you care about your clients enough to support them throughout the entire journey they’re on, not just the small part you play in it.
Sure, they might take some time to do some research and ask other people’s opinions. But those slivers of trust and credibility are already cemented in place and likely to affect their choices.
It’s a Cost-Effective Way to Find New Clients
One of the best things about your power circle is how cost-effective it is. All you have to do is build relationships with other businesses that could benefit both of your clients. How you do that is up to you, but we reckon business networking is the easiest way to build these kinds of relationships. These mutually beneficial relationships make for a more cost effective way of getting and keeping clients.
Let’s compare referrals to traditional forms of client acquisition. Traditional ways of getting clients include advertising, networking, and cold calling. All costly in terms of time or money. Traditional advertising like social media, paid search ads, radio, or print advertising require not only advertising spend, but you also need to pay for someone to manage it. When you already have a marketing manager, this might be less of a problem, but it’s likely your advertising spend is also higher.
There’s also the issue of results; these forms of advertising mean it’s difficult to ensure success from the get go and can prove difficult to measure at the end. Networking for new clients on the other hand can be time consuming – there’s almost always an event that you COULD go to in order to find clients. You just have to decide which ones are worth going to, and you can only do that by experiencing them for yourself. And finally, cold calling – a strategy that can definitely work. But you either need to take the time to do them and deals with all the “No’s” you’re likely to get, or pay someone else to do them.
On the other hand, your power circle and the referrals you get from them, are far more cost effective. All you have to do is maintain those mutually beneficial relationships. There are many ways to do this, and it really depends on the relationship. You can meet up at networking events, have regular coffees or lunches, volunteer, or do something like play a sport together (golf is a common example). These ways of maintaining a relationship are not only more cost-effective compared to advertising, but they’re also way more fun!
You can measure the success of these relationships in one of two ways. The first way is asking the people in your power circle to make the introduction between you and the new client, this can be via email or even just by getting in touch to let you know they’ve sent someone your way. The other way is to ask every new client you get how they heard of you – a question you should probably be asking anyway.
Referred Customers are Better for your Bottom Line
Getting clients that have been referred to you is so great for your bottom line, often even better than a regular new client. Referrals as a form of client acquisition often have a higher Return On Investment (ROI) compared to traditional forms of client acquisition. This means that the amount that the referral spends with you vs how much you’ve invested into getting them is much higher than someone that found your company another way.
The higher ROI is in part due to the lower acquisition costs that we’ve already touched on. But a lot of it relates to what happens once you convert the referral to a new client! Many studies have shown that referred business is easier to convert, is more likely to become regular business, and has a higher lifetime value. This is even more prevalent when the referral comes from your power circle.
How can one referral do all of that? Well, as we’ve already touched on, it all comes down to trust. When your business gets referred to someone, the referrer has done most of the leg work for you. The person they have referred is primed with a positive mindset and a pre-existing idea of what to expect from the relationship. A lot of the time they’ve already made their mind up so you don’t have to do much to convert them to a client!
You just have to ensure they have a great experience once they become a client. If you don’t, it can lead to a pretty bad outcome – both for you, the person in your power circle that referred them, and the ongoing relationship you have. But, when you’re able to live up to the expectations the referrer has lead them to have, they’re pretty much yours forever. Research indicates that that the trust that they have in their referrer that gets transferred to you through a referral also leads to stronger customer relationships and loyalty. So they’re more likely to stick around.
And as a little cherry on top; when customers have a great experience, guess what? They’re more likely to refer your business to other customers! Thus, creating a cycle of of continuous growth for you and your business, significantly boosting your revenue over time.
So there you have it, a power circle is great for your business. We highly recommend finding a group of people that have businesses that complement yours to refer clients between. You’ll find that your business gets a lot out of it; from new clients, to a boost to your bottom line, and a more credible reputation. And if you’re looking to build your power circle, we have a great place to start!
