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The Referral Confidence Curve

If you have been in business even just for a limited time, you would have recognized that a percentage of your leads, referrals, and business come from your professional network. In fact, if you are a small business owner, no matter your sector or industry, a significant proportion of your business likely comes not from marketing and advertising on or offline but from the relationships that make up your network.


A survey of almost 4,000 participants worldwide found that more than 73% of businesses report getting most of their business from “networking and referrals.” That is a compelling statistic, and it is one of the most important reasons why networking is critical to a business’s success.




The irony in the above statistic is that more than 87% of people in that same survey series said that they have never taken a college course that covered networking or word-of-mouth marketing! Forget about a class actually “on” networking—we’re talking about a course that just discussed the topic! Most people get their business from networking AND most people have never been taught how to do that!



This is disturbing on many levels. Business students are nearly completely unaware of how crucial networking will be to their future success. Business professionals are not investing in a source of income that is potentially responsible for nearly three quarters of their livelihood, nor are they investing the necessary time in growing their network. This may very well be the reason business professionals struggle and ultimately bust. Even for those who over the years have built

important relationships, established referral exchanges with others, and have an intact network, they face a more subtle and often silent business killer; they are not fully leveraging their network for optimal business growth.


If you belong to any of these categories this means you will most certainly be leaving opportunities on the table; these opportunities could be the ticket to taking your business, career, and influence to the next level.


There are four key fundamentals (the 4Cs) to the process of building a powerful personal network. They are Competence, Credibility, Clarity, and Connectivity.


The Referral Confidence Curve is depicted in the graph below and helps illustrates a key point in the networking process. In summary, the graph depicts the process of referrals received over time. It should make sense that referrals initially happen very gradually. After all, there is little to no chance someone will refer you if they don’t know anything about you; it’s not logical to expect otherwise.




Referrals may begin to take place initially on a very limited and gradual basis. However, everything begins to change when a threshold is met called the confidence point depicted as the X on the graph. Confidence is established when people recognize your Competence in what you do. The confidence point represents a key threshold that once established changes the curve thereafter. As you can see when those in your network have complete confidence in you, referrals will begin to flow your way with greater magnitude because you have credibility with other people. As a result, the curve steepens after the confidence threshold is reached.


The referral confidence curve assumes that when people are not confident in you, your business, or your service or product, you don’t receive many referrals and, if you do, they may be someone trying out your product or service but not telling everyone in town about you.


However, once the confidence threshold is hit on the graph, you can see that referrals increase more steeply. Not only do they increase in quantity but also in quality, too. Because this isn’t just someone trying you out; it is someone referring others to you with confidence and passing you higher quality referrals. This happens when you have great Clarity about who you are and what you do while developing and enhancing your Connectivity throughout the community. These two behaviors when added to Competence and Credibility become force multipliers to the process.


Here are the key takeaways from the confidence threshold on the graph: If you have not established confidence within your network, you shouldn’t expect consistent or regular referrals. If you have established confidence within your network, you should expect a steady stream of high-quality referrals. Others having confidence in you is critical to your business. In fact, it makes all the difference between a business that inevitably fails and one that ultimately thrives.


The 4Cs are designed to help you gain more referrals with every handshake because each of them increases the speed at which others will have confidence in you. Each of the Cs are crucial if you are to receive referrals because, when applied with precision, each has the potential to accelerate the rate at which you achieve the confidence threshold AND climb steeper after the threshold is met. This means they have the potential to affect referral quality, quantity, significance, and consistency. This is fundamental to what we should be teaching in business school today.

This material was developed in conjunction with Dr. Oudi Abouchacra.


About Dr. Ivan Misner


Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author.  He is also the Founder of BNI (www.bni.com), the world’s largest business networking organization. His latest book, Work Your Network With The 4Cs is a book about building a life and business where you don’t have to choose between winning or helping others.

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