Why Are Referrals So Important?

When hunting for new business, two primary obstacles stand in the way: access and credibility. Access is simply, "How can I reach my target audience? I know that Tom is exactly the person I'm looking for, but how do I connect with him? I don't have his email, phone number, address, etc." Credibility is, "Why should Tom listen to me? What separates me from everyone else calling Tom? He doesn't know me; he may not trust that I'm a good person with whom to work."

Referrals knock out both obstacles at once: access is immediately granted with the aid of the mediator; the middleman could either exchange emails or numbers or send an introductory email to both parties. With such access, you are brought directly to their attention and dodge the spam folder.

As you are connected, a line of credibility is established, either explicitly or implied, assuring the referred that you are someone worth working with. Better than meeting someone on your own, a referral rotates on the axis of the mediator, balancing on their reputation and rapport with both parties. In such a scenario, a strong mediator can support a deal of immense magnitude on her credibility alone.

When referred to/by someone, you no longer stand on your own two feet but carry the name of the middleman, which introduces the subtle danger in referrals. If business is about who you know, make sure to associate yourself with the right people. There is virtually no danger in having someone refer you, but be careful who you refer because they now represent you and your judgment. One bad referral and your credibility in the department could be shot.