No more word of mouth. No more referrals

I often review agency pipelines with founders in order to better understand what specific actions we can take to fill that pipeline with more high-quality leads. The aim is to understand what is working and identify what is replicable, which starts by asking where each lead came from.  Two phrases constantly get in the way of this: “Word of mouth” and “Referral”.

Agencies love to share how their work all comes from these two sources, but I’m on a mission to eradicate them from CRMs. “Word of mouth”, “Referral” : They sound positive.  We are trained to think of them as the holy grail of marketing – free leads that close easily because we did good work. In reality they are both terms that are just comfortable ways to say “I don’t know where this business came from”.

These weak terms treat new business as something that happens to you, rather than something you created . This conveniently absolves us of responsibility when these loosely defined channels fail to deliver. We become gardeners watching our crops yellow as we wait for rain, when we should be picking up the watering can.

To be crystal clear: I am not questioning the value of these types of referral, just the value of these as labels. 

I’m a firm believer that running an agency means “having Agency” – the ability to exert control over your own future. Market forces (our gardener’s weather) exist, but they shouldn’t dictate your survival. We can start getting that control back by better understanding what drives business now, which means recognising the specific activity that led up to an opportunity.

Labels like “Word of mouth” or “Network” don’t do that. Every lead labelled like this came about in some way because of some specific action you took. That is what we really need to understand, because it gives us an action we can replicate (Or potentially even delegate and scale).

Consider these two opportunities: Opportunity A was a friend of an existing client who recommended you after reading a newsletter you sent. Opportunity B was a recommendation from a consultant who periodically refers work to you. Most agency CRMs are set-up to place both of these in a “Referral” bucket, despite being the result of very different activities. This gives us no actionable information at all.

In the above example I would have labelled opportunity A as “Client nurture” and B as “Partner development”. This clearly aligns the outcome with the activity that drove it.  I know what I need to do more of in order to create more opportunities.

There isn’t one perfect list of source labels: You need to pick labels that cover the activities that happen in your business. Enough of them to give you granular insight, but not so many that you end up with lots of “buckets of one”. I will though give you two special labels to include.

“Not yet known” : Not unknown, but not yet known. Your reminder to try to fill in those blanks.

“Organic inbound” : Because sometimes it just rains. Be careful not to overuse this, but if an inbound enquiry does come from your general reputation without any attributable action then you do need an appropriate label.

What’s the point? Isn’t this just semantics?

Far from it. Changing these labels isn’t just about tidying up a spreadsheet; it is about confronting the reality of your business model.

When you label a lead “Word of Mouth,” you subconsciously treat it as free. It feels like a lucky bonus that required zero input – freeing you from responsibility when it isn’t happening. But when you re-label that same lead as “Partner Development,” you are forced to acknowledge the truth: that opportunity came because you spent three hours at lunches last month, sent four helpful emails, and consistently nurtured a relationship (and that this business won’t come if you stop doing these things).

It didn’t cost zero. It cost your time – the most valuable resource in a founder-led agency.

Tracking the results you get from the time you invest throws light both onto where to invest time for more results, but also where your agency is still reliant on your personal efforts.

Your Next Step

You don’t need to overhaul your entire CRM history today. Start small with a retroactive audit.  Look at your last quarter or two of won deals. Ignore what the dropdown menu currently says and ask yourself: What was the specific activity that made this opportunity happen?

• Did it come from a client you actively checked in with?
• Did it come from a consultant you took for coffee?
• Did it come because you spoke at an event?

Once you see the real drivers, you stop waiting for rain. You pick up the watering can, and you go to work on the things that actually move the needle.