Your Best New Client Is Already Sitting Inside Your Existing Client Base

I was working with a brilliant recruitment business last week on their Operation Goldmine strategy and whilst we were mapping out their customer workflows, we touched on some recent data I had about the economics behind customer referrals, one of the immediate uplifts from implementing Goldmine.

The research, based on data covering more than 10 million consumers, found that around 20% of new customers came through referrals, yet (and this is the really fascinating part) those customers accounted for 72% of new-customer profits over the following three years.

Why?

Well basically, referred customers tend to be cheaper to acquire in the first place (aka your CAC is lower), they tend to stay longer, spend more with you and, crucially, are more likely to refer somebody else too.

So you don’t just get a new customer. You basically create a total chain reaction that keeps giving and that self perpetuates.

We talk about this a lot in the BD training we do, like the Velocity and RevOps programmes, where we possible spend too much time looking outwards, obsessing about finding the next, new client.

More leads. More cold calls. More LinkedIn messages. More data. More automation. More BD activity. All of those things, of course, have their place.

But for most recruitment businesses, one of the biggest untapped sources of new business is sitting right under our noses - those clients we are already working with and who already think we’re brilliant.

... and it is the last piece, think we're brilliant, is the critical thing here.

There is a big and very important difference between customers who are simply satisfied and those who proactively advocate for a business.

A client giving you a 9/10 in a satisfaction survey is nice, but a client who introduces you to three other HR Directors is far more valuable.

So the question is simple, do you actually know which of your customers are your true promoters?

And, even more importantly, do you have a deliberate system for turning their advocacy into new business?

Try this exercise today.

Take your top 20 clients. Not necessarily your biggest clients, but your strongest advocates. The people who love working with you (and probably whom you love working with too).

The hiring managers who repeatedly come back. The clients who tell colleagues how good you are. The people who would happily recommend you.

Now do a simple network map (and yes, you can get your mates Claude and ChatGPT to help you with this!).

• Who else do they know?
• Who have they previously worked with?
• Which businesses have they moved from?
• Which industry groups are they part of?
• Which other divisions, countries or business units exist inside their current organisation?
• Which suppliers, customers, investors or portfolio companies are connected to them?

Suddenly, you start to realise that one great client relationship that you already own, is so much more than just that. It's a complete network of potential new customers..

And that is before we even consider our candidate networks.

In recruitment, we have something most companies don’t have: two enormous potential referral ecosystems (that is what makes recruitment so unique).

Clients can refer clients. Candidates can refer candidates.

But candidates can also become clients. Clients change companies. Candidates become hiring managers. Hiring managers become CEOs. People introduce recruiters to former colleagues.

The network effect can be enormous, and this is why account management matters so much!

We’ve talked about this extensively across the different TRN programmes.

Velocity isn’t simply about generating more new-business activity. It’s about smarter BD, multithreading relationships and identifying the signals and routes into organisations that give recruiters a genuine reason to engage.

Our work around account penetration strategies with Operation Goldmine is based on a similar principle - before continually hunting for another new logos, understand how much opportunity already exists within the relationships you already have.

And the Pinnacle programme, takes it all one step further.

If you’re moving beyond contingent recruitment into talent intelligence, mapping, workforce planning, advisory and other consultancy services, your relationships become much, much deeper.

You know more people. You solve more problems. You become more valuable.

And valuable relationships generate more recommendations.

Recent LinkedIn and Bain research found buyers were three times more likely to choose a supplier heavily recommended by peers or customers than one promising a better product or lower price. That’s massive for recruiters.

Your competitor can claim they’re brilliant, but your client saying you’re brilliant is considerably more powerful.

Now think about this in context of the AI world we live in now, where trust is being challenged more so than ever before.

AI is making it dramatically easier for recruitment businesses to generate lists, research prospects, personalise outreach and produce marketing content... all at scale.

So everyone can create more noise and is having a filed day doing just that.

When that happens, the differentiator becomes trust.

LinkedIn’s latest work on B2B buying argues that customer proof, peer recommendations, expert endorsement and relevance are becoming important signals both for humans looking to buy as well as AI systems deciding which businesses to recommend (I had an awesome conversation with a new TRN partner who specialises in Geo about this very thing).

That creates a huge opportunity if you think about it.

You don’t necessarily need the biggest marketing budget to make that happen, but you do need people in your market saying "Hey, speak to these guys. They’re brilliant.”

So, perhaps we need a new recruitment KPI to sit at the heart of your weekly reports.

Referral Revenue (%)

Alongside jobs, interviews, placements, GP, conversion ratios and BD activity, I’d start measuring the percentage of your new clients and GP that originates from recommendations from existing clients, candidates and other advocates?

Then go deep into that and analyse what this is telling you (build an simple AI Agent to do this live for you each week).

• Who referred them?
• Which clients generate the most introductions?
• Which consultants create the most advocates?
• What happened in the relationship immediately before the referral?
• Which services generate the most advocacy?
• Which referred clients go on to refer someone else?

So, what next?

Well, speak to us here at (TRN) The Recruitment Network and we'd happily help you bring this to life and build a proper referral engine that sits inside your business, humming and building pipeline for you all day long.

Or you can just get cracking yourself:

1. Identify your promoters. Find the clients and candidates who genuinely advocate for you, rather than simply measuring satisfaction or NPS.
2. Map their networks. Use LinkedIn, CRM data and AI to identify where relationships and potential introductions exist - this will help us build our GTM plan.
3. Create referral moments. Don’t randomly ask, “Do you know anyone looking for recruiters?” Ask at the point when you’ve delivered something genuinely valuable whilst they are salivating about you.
4. Make introductions specific and easy. “I know you know Sarah at XYZ. Would you be happy to do an intro for me, please?” is far more likely to get an action than just "who do you know?"
5. Track everything. Put referral source, referrer, resulting revenue and subsequent referrals into your CRM - we need the data.
6. Reward the right behaviours internally. If a consultant creates a client advocate who generates £100k of GP, recognise the value they created, not simply the placement that started it.

There is a lovely compounding effect to all of this.

Doing great work means a happy client which creates an advocate who will give you an introduction to a new client who you do more great work with and becomes another new advocate who will give you more introductions.

That is an ever turning flywheel of opportunity, all hitting the top of the sales funnel.

We talk endlessly in recruitment about winning more clients.

Perhaps we should spend a little more time asking how do we become so valuable to the clients we already have that they help us win the next ones?

Original source: LINKEDIN ARTICLE 

Article by James Osborne
Chairman at The Recruitment Network (TRN), Founding Member at The Global Recruitment Alliance (GRA) and CEO of Innergy.