Referral Engine - Duct Tape Marketing

Tag Archives for " Referral Engine "

What Are Referral Champions and How Do You Create Them?

What Are Referral Champions and How Do You Create Them?

Every business owner knows that the key to generating referrals is creating a positive customer experience. When someone has a great interaction with your brand, they’re more likely to go and recommend you to their friends or colleagues.

One recommendation can mean a lot to your business, but what if you could turn that happy customer into a referral champion: someone who refers your business again and again?

It is possible to foster relationships with clients so that they become referral champions. Read on as I take a look at the steps to nurture these relationships and keep customers referring your business for years to come.

What is a Referral Champion?

Simply put, a referral champion is a happy customer who refers your business to more and more friends. Of course, there’s a bit more to it than that. A referral champion is likely someone who’s had more than one interaction with your business. A customer wouldn’t necessarily recommend a dry cleaner after visiting the shop just once, but if they take their shirts there each week to be cleaned and are consistently happy with the results, they’ll be more likely to suggest the business to a neighbor.

The other alternative is that it’s someone who had a truly remarkable experience with your business. Back to the dry cleaning example: a woman has a formal event this evening. She’s gotten a black ink stain on her cream wool dress, and it needs to be cleaned by that night! Her regular dry cleaner is way across town—she doesn’t have time to get there—so she turns to you. You’re able to remove the stain and have the dress ready to go by 5pm. That’s the kind of exceptional experience that may lead her to refer you based solely on that one interaction.

This is why you often hear me talk about the importance of creating an amazing customer experience. Whether someone is going to use your business just once or come back again and again, the experience must be high each time. It can be the first step to establishing a great referral champion relationship.

How Do You Find Them?

So now we understand what a great referral champion looks like, but how do you identify your potential referral champions from amongst all your customers? This is where calculating Customer Lifetime Value (CLV) comes in. The CLV represents what a customer will be worth to you over the entire lifetime of your interactions; this takes you beyond looking at a single transaction and helps you to see the bigger picture.

We’re able to take that formula a step further to include a customer’s referral value (CRV) as well. V. Kumar, a professor at Georgia State University’s J. Mack Robinson College of Business, and his colleagues offer a comprehensive approach to calculating CRV, which allows you to identify the number of referrals you can expect to get from each customer based on their prior behavior.

The formula also takes into account whether or not those referrals would have found you on their own without their friend’s recommendation. If that customer would have done business with your company anyway (which surveys showed was the case about half of the time), then the overall value of the referral is lessened.

Make it Easy to Become a Champion

Now that you understand the nature of your relationship with each customer, you can begin to get strategic about how to create the strongest referral champions possible. Some of your customers have a high CLV—they’re doing a lot of business with your company—but they haven’t yet become strong referral champions. Most happy customers say that they’d be willing to put in a good word for a business, but not all of them follow through.

In order to create referral champions, you want to make the referral process as simple as possible. Your customers are busy people and don’t have time to search for ways to refer you. You need to put that information front and center. Call to action buttons on your website, links to your Yelp or Facebook profiles in your email signature, and simple forms that ask for as little information as possible will all reduce friction in the referral and review capturing process and will drive your happy customers to share their positive feelings toward your brand.

Take Care of Your Existing Champions

There are some customers that already have a high CLV and CRV—they’re giving you a lot of their own business and are consistently referring you to friends. For customers like this, you want to be showing your appreciation for both their return business and steady referral stream.

There are a number of things you can do to thank them. Consider hosting an exclusive event for your best customers. Present them with a coupon to use on their next purchase, or with a gift card to their favorite local shop. Send them a free copy of your latest white paper or eBook on a topic they’d be interested in. Even a personalized phone call or email can go a long way.

The important thing here is to make sure you’re keeping the customer experience highly personalized. Your best customers don’t want to feel like they’re getting generic communications—they went out of their way to refer you, so you should go out of your way to send them a meaningful thank you.

Incentivize the Process

Whether someone is already a strong referral champion or is a happy customer with the potential to become one, instituting a referral program can be a good way to ensure that your customers continue referring your business well into the future.

There are a few tricks to creating an effective referral program. Make sure that the offer you’re making is one that customers will actually find beneficial, and create incentives for both the person doing the referring and for their friend. This will make it all the more likely that once that friend becomes one of your customers, they will turn around and refer one or two of their friends.

Referral champions are invaluable to your business. Each and every referral counts, so when you’re able to create a customer that generates multiple referrals over the years, that’s like striking gold. Keeping the customer experience high, making it easy to refer their friends, and going the extra mile to provide personalized service are the hallmarks of an effective referral champion program that will keep you in business for many, many years.

If you liked this post, check out our Small Business Guide to Referrals.

What Sales Looks Like Through Each Phase of the Customer Journey

How to Add Sales to Each Stage of the Customer Journey

When you think of your business’s sales strategy, you may be tempted to think of it as only relating to the actual transaction where a customer pays for the good or service you offer.

However, businesses today can’t think of their relationship with their customers as a linear one. Instead, people have the opportunity to interact with your brand in a wide variety of ways: on your website, in-person, over the phone, via email, in Google search, or on social media. And they go through different phases, from just coming to know of your product to (hopefully, eventually) being a return customer who refers others to your business. The sum of all these interactions with your brand is what we call the customer journey.

Because this journey is not a straight road, your sales team can play a role in each phase of the journey. As you think about building an hourglass that addresses marketing needs for prospects and customers at each phase, you should also consider how your sales team fits into the hourglass model. Whether someone is hearing about your brand for the first time or is making their 50th purchase, your sales team has something to offer them.

We’ll take a look at the stages a customer goes through on their journey of interacting with a brand, and how sales can play a role in each phase.

Getting to Know You

When someone is just encountering a brand for the first time, you have a tremendous opportunity but also a great responsibility. They know nothing about your business, so it’s up to you to create a cohesive image that quickly, easily, and clearly communicates who you are, what you do, and why you do it better than anyone else in the game.

These early stages of brand discovery—the know and like phases of the hourglass—are often thought of as the territory of the marketing team. Creating advertising campaigns, compelling calls to action, and social media profiles fall under their purview, but sales has a role to play even this early on in the customer journey.

Outbound marketing efforts may well include your sales team. If you undertake telemarketing or cold calling, have a booth at a trade show, or have a giveaway of branded items at a community event, these are opportunities for your sales team to be the first point of contact with prospects.

While outbound marketing techniques have become less popular in recent years, if it’s done correctly, it can help you to create positive associations with your brand in the minds of prospects. The key here is in making sure that you have a sales team that’s comfortable with having a conversation that touches on the important differentiators for your brand, but at the same time doesn’t feel scripted. With the right sales team in place, it’s possible to create positive personal connections with prospects immediately, and that really allows you to stand out from your competition that’s relying solely on inbound techniques.

Coming to Trust You

A recent survey from Wantedness.com found that, in the U.S., 79 percent of consumers said they would only do business with brands that show they understand and care about “me.”

The trust and try areas of the hourglass are where there’s the greatest crossover between your marketing and sales teams, and so they should be working in tandem to create that highly personalized approach. In order to be most effective, they need to have access to each other’s information: sales needs to share their CRM data, while marketing should provide a window into their analytics.

While some prospects will react well to personalized email campaigns and targeted paid advertising on Facebook, all managed by the marketing team, others will need a bit more hand-holding from someone in sales.

Having a call to action button on your website that makes it easy for prospects to request a demo and get in touch with a member of your sales team can help funnel those prospects that need a little extra attention to the appropriate salesperson. Additionally, creating a shared inbox for your marketing and sales teams will allow your marketing folks to easily hand off prospects that would like more, detailed information to the sales team.

The Moment of Truth: The Purchase

This is what the sales team has been waiting for. After playing a role in introducing prospects to the brand and being responsive to their questions in the trust and try phases, the prospect is finally ready to convert.

Of course, the buying phase of the customer journey where the sales team plays the most obvious role. It’s also a point that some business owners take for granted. Just because someone has become a customer does not mean they can now be forgotten.

As Joey Coleman and I discussed in a podcast episode, creating a standout customer experience is an important part of taking people from one-time customer to repeat client. The sales team needs to make sure that the first time someone buys from you, they have an optimized experience. That means automated updates on their purchase, an easy way to get in touch if there’s an issue, and a proactive approach from you.

If your sales team is able to provide a stellar experience for a customer’s first time buying from your company, they’re a lot more likely to come back again. The trick here, of course, is that the stellar experience needs to be repeated on each subsequent interaction. Your sales team can never take a customer for granted, because if they do, that customer will eventually drift away to a competitor.

Part of the trick here is to establish crystal clear processes for your sales team’s interactions with customers. Make sure you have a customer service platform in place to ensure that any issues are being addressed in a timely manner and that efforts are not being duplicated (which wastes your team’s time and frustrates and confuses your customer). Consider a platform like ZenDesk, which allows you to track customer support requests across channels.

Building a Referral Engine

The final stage of the hourglass gives your customers the opportunity to generate new leads for you. When you empower your sales team to effectively generate referrals, you can build an engine that fuels your business growth for years to come.

Encourage your sales team to be proactive about gathering referrals. If they have a positive interaction with a customer, have a formalized process in place for getting a written review from that person.

Customers will also be more likely to refer you if you remain top of mind. Your sales team should be using a customer data platform to track interactions with customers. If you haven’t spoken to one in a while, have your sales team reach out. A personalized email or phone call might not only bring them back to make another purchase themselves, it will also position you to be the business they recommend later in the week when their friend happens to ask if they know a company that does exactly what you do.

If you think of your sales team as a group that only springs into action the moment someone wants to make a purchase, you’re missing out on the enormous potential that they have to support your business throughout the customer journey. When deployed correctly, your sales team can be by your customers’ sides each step of the way, which only serves to strengthen their relationship with your brand and makes them more likely to establish long-term connections with your business.

If you liked this post, check out our Small Business Guide to Sales.

referral generation

Create a Referral Engine That Works Every Day

I’ve written about this topic many times, but it just never get’s old! (Check out the referral marketing archive on Duct Tape Marketing) The fact is, although I’ve been writing about the idea of referral generation for years, it always remains relevant, no matter what marketing trends and technologies come and go.

Getting referrals can often seem like a daunting task for marketers, but it doesn’t have to be. I’ve put together a list of recommendations you can use to teach your clients how to build referrals (not to mention teach yourself a thing or two).

Teach referral generation

It’s imperative that you teach people the best way to refer you and that you teach your clients how to build referrals (hint: showing them this blog post may be a good place to start). You need to make it easy for people to refer you. If there is any ambiguity, your chances of losing a referral drop significantly.

Let your customers know exactly what your marketing action steps will be if they refer a lead to you. In some cases, your lead sources will be motivated by rewards, but mostly they want to know you appreciate their efforts.

Build a team of champions

I’ve found that the greatest source of lead generation is a happy customer. A happy customer is much easier to turn into a referral champion than an unhappy one.

As your champions refer your business, be sure to do something that makes them feel special, such as a referral appreciation event, or sending a referral source a gift card to their favorite coffee shop. When it comes to showing your champions you care, a little bit can go a long way.

Look for moments of truth

Any time you get a review, testimonial, or compliment, get a referral out of it. Keep in mind that once you’ve set the referral expectation, you still have to deliver the goods and delight the customer.

Make sure you build and document your process for actually collecting these leads.

Create a review funnel

As mentioned earlier, it’s important that you make it as easy as possible for customers to refer your business. Consider using a tool, such as Grade.us, that makes it simple for customers to write reviews for 3rd party sites, like Yelp (see Grade.Us example below). A review funnel takes the guesswork out of giving a referral and just naturally takes your customer to a place where giving a referral is simply just the next step in the process.

review funnel

review funnel

Stay top of mind

Once you have a happy customer, it doesn’t stop there. It’s important to stay top of mind with your customers and delight them. Finding ways to do more business or get more referrals from your existing customers is a smart way to build a business.

To make sure you don’t ignore your customers, which unfortunately happens more often than not, consider creating a calendar of contacts and finding a way to make certain that your customers, referral sources, and hot prospects never go more than a month without some form of contact.

Stay top of mind by sending emails with referral incentives, holding referral-based contests for people – the sky’s the limit. Be creative with how you want to engage your contacts to get those referrals.

Additionally, it’s amazing how far a simple phone call can go. If you haven’t spoken to a valuable contact for over a month, call them to check in and see how they’re doing. A personal touch like that can go a long way and can help to bring in referrals organically.

Use content for referrals

Great content not only helps people find you and buy from you, it’s also a great tool when it comes to establishing strategic referral relationships. Everyone needs content, so if you can be the partner that brings content to the relationship building table, you win!

When it comes to content, I like using the following five methods to get a referral relationship going.

Invited content – Reach out to potential strategic partners and offer them exposure on your blog. This is a great way to get referred and introduced to a strategic partner’s community.

Co-branded content – If you’ve created a “must have” piece of content in your own lead generation efforts, take it to potential and existing partners and offer to let them send it to their community and cobrand it with their contact details. It’s a win-win!

Sponsored content – One of the most powerful ways to get referrals is to get asked to present your expertise to a room full of your strategic partner’s best clients.

Curated content – Select a big topic and bring in partners who are willing to introduce their networks to a day-long event. Fill the event with partners that will equate to a group referral.

Incented content – Something as simple as a photo or video contest rewarding the person who gets the most votes is an effective way to create some buzz while getting some great referrals.

Have you started implementing a referral program at your business? What are your favorite tactics to use to bring in referrals?

Many of the ideas in this post receive even more coverage in my Wall St Journal best-seller – The Referral Engine.

If you liked this post, check out our Small Business Guide to Referrals.

16 The Referral Multiplier Effect

This post is a special Make a Referral Week guest post featuring education on the subject of referrals and word of mouth marketing and making 1000 referrals to 1000 small businesses – check it out at Make a Referral Week 2010

David Meerman ScottAfter I read an early copy of John’s terrific new book The Referral Engine, it got me thinking about how really great online information makes the job of referring a friend, colleague or family member to somebody a simple process.

Think about your own referrals. How many of them happen via an electronic mechanism (email, Skype, Instant Message, LinkedIn, Twitter, and so on). If you’re like me, nearly all of your referrals happen this way. Somebody will email or tweet me something like: “Hey, I’m looking for a great Web designer, do you know anyone?” How easy it is to just send a link to a Web designer’s work and some contact information!

Most businesses aren’t like Web designers, though. We don’t have our stuff available for easy access. But this problem is easily solved. All you need to do is create something amazing on the Web—a YouTube video, a blog, an ebook, some photos, graphs or charts—something that people are eager to share with others (something that makes referrals easy).

Make it free with no registration gates of any kind

There is no doubt that free information made available on the Web creates a referral multiplier effect. When you make it easy for people to point to something interesting that tells your story for you, many more people will talk you up with their friends, colleagues and family members.

Sadly, most people put brakes on their referral engine by requiring an email address (and other personal information) prior to permitting people to download content (such as a white paper). The thinking is that with a gate, each person downloading becomes a valuable sales lead.

When you remove the gate and allow the completely free flow of information with no registration required, immense value comes from many more people consuming and spreading your content and referring you to others.

For example, my most popular ebook The New Rules of Viral Marketing: How word-of-mouse spreads your ideas for free has been downloaded over one million times.

Every week someone contacts me to say that they learned about my ideas first when someone referred them to one of my free ebooks. There is no doubt that if I required registration, I would not have a referral engine.

I’m always interested in metrics from other organizations. For example, John Mancini, President of AIIM—a non-profit organization representing the users and suppliers of document, content and records management technologies—released an ebook called 8 Reasons You Need a Strategy for Managing Information — Before It’s Too Late. AIIM also made their ebook totally free, with no registration required.

In just the first month of release, the ebook was downloaded 5,138 times. In addition, AIIM also created a presentation version of the book and posted that, also with no registration, on SlideShare. This version has had 3,353 downloads for a total of 8,491 downloads in the month. Pretty darned good result, for the first month of an ebook, I’d say, and each one a potential for a simple and easy referral.

“Making the e-book available for free and totally without registration was a new approach for us,” Mancini says. “These results for unfettered access are particularly impressive when considered against a couple of more traditional examples (i.e., content requiring a registration on our web site).”

So create some great content, make it totally free with no registration required, and encourage people to share. Your referrals will multiply immediately.

David loves it when people refer to his keynote speech video

David Meerman Scott is a marketing strategist, keynote speaker, and seminar leader and author of the best selling book The New Rules of Marketing and PR. The book is a BusinessWeek bestseller published in 24 languages.