Marketing digital

The Art of Referral Marketing

May 13, 2010 -
John Jantsch is a marketing and digital technology coach, award-winning social media publisher, and author of Duct Tape Marketing: The World's Most Practical Small Business Marketing Guide and The Referral Engine: Teaching Your Business to Market Itself. He is the creator of the Duct Tape Marketing System and Duct Tape Marketing Coach Network that trains and licenses small business marketing coaches around the world. In this interview, we dig into the strategy and tactics of getting referrals.

• Q: What’s the difference between a referral and a sales lead?
• A: A sales lead is someone that has responded to a sales message or call to action while a referral is generally someone that’s been introduced to your message by a trusted friend or colleague.
• Q: Why do people make referrals?
• A: People make them for a variety of reasons, and it’s important to understand each motivation. They make them because they want to help their friend. They make them because they want to see the business they are referring make it – they like them. They make them to be seen as a “go to” person for resources and they make them to store up goodwill for when they might need one.
• Q: Why do so few companies systematize referrals?
• A: It feels counterintuitive to create a system for referrals, but I also think that it stems from the fact that people tend to think referrals happen accidentally or least in a way that they are not in control of. In my experience, they happen because a company is worth talking about, but they can happen more if you create a system that makes that act easier to do.
• Q: What’s the best platform for referral marketing: website, blog, Facebook, Twitter, or LinkedIn?
• A: It’s some combination of all of those and a healthy dose of hugs and handshakes. Social media tools can greatly enhance the speed and which in person engagement happens. An active blog is a tremendous trust builder because it allows a referred source to find you when they search and then find plenty of information that they can use to sell themselves on your expertise.
• Q: What place, if any, does monetary compensation play in referral marketing?
• A: In a low dollar transaction business, it can help someone choose to refer your products. Most businesses that rely on referrals, however, are going to get a much higher quality referral if the person making the referral is motivated for social rather than financial reasons. Having said that, appreciation is one form of payment that must go hand in hand with your referral system and every once in a while buy a dinner and some flowers.
• Q: How should you ask for a referral from your customers?
• A: By setting the expectation in the lead conversion process. Introduce the idea of passing value to friends and colleagues before a prospect ever becomes a client. Let a prospect know you intend to create a remarkable result, create a remarkable result, communicate that value achieved and then help them understand the value in introducing your organization to others who need that same result
• Q: How should one give a referral?
• A: The first order is to build a network of “best of class” resources for everything your clients may need. Then actively seek opportunities to create exposure for those partners through content and community. Get involved in the process of giving and follow-up to make sure a good shared result was achieved.
• Q: What are the elements of a good referral website page?
• A: A website is a great tool to use to educate those who want to refer your business. Tell them how to spot your ideal client, tell them how to best explain what you do best in simple terms, tell them the kinds of things your ideal clients say that would indicate they need what you do, and finally, tell them your entire marketing process once they refer someone to your business.
• Q: What if your product hasn’t launched yet—how do you tap referral marketing?
• A: Start by researching and finding the business partners that could, either by reputation or referral, be a part of your dream team platform. Look for ways to interview them, ask them to guest blog, and teach you the best way to introduce their business to your growing network of prospects. This group will prove invaluable when you do launch.
• Q: What do employees need to make referral marketing work?
• A: They need to know it’s okay to deviate from the system when trying to create a great customer experience, they need be taught how to spot opportunities to get people talking about the business and they need to be rewarded for generating testimonials, success stories and referrals.
To learn more about referral marketing, be sure to read The Referral Engine: Teaching Your Business to Market Itself and follow John on Twitter at @Ducttape.
Tags: alltop, customers, duct tape marketing, guy kawasaki, how to change the world, john jantsch, referral marketing, referrals, social media, website