How to Track Income from Referral Marketing

May 16, 2005 -- Ask ten people the most cost effective way to market their company and seven of them will likely answer, “word-of-mouth.” Referral networking. Ask them how cost effective it is and you'll be luck to get any answer at all. Unless, of course, you ask the CEO of the world's top referral networking company, BNI, Dr. Ivan Misner.

“It's critical,” Misner says, “to track your income sources, whether from referrals, or anywhere else. But before attempting to track the results of something, its good set goals to shoot for. How many referrals do you expect to get? How much income do you expect to realize from these referrals? How many referral sources will you need to achieve these projections?”

According to Misner, your forecast should be based on four factors: the number of referrals you expect to receive, the dollar value of the referrals you expect to get, the percentage of your business you expect to result from referrals, and the number of sources you'll need to achieve the expected number and dollar value of referrals.

“When tracking income from referrals,” Misner says, “I see business owners look at the value of each referral for the dollar amount. Obviously, this isn't the net income to their company. The bottom line is you should measure the income that comes directly to you. With some professions that means gross income, with others it means gross commission; however, in both cases, it's gross money to the business owner. That said, there's no perfect way to measure. Every variation has a problem.”

BNI (www.bni.com) is a referral networking organization, which at last count had over 3,600 individual chapters in 22 countries worldwide. BNI's Founder & CEO, Dr. Ivan Misner is the author of several book’s including the NY Times best-seller, Masters of Networking, (www.MastersofNetworking.com) and the recently released #1 best-seller, Masters of Success (www.MastersofSuccess.biz)

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Michael Drew
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