Referrals are one of the most important parts of lead generation, but they can often be misunderstood. People don’t always see the value of the person someone refers to, choosing to chase the person instead. But by doing so, you’re doing a fundamental disservice to the lead generation process, because referrals are an incredibly important tool when looking for investors.
See value in everyone
One of our core tenets at Sofos is to see value in everyone. Opportunities develop in different ways, and you can’t always be sure how something will ultimately take shape. The person you write off for not being part of the industry may actually provide a referral to a relevant investor…but you chose not to follow up, so you’ve essentially lost out.
We put a lot of weight on referrals mainly because we know they work. Investors are significantly more likely to invest in a company that was referred to them by a friend. It can lead to a lot of different scenarios where more investors are willing to have conversations, once they’ve seen the success of the person they initially referred you to.
So how do you counteract that and optimize referrals during the lead generation process? By building relationships and gaining referrals.
Ideally, you should also try to capture referrals from people who respond by telling you they aren’t in your industry. Even though they may not directly be a part of it, they very well might know someone who might be a better fit as an investor.
Another key part of building relationships is dividing your attention and giving everyone equal time. At Sofos, we encourage conversation and relationship-building. Even if someone doesn’t seem relevant off the bat, there is an opportunity there still.
To really optimize referrals, it’s vital to give them equal, if not more attention than the person who referred you to them. It’s vital at this stage because referrals are a form of social proof about you and your brand – that you’ve garnered enough attention that entices an investor to refer you to someone else. The person who you’ve been referred to is now a lot more open to what you have to say because someone they trust has sent you. It reinforces the strength of your brand and that’s what investors are looking for at this point.
Your goal during the lead generation process needs to be single-minded: Your building your network of contacts to attract as many potential investors as possible. As you do so, you’ll find the referrals increase as your network does. As long as you give referrals the attention they deserve, they are instrumental in opening a lot of doors for your business in the long-term.