How to Track Your Referrals in ACT! or other CRM Database – The Referral Tree

Other than making appointments for new business, tracking referrals in ACT! or another CRM database is one of the most important tasks you need to do to grow your business. Our company knows a lot about this because it is one of the very first agenda items that we went over with our Sales Coach when we hired him.

There are several mistakes that most people make when they go through the process of recording where their referrals are coming from. Believe it or not most people DO NOT ask where someone got their phone number when they call to find out information about a product or service. Most are so excited that someone called that they fail to ask exactly where the referral is coming from. The second mistake that most people make is they don’t dig deep enough to get the actual source, especially when it comes to the Web. When someone responds with the answer, “We found you through your website…” the majority of people stop and fail to ask the most important question, “Do you remember how you got to our website – we invest quite a bit in making sure that people can find us – do you remember how you got there?” If you don’t ask, you won’t know if it’s your website optimization, a testimonial on yahoo, google or yelp or some other linked website that transported them to your website. The answers over time will help you determine how to spend your time and money in gaining Web Referrals.

Now it comes down to recording the referral where again we find a common mistake made by most people that record the source of the referral. Most people will create a field in their database that is either called SOURCE or REFERRED BY. That’s not a completely lame attempt because it quantifies the answer to some degree but it falls short in terms of being able to track referrals. We recommend a minimum of two fields: REFERRED BY and REFERRED BY WHOM. I know you’re saying, “OK genius, what’s the difference….”

The REFERRED BY field should be a drop down box that allows you to pick the category of the source of the referral, not the specific person. Here are some examples Customer, Google, Yahoo, Chamber of Commerce, BNI, Email Marketing etc. Then the REFERRED BY WHOM field would have the name of the person, ex. LOU NICHOLS. Tracking it this way does two things. It allows you to ask questions like, how many referrals have we gotten in total from the Chamber? But the REFERRED BY WHOM field let’s you take it a whole step further….

Here is where the money is at – tracking the referral tree…..
You notice that when you finish the job for Sam Jenkins that he was referred to you by Lou Nichols. You call to thank Sam for his business then you pick up the phone to call Lou Nichols. You mention to Lou that it is only because of his referral that you were able to do the work for Sam and you thank him. In addition to that you notice on Lou’s record that he was referred to you by Jim McGrath from the Chamber of Commerce. You then call Jim McGrath and say, “Jim I just wanted to thank you, we just finished up work for a guy that you probably don’t know – his name is Sam Jenkins but I never would have met him if it wasn’t for you referring me to Lou Nichols. Both Sam and Lou are now very likely to refer you out again. And it goes on and on back until you get to the very original source in situations where you have been spinning off the referrals for years and if you drew it out on paper it would look like a referral tree.

Best of luck.