Small Businesses Missing Out On 'Referral' Economy

By Chris Stening, MD of Easynet Connect

The 'referral' economy is alive and well, but small businesses are missing out.

In our previous report, "Credit where it's due - cashing in on the referral economy," we looked at the value of, and the barriers to, referral schemes in the Small to Medium-Sized Enterprise (SME) market.

The 'referral' economy, whereby businesses refer their favourite suppliers to others in return for a small amount of commission, is a natural development of the personal recommendations that businesses make every day. We found that that a staggering 81% of SMEs regularly refer business to others,...

...while failing to earn a single penny in commission for doing so. SMEs make, on average, three recommendations every month, with the average value of the referrals being £7,500 each. This equates to some £270,000 of referred business every year being passed on - with SMEs failing to receive any reward in return. However, with 19% of SMEs never recommending the business of others, some are missing out on this important aspect of business interaction and networking.

The 'referral' economy is clearly important and businesses are recognising the networking opportunities it offers. But SMEs often don't appear to be compensated financially for the vital contribution they make. Whether as a formalised, accredited channel partner or straightforward sales agent, the potential revenue available to businesses that sign up to referral schemes is impressive, as well as opening up new markets for them and being a significant reputation builder. This could make all the difference to an SME's survival today, and is one of the reasons why we launched our own Sales Agent Referral Scheme in June this year.

Other key findings from the report:
- SMEs make an average of three recommendations per month, equating to £22,500 worth of business or £270,000 per... continued on page two >

 

 

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