The Referral Trap That Keeps Service Providers Stuck

In this episode, we dive into the “referral trap” that keeps coaches, agency owners, and service providers stuck in a cycle of waiting for work to come to them. Drawing on nearly 20 years of experience, our host explores why referrals feel safe but aren’t truly secure—especially after the challenges of 2024, when many businesses saw their referral streams dry up.

Key topics include:
- Why relying solely on referrals is risky and reactive, not reliable
- The difference between feeling safe and being secure in your business
- The impact of economic shifts and changing client behaviour on referral-based growth
- The importance of building proactive, predictable lead generation systems
- How to regain control, confidence, and joy in your business by diversifying your client acquisition strategies

Tune in for practical mindset shifts and actionable steps to move beyond passive referrals and create a more resilient, sustainable business. If you’re ready to stop waiting and start building, this episode is for you!

Curious about one-to-one coaching? Submit an application here and we can chat about your business.

If you’re ready for more personalised support, I currently have space for five new one-to-one coaching clients.

It’s 11 hours of tailored coaching for £2,500, designed to help you build a marketing system that feels like you — no formulas, no pretending.

If you want to apply for one of these spots before we open it up more widely, you can do that here:

https://airtable.com/app28MNir9SrqMbbK/pagGT2MCWXEbrEUVH/form

Transcript

0:27

Hello and welcome to the Caffeine Authority Builder Podcast. Today we're gonna be talking about the referral trap that keeps service providers, like coaches and agency owners stuck. And I have to say, I feel like the one solid constant during my. Nearly 20 years now working in this particular area, and that is referrals Feel safe. You don't have to sell, you don't have to put yourself out there. A client just drops into your inbox, into your phone and it feels like the easiest thing in the world. But I want to ask you, question and interrogate this today. Does safe also mean secure? What happens when those referrals stop? Which for many of us. And I include myself to some extent, they did last year, 2024 was really, really difficult year for businesses that had depended on referred clients for their business to grow. And by referred clients, I mean. Anything where an ex-client or an ex-colleague or current client colleague, somebody has said, Hey, this person would be great for you. You should get in contact with them, and a new business opportunity has come to you already warm because it's been verified confirmed that you are a good fit by this mutual contact. That's what we mean by referred work, and I wanna be clear that is the best kind of work when there is. social approval, social confirmation that somebody is gonna be a good fit for your business, and, and it minimizes the risk that the person is taking, the client is taking when they come to you and ask for your help with something, or ask for you to put a quotation, a proposal together to work with them. Often those conversations, those first calls we have, we call them chemistry calls or quick consults, they feel a lot warmer than if somebody has just Googled and found your business and is getting in contact with you completely cold, because when something is referred, it's. That potential client is much further through the know, like, and trust process, which means you are already established as an authority somewhat in their brain, and it's a more comfortable step to take to give you money. It also feels so much better as the service provider, as the person being paid because we. Feel like we have to do less convincing. We know that somebody has already vouched for us. We can get often into the breast acks of actually what we're gonna do together, rather than have to go through the, the cajoling, massaging kind of stage of, of helping that person to like you and. Nobody, and I don't know how to put this, there's something around people pleasing in this. It's like if you don't have to jump through the hoops, of reacting to somebody's body language or, yeah. Nonverbal cues and even the verbal cues and trying to get all the check boxes signed off. When you're speaking to somebody completely outta the blue, am I speaking in too many metaphors? But basically, if you, if you don't have to convince them, not only that you're a good person, but also you're good at your job during that first call, then it makes life so much easier. If somebody's referred you, some work to you, then oftentimes we will be starting the conversation typically with. A bit more of a joke, a chat about where the opportunities come from, the mutual person we have in common, what we may have done with them, and then turning the conversation to the prospective clients challenge and the opportunities that lies ahead and the pathway that we would recommend for them to get there. And then, put a proposal around that in terms of finance and timeline. That's the best kind of stuff, right? It is so good. It feels so good when that stuff comes in also because it's so flattering. but 2024 was exceptionally difficult for so many businesses in the service sector for economic reasons. But I think a lot of us didn't realize it was economic reasons for quite a while. And we probably took it quite personally. I know to an extent I did and thought, oh my goodness. Am I failing? what's happened? It really knocked my confidence and I know it did a lot of my clients as well. I have many people coming to me and saying, we, I dunno if I should just, quit and go back to my day job, or, reduce my staff or kind of hibernate the business for a while because I. I feel like everything we've done so far, which let's be clear, was basically nothing'cause they were passively sitting and waiting for people to come to them. doesn't seem to be working anymore and we don't have any clients lined up and we don't know what to do. Now that is a really difficult place to be in because when you don't have anything lined up, particularly in the service industry where our timelines are quite long for, a higher. Price point products. I work with a lot of agencies who are charging tens of thousands, if not hundreds of thousands, and sometimes into the millions of pounds per project, depending on the scale and breadth of it. People do not make decisions about investing in those kind of projects quickly. It takes a really long time and you need to be well on that prospective client's radar. And be establishing that authority long before they're gonna be in a position to actually do any appointing. So if you come to a company like Mine, caffeine, and say, we're a bit scared about the next three to six months, you are already dealing with a situation where you need to move pretty fast. If you say to me, we don't have any clients lined up whatsoever. And we've gotta keep the lights on. Next month, I'd say you've got a pretty urgent problem and I'd urge you to really, look at the low hanging fruit that you can pick, so to speak, and, quick clients that you can pick up based on your existing network. And, and just doing a bit of hustling. But what feels really amazing is when you don't have to worry. About depending solely on referrals, because you have not been passive, you are actively doing something about it. So here is the mindset shift that I want you to take into account as we go through today's episode, is that referrals are reactive. They're not reliable. It's like relying on rainwater to fill your tank. And as we know, we're going through a climate crisis and you cannot depend on rainwater and. What I hate most about reactive, is that you are not in control. You are waiting for somebody else to do the thing on your behalf. It's not something that you are able to. Predict in any way other than the previous data. And when we've had years like 20, 24 thrown at us where referrals really did dry up for a lot of people, you know, that data's completely skewed. You can't take that as the norm anymore because economically people are making different decisions. There are different, options available for many people in a way that they weren't before. Thinking about generative ai, some businesses that's really negatively affecting them over the long term. And so it's super important now more than ever, that you have a backup plan. And I want you to think about, thinking about a different part of life and a parent of young children. I have somewhat some control issues and when it comes to parenting, travel yes, also business. I dunno if you can ever, if you can relate to this, but have you ever depended on word of mouth, babysitters, for example, for your kids and then one weekend no. Was, no one was available? Or for example, have you, planned a holiday? I live an adventure holiday with lots and lots of stops and not a lot of rest, frankly. and, plum it. On the assumption that everything's gonna go right when that rarely happens, especially when you're traveling with kids and you're doing something a bit more adventurous. If I just had a single plan, I didn't have any backup babysitters, I didn't have some kind of fallback options in terms of if the car hire place completely lets us down when we go on our adventure holiday, which actually happened when I went to Costa Rica earlier this year. if I didn't have backup plans in place, then. I'd be really stuck in those situations. And this applies to business as well. It's such a dream and feels so good when everything goes right. You know when you do go on that adventure holiday and everything just falls into place, everything just slots and nothing goes wrong and you kind of look around, you're like, is this really happening? I don't wanna say it out loud'cause it's actually going really well so far. And also when you know your first choice of babysitter is available at the weekend. To go back to that analogy, it's similar to depending on referrals in your business, it's the kind of vibe around referrals they should feel nice to have. They shouldn't feel like something you absolutely depend on for your payroll. It's just not feasible that referrals are a, a dedicated new business strategy that you can depend on. And honestly, I can't think of a business type where if you don't agree with that, you aren't slightly diluted because referrals have become so unreliable for many businesses across the, the broad spectrum of service businesses that I work with over the course of the last 18 months that I feel like we're at the point where they truly are a nice to have for almost everybody. I know many businesses, and I've been in businesses where, we used to believe that referrals were our main source and we worked actively to instigate those referrals. But over the course of the last 18 months, even if you are actively, you're proactively doing something about generating. Referrals, which can feel quite uncomfortable for a lot of people. directly asking for referrals or making sure that you are socializing with previous clients so you're front of mind when they recommend to somebody else or following a client through their career as they move from business to business. Hoping that they hire you in for the similar kind of brief every time they move to a new business. the, these proactive ways of generating referrals. They used to be super dependable as well, but now we're even finding that people who are really being proactive about generating referrals are not seeing the same results. And so. I want you to consider this a reframe instead of hoping a past client sends someone your way, imagine knowing that you've got a list of people, you've got conversations scheduled, and you've got a steady system that is providing, new leads, new opportunities to you. And it may well be that. A whole bunch of referrals do come in and you win them, and it's the best kind of new business, but I don't want you to feel like you have to depend on something you don't know is round the corner. So giving you an example from my own business, I'd say I don't know what it is for the last 12 months, but I know the previous 12 months period. We shifted from being, 60 to 70% of our revenue came from referred traffic, and it dropped massively to about 20% of our, our revenue came from referred traffic through 2024. I'll be honest, I hadn't fully scaled up my system to enable. More business to come in and I had to really quickly step up my game and start working around this to re-implement and get fully up to speed. Our outreach system where we connect with people via LinkedIn who are in the space that we typically help best with, and we offer them something of interest, we become visible to them, and then they move into our, our environment. A caffeine email list, I guess is the best way to put it. they are then absorbing our podcast and other useful content that we put out there. And when the time is right, we are front of mind because we've stayed in front of their eyes over, a long period of time, an extended period of time. And so we often to mind when they come to hire somebody in that space. But I have to say, when I was getting a lot of referred work, I let the outreach system slip. I didn't turn it on for several weeks at a time because I was busy and I didn't think it was important and relevant to me, and I got stuck in in by not taking my own advice and having something ticking over in the background that makes you visible to. More new people who are the right fit for you, that you do not have to depend on converting into paying clients anytime soon. I really want you to constantly be thinking about how you can be becoming more visible to more of the right kind of fit prospective clients, not in the hope that they convert in the next three to six, to even 12 months, but that they're coming into your orbit. They are seeing you, they are moving through that knowlike interest process, and I, what I really, really want for you is that you do get a ton of referred work in the meantime, but what I'd love for you. On top of that is the peace and comfort that comes from knowing you are doing something proactive about getting in front of new people, as well as depending on or hoping and looking forward to getting referred work into your business. So I want you to consider a few questions here. When was the last time a referral came in for you and how did it feel? What happened the last time referrals slowed down or stopped? I want you to think about how much of your current business is dependent on other people recommending you. Be really honest with yourself. And if referrals disappeared tomorrow, what would you do to find your next client? What would you feel different if you knew exactly where your next client was coming from? And hopefully the answer to that last question is a sense of peace and removal of some stress of some court of sort. What would it feel like to know exactly where your next client was coming from? Safe is nice, but secure feels better. And how I feel now when I know where my next client is coming from, when I know that I'm naturally adding people into my orbit consistently, so I feel calm, grounded, able to plan ahead, I show up better. My current business, I show up better for my current clients. I. Feel, you feel in control. And maybe that's not necessarily a good thing in a lot of different areas, but certainly in terms of owning a business, I think feeling in control to a, a greater extent is an excellent asset because you show up to every interaction. And every opportunity with a different type of energy and a different type of confidence that instills more confidence in others and, helps you to win more business. So it really is a self-fulfilling prophecy and I really want you to think about what would having that level of predictability free you up to do both in business and outside of it? Because I know when I. I can predict things less when I feel like we've got less of a system and a, a plan in place. I feel somewhat chaotic. I feel inefficient, which is the most uncomfortable feeling for me. I feel messy and it shows up outside of work as well. less enjoyable, frankly. And, if you're a business owner as well, then in all likelihood you started your business because you got a sense of joy from it, as well as the fact it was the way you were gonna earn money. And, and I think it's important, we do the best we can to preserve. That aspect of being a business owner, because let's face it, there's a lot of challenges and downsides as well. So we do need to have that joy coming in at some point. So if you're done with waiting for referrals and you're ready to build a system, I just want to let you know that we do have some spaces for one-to-one coaching right now that's working directly with me, 11 hours over 10 sessions, and they'll be starting. At the beginning of October, 2025, running through to the end of the year. So you are in a really good place to not be depending exclusively on referrals as you move in to 2026. If that sounds of interest to you, then I want you to go check out the link in the show notes. If just, even if you're just thinking about it, fill out an application, we can have a chat. I'd love to hear more about your business, and even if we don't end up working together, I'm sure, and I know you're gonna come away with some ideas that you can implement that will help you move forward in a really positive way. Okay, until next time, bye-bye.