80:20 rule myth shattered
Ask, and you will receive. The findings of a recent national research study have shattered the widely-held contention that successful retail businesses generate around 80 per cent of their revenue from repeat and referral transactions.
Referrals have declined, substantially.
Consumers report effecting direct and personal referrals and recommendations to less than 8 per cent of entities with whom they dealt with in the four weeks preceding interviews.
Arguably, the most disappointing finding was that only 2 per cent of consumers reported being requested by service providers to provide recommendations, referrals and introductions.
Clearly, the art and discipline of asking for business has been lost on many – new generation employees in particular.
Things don’t just happen in business. They need to be encouraged, supported and nurtured.
Follow up and follow-through are integral elements of a transaction. They are the founding steps to establishing and sustaining relationships, and a to a burgeoning customer base.
Recruitment, induction, training and on-going development processes need to feature and to reinforce the need for and benefits from a consistent practice of requesting endorsements, recommendations and referrals.
They must be complemented with an integrated schedule of complementary self-initiated contacts with those prospective clients who have been identified and nominated by a satisfied customer. The circle of life has similar characteristics to that of the cycle of business. Birth, rebirth and procreation are fundamental.
Remember, ask, and you will receive.
Dismiss concerns about the fear of offense and rejection.
Barry Urquhart runs Marketing Focus and is a business strategist, consumer behaviour analyst and keynote speaker. He can be contacted at [email protected] or on 0419 835 555.
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