have a number of different divisions or products aimed at similar
customer segments where referrals can be generated between them.
For example, many organizations within the banking and insur-
ance sectors have a relatively low level of product cross-sales. One
large insurance company has an average of 1.2 product sales per
customer. This company is hierarchically structured and the prod-
ucts are sold within different divisions. These divisions hold cus-
tomer information on different databases, using different software
and hardware and different legacy computer systems. There has
been no attempt to create a data warehouse so that information on
customers can be readily shared. Creation of a data warehouse pro-
vides an opportunity to develop a platform of customer-based
information systems rather than product-based information
systems. By having customer-based information residing in a data
warehouse, there is often a great opportunity to initiate internal
referrals of existing customers within one division who have the
potential to be sold products or services by another division.
Within professional service firms, the opportunity for internal
referrals is enormous. Whilst some organizations are starting to
develop reasonably sophisticated internal referral systems, others
have a long way to go. One of the problems is that separate practice
areas such as audit, taxation and consulting in an accounting firm
tend to operate within ‘silos’ and often there is not a cross-functional
or cross-departmental view of the customer. In many accounting
firms the audit departments carefully guard their major audit cus-
tomers. They may be suspicious about the quality of work done by
their management consulting practice area and may be concerned
that a referral of business to their consulting colleagues will result in
the basic audit relationship being put under threat if the assignment
does not work out.
A final group of referrals are those made by former staff members
who have left the organization. Former staff members may be a
useful source of business referral for certain sorts of organizations.
Again, professional service firms provide a good example of where
their former staff are used to generate referred business. When the
staff of major management consulting firms such as McKinsey & Co
and Andersen Consulting and accounting firms such as Price
Waterhouse and KPMG leave these firms, they often take up senior
appointments in industry. Firms such as McKinsey & Co and some
of the ‘big six’ chartered accounting firms place considerable
emphasis on these ‘alumni’ and run a number of regular activities to
The referral and influence market domains 233