Usually when I post about referrals, it is in the context of marketing strategy. While having a referral system is a great marketing strategy, customer referrals are also a good leading indicator that you are delighting customers.
Leading indicators are important because they provide early warning signs that can be used to take corrective action. Compare these with lagging indicators, such as profit per employee – once you have the measurement, it is too late to do anything about it. Are the metrics that your company uses leading or lagging?
If you see that your customer referrals are tapering off, make sure you investigate the cause and take corrective action before you start losing customers as well as prospects. If referrals are increasing, investigate that as well and do more of what’s working.
