Marketing Podcast with John Jantsch
In this episode of the Duct Tape Marketing Podcast, I’m doing part one of a solo show series on where I’m going to be covering one of my favorite topics: referrals.
In a recent Texas Tech Survey, out of 2000 consumers, 89% of them claimed they had a business that they loved enough that they would gladly recommend — only 29% of them actually did it. Why is there such a gap? One of the main reasons is that they just aren’t being asked to.
In this series, I’m presenting what I’m calling the seven grades of referral fuel. I’m unpacking the first of seven specific tactics or approaches that are sure to help you generate more referrals for your business.
Topics I cover:
- [1:22] The seven grades of referral fuel
- [3:59] Why people don’t refer businesses they love
- [5:23] Referrals remove decision-making risk
- [6:54] How getting referrals affects the lifetime value of that newly acquired customer
- [8:53] Introduce the idea of referrals in the sales process
- [9:58] Figuring out your customer success quotient
- [12:42] Focusing on every customer interaction
Resources I mention:
- The Ultimate Marketing Engine: Five Steps to Ridiculously Consistent Growth
- The second episode in the series: 3 Types Of Referral Offers Every Business Needs
- The third episode in the series: Grow With Your Customers By Serving Their Ecosystem
- The fourth episode in the series: How To Build A Strategic Partner Network
- The fifth episode in the series: 2 Creative Ways To Fuel Your Referral Engine
- Send me a note – [email protected]
More About The Duct Tape Marketing Consultant Network:
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John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the HubSpot podcast network. Hey, I want to give a shout out to another member of the HubSpot network, the success story podcast, hosted by Scott de Clair. It's one of the most useful podcasts in the world. Success story features Q and a sessions with successful business leaders, keynote presentations, conversations on sales marketing. Hey, and if you're a freelancer, his episode on how to make seven figures freelancing on Fiverr is a must listen to the success story podcast, wherever you get your podcasts.
John Jantsch (00:45): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch. I'm doing a solo show. It's been a while. I'm going to talk about one of my favorite subjects referrals. And in fact, I'm going to do a three or four part series on this. So this is part one to tune in to we'll have them all hooked together in the show notes, but tune into the rest ones, rest of the episodes coming up. So let's, uh, let's dive into this topic of referrals. I'm actually in this series going to present what I'm calling the seven grades of referral fuel. So I'm going to unpack seven specific tactics or approaches to generating more referrals. I'm going to start with talking about kind of offers for all of your clients. You should just have a standard kind of anybody who's a client of yours should get a referral offer three, four times a year or an invitation, I should say three or four times a year to make referrals.
John Jantsch (01:50): But then there's those folks that are already making referrals. They're what I call your referral champions. And you need to treat them, uh, even differently. Then I want to talk about something that is a fairly new concept. Uh, actually you can read more about it in my book, the ultimate marketing engine, but it's something I call it ecosystem balancing. And the idea behind that is to take your existing client and think about everybody else who serves them and find ways to actually create relationships with those folks in an effort to kind of add even more value to your client. That'll make more sense when I get into it, let's face it internal referrals, not enough businesses take advantage of the fact that their employees could be generating referrals for customers. And today increasingly for new hires, uh, some of your best new hires will come from referrals from your existing employees.
John Jantsch (02:47): I talk a lot about strategic partnership networks. And so in that tactic, I'm really going to unpack kind of a very formal way to do it. And then the last two are something I call an expert club, uh, networking, we all know is a great way to generate referrals. So why not own your own networking club? Why not create your own approach to, uh, to bringing folks together. And then finally, I think most businesses, particularly in the B2B world, uh, can and should create what I call a referral mastermind. And this is Ruth. Essentially, you bringing your clients together, teaching them how to generate referrals and, and creating that get together. And that teaching, regardless of your industry, you don't have to be in marketing to do that. I think the financial planner who teaches his B2B clients, how to generate a business is going to actually be the recipient of a ton of referrals.
John Jantsch (03:44): All right. So before we get into today's first one now offer for all clients. I want to set the table kind of the framework for referrals. And I'm going to start by citing a, a recent Texas tech survey of 2000 consumers. 89% of them claimed that they had a business that they loved enough, that they would, that they would gladly refer gladly recommend and only 29% of them actually did it. And so that gap to me suggests that there are many, many businesses out there who have raving fans who have like satisfied, happy customers who are not necessarily telling their friends, neighbors, and colleagues. And I think mostly because they're just not being asked to do so. I think there are some things that, that business owners who are reluctant to ask need to understand, I think at its most basic level, we need to refer in order to survive.
John Jantsch (04:47): You think about, uh, about, uh, as crazy as this might sound, uh, back to caveman times, you know, if we, if we didn't, weren't able to, uh, help each other out, we're unable to tell people where water was, where the saber tooth tiger was hiding out. Um, it was certain depth. And so, uh, there, there is a sense of, of really, you know, I'm going to need some help at some point. So I'm going to, you know, I'm going to make sure that I'm helpful. I think some level we crave kind of the social currency of, oh, so-and-so, you know, always has good answers. You know, let's go find out who they would recommend or what they would do. And I think that's a level of social currency that, uh, at least some of us really enjoy. And then of course, we want to receive referrals as well as give referrals because our referrals remove risk.
John Jantsch (05:37): If I'm trying to make a decision about hiring a company and all I'm doing is looking at their brochure or talking to a salesperson or looking at their website, I might be able to make an assessment. But if a friend of mine says, oh no, they do exactly what they said. It's amazing. You'll enjoy the experience. I mean, that removes a lot of the decision-making risk from a business standpoint. I think Riverdale's matter so much because it actually makes it easy for you to attract ideal customers. Your ideal customers will probably refer somebody who is more likely at least to be in an ideal customer as well. And certainly shortens the sales cycle. I mean, regardless of what you're selling, if somebody can, somebody can go to somebody to say, oh yeah, no, they do this, they do this, they do this. You can trust them.
John Jantsch (06:26): I mean that in many cases allows somebody to say, I'm going to do it. I'm all in. I think when somebody refers a quite often, not only does price go down the list, I think in some ways, some cases they expect to pay a premium or at least at the very least, they're less likely to handle their friends. Sent me. My friend sent me, you know, to you, you've got a great result for them. You know, the last, at least the first thing I'm not going to ask for is, is a cheaper deal or a better deal. So it really pays a impact on pricing. And then, you know, the concept of lifetime value is something I don't think gets talked about enough, but if you have a customer and you acquire that customer and you're able to retain that customer for years, I mean, that means that the lifetime value of acquiring that customer is 10 times maybe what that first sale would be.
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John Jantsch (08:31): So I think that that, that kind of math is something that, you know, hopefully will give you the, the, you know, the real, um, posture, uh, to, uh, necessarily go out there and say, yeah, I, I, I should be talking about referrals. And if you are having a challenge with that, here's a couple of things I suggest first off, just start expecting referrals, start about it in the sales process. So there's not this awkward conversation, somewhere down the road where you come to them and say, Hey, I want to know if you know anybody who needs what we do. I mean, just start talking about it in the very beginning, we know you're going to be so thrilled. That was what we agreed to today, that in 90 days, we're going to come back and I'm going to make sure you're thrilled. And then I'm going to invite you to, uh, to tell me about a couple other people that you know, who need to get this result as well.
John Jantsch (09:24): It just makes the whole conversation so much easier. So talk about it, put it in your newsletter, you know, talk about the people that refer that did send you referrals. Thank them publicly. I mean, that's, that's how you, you kind of just started to get this posture. And really, if you, if you know what you do gets people amazing results. I think you almost owe it to the world to, to help, you know, people, you know, find you. Um, so one of the things that, that exercises that I have a lot of people go through is, is something that I call your customer success quotient, figuring out your customer success quotient. It's not really a hard math problem. Don't worry about it. Those of you that remember basic, basic math, you know, quotion is essentially the, you know, something divided by something. So if you think about the average results, and I know this is harder, if you sell a, a static product and you know, you're not really plugged into like, did somebody get a result, but certainly if you get testimonials, if you get reviews of your products, I mean that in some ways gives an implication of somebody getting the result or getting, you know, being satisfied with what they got, but certainly in service businesses, I mean, I, I sell marketing consulting.
John Jantsch (10:38): I help people grow their businesses. I can very tangibly point to the exact results, uh, uh, you know, over time in terms of growth or, or customer acquisition that they are receiving. And I know what I charge for that. So if you think about my average results divided, by my average fee, I can come up with a number 10 to one, five to one. Um, and when you start doing that, you start realizing, Hey, for every $5,000 you give me, you know, that is going to be worth, you know, some significantly larger amount than I think it makes it much easier for you to say, Hey, here's, here's my feet. You know, here's what I need to charge. One of the things that I th any even casual listener, uh, the show will realize is that I talk about this idea of the marketing hourglass all the time, the customer journey, having some, you know, seven stages, no, like trust, try, buy, repeat, and refer, notice that last stage refer.
John Jantsch (11:44): So the idea behind that is that that's really the ultimate goal of any customer journey is that we are getting people to the stage where, you know, every single one to one of them, you know, once to refer us. So I think that's a point of view that if you work backwards and think, okay, what would it take, uh, for every single one of our customers to want to refer us? The reason I bring this up is because, you know, a lot of times people, when they talk about referrals, they talk about some hack or some tactic. Um, and ultimately when I unpack all of the, in, in subsequent shows, when I unpack all of the approaches to generating referrals, they almost all, no. In fact, they all assume that you are referrable, that you have created an experience that people want to talk about that people want to refer.
John Jantsch (12:43): So if you think about that, hourglass know, like trust, try, buy, repeat, and refer, and you turn that around and say, okay, let's start with referral. What would it take? So that every single person who comes to know about our business, or certainly who becomes a customer of our business would want to talk about us, would want to refer us, because what it would do is not only have you focus on the referral tactics themselves, but what about the experience that somebody has when they first buy? What about their orientation, their onboarding, the communication. What about, uh, the going back in and actually measuring and communicating the results that they get so that they stay a customer so that they buy again and again and again, um, having those processes built are really what leads to your referrability. It doesn't matter how many times you ask somebody, if they know anybody who needs, what you do, if in fact, um, your customers, aren't really getting a result, and it's not just they're getting what they paid for, you're exceeding their expectations.
John Jantsch (13:52): You're surprising them. So that has to be part of any conversation about referral generation than it is simply part of the customer journey. All right, I'm going to be back, um, in subsequent episodes and I'm going to unpack all seven of these, what I call grades of referral fuels. So make sure that you, uh, if you're listening to this, uh, after the fact, uh, after all the shows will be recorded, you can come to the page, uh, the show notes page at duct tape, marketing.com and find links to the other shows. Otherwise, just make sure that you are queuing them up in your podcast, listening device. All right. Take care out there. Love your feedback. Send me email at John at duct tape, marketing.com. Let me know what you're thinking of this series.
John Jantsch (14:46): All right. So that wraps up another episode. I want to thank you so much for tuning in and, you know, we love those reviews and comments. And just generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients, and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That's right. Check out the duct tape marketing consultant network. You can find it at duct tape, marketing.com and just scroll down a little and find that offer our system to your clients tab.
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This episode of the Duct Tape Marketing Podcast is brought to you by the HubSpot Podcast Network.