referrals - Duct Tape Marketing

Tag Archives for " referrals "

How to Build an Effective Referral Program

How to Build an Effective Referral Program

You spend a lot of time and energy winning over new business, and once you’ve gotten that prospect to convert, you work hard to create a positive customer experience.

Rather than going out and trying to find brand new customers all over again, it’s much more time- and cost-effective to turn to the customers you already have, not only for repeat business, but to create a steady stream of referrals when they pass you name along to their friends.

It helps to establish a concrete plan for generating these referrals from your existing customers. This is why establishing an effective referral program is so important. We’ll take a look at what a referral program is, why you need one, and how to get the most out of the program you create.

What is a Referral Program?

A referral program is a systematic approach to generating referrals. This is a broad term that can encompass any number of tactics that you use to encourage and gather referrals, either from existing customers or partner businesses.

Know Your Customer

The first step to creating an effective referral program is really understanding your existing customer. What do they like about your business? What keeps them coming back? When you understand their wants, needs, and behaviors, you can create a referral program that draws them in and encourages them to refer their friends.

Fortunately for you, today’s tech-filled world provides marketers and business owners with a myriad of tools to track customers’ behaviors and solicit input through various online channels. The first step is to decide what you’re hoping to get out of your referral program, and the next step is to turn to the data.

Data can help you see what’s really important to your existing customers and who your best customers are. You should create a referral program that’s centered around what your best customers want. Once you’ve identified these best customers through your data analysis, don’t be afraid to reach out to them with a survey to get their input on how you plan to structure your referral program. After all, if they’re your top customers they’ll likely be the ones who are taking advantage of the program by sharing your name with their friends!

Create a Customer Reward Program

An often-used technique in building a referral program is offering a reward to customers who refer your business. There are a number of different ways to go about creating a customer referral program, but all good programs have some key elements.

  • Offer a reward your users want. This might be a discount on their next purchase, a gift card, or access to a special good or service that other users don’t get. It doesn’t have to be an expensive offer, but it does have to be something that your customers will find useful.
  • Double the reward. Customer referral programs are even more effective when you make an offer both to the referrer and referee. Dropbox very famously did this, offering additional free storage to anyone who referred them and to their friends who signed up as a result of the referral, and this approach led to exponential growth for the company.
  • Be transparent about your offering. Customers don’t want to feel like they’re being bribed into saying something nice about you or passing your name along. Make sure that the terms and conditions of participation are clear and simple, and display them prominently on your website. Not only will this likely lead to customers you hadn’t expected participating in the program, it also gives customers a sense of ease.
  • Make it easy. If your rewards program is hard to find out about or difficult to sign up for, then what good is it to you or your customers? Trumpet your referral program on your website, via email, and on social media, and be sure you’re up front about the terms of participating. Make the criteria for joining the program easy to understand, and make the sign up process as simple as possible.

When you create an effective customer referral program, you can more easily create referral champions: enthusiastic customers who will refer your business over and over again!

Encourage Online Reviews

When you think of online reviews, you may feel that it only applies to businesses in certain industries, particularly those businesses that are B2C. The fact is, though, that in today’s online world every business should be concerned with gathering reviews online.

More than 90 percent of consumers look to online reviews for guidance before making a purchase. If you’re not being reviewed online prospects might not even know you exist, or they might write you off as illegitimate because of a scant online presence. Not only that, but your online reviews factor into your SEO ranking, so if you’re not gathering reviews, then Google doesn’t notice you, either.

Include links to your online review pages in follow-up emails to customers, asking them for feedback on their purchase. Of course, part of soliciting reviews is knowing how to deal with unfavorable ones. It’s actually okay to have a few bad reviews—otherwise prospects begin to worry that your “reviews” are all from shills—but you do need to directly address complaints in a timely, considerate, and appropriate manner.

Engage Other Business Owners

The only thing better than building a referral program on your own is building a referral program with another small business owner. As a fellow entrepreneur, they face the same challenges and have the same goals. Why not team up to divide and conquer in your efforts to build a referral base? Finding business owners who have a similar customer profile to yours allows you to tap into their existing network—and vice versa—so that you can double your pool of prospects overnight.

These strategic partnerships work best when the business owner is someone you yourself know and trust; you’ll be recommending their business to your valued customers, so you want to be sure they’ll be providing the same excellent level of service your clients have come to expect from you.

Reevaluate Your Approach

It’s no small feat to get a referral program up and running, but once you’ve established your program your work is far from over! You want to track the results of your program and make changes as appropriate.

Keep track of where your prospects are coming from. Are they finding you through online reviews on Facebook or Yelp? Are they coming directly through your customer referral program? Did a current customer forward them your email newsletter? Has your partnership with another local business resulted in conversions? Understanding how people are finding you allows you to adjust your program accordingly.

If your customer referral program hasn’t taken off, maybe it means you need to market it more effectively. Send an email blast out to existing customers letting them know about it, and include a link in your email signature for people to refer a friend. Or perhaps it’s an issue with the reward; try making a different offer in the coming months and see if your numbers pick up.

You’ll also want to monitor your customer acquisition costs. Hopefully your referral program is driving those costs downward; it should be costing you less to acquire customers via referrals than it would be to go out and approach an entirely new cohort through outbound marketing tactics. If you’re seeing your costs rise or stagnate, that’s another sign that you need to revisit your approach. Perhaps the reward that you’re offering is too costly for you to take on, or maybe your strategic partner’s business is not as well aligned with your business as you had hoped, and you’re not getting the proper number of referrals from that relationship.

Building an effective referral program doesn’t happen overnight. You first have to understand your existing customers—what they want and need—and then build a program that encourages them to spread the good word about your products or services. And then there’s the work of maintaining the program, checking in on your results and making changes along the way. It take some effort, but when you land on an approach that’s effective and generates repeat results, you’ll feel a great sense of accomplishment and see the benefits in your bottom line.

Why Partnerships Are Your Secret Weapon to Building Referrals

Why Partnerships Are Your Secret Weapon to Building Referrals

Generating referrals is the key to securing your business’s long-term success, and it can feel like a pretty massive undertaking. One way to lighten the load and help you to create a more sustainable stream of referrals is to build partnerships.

Why go it alone when you could instead join forces with other business owners and make the referral process easier for both of you?

Types of Partnerships

When you’re thinking about establishing partnerships for your business, there are a few different types of relationships to consider.

  • Strategic partners. These are businesses or individuals who provide a good or service that is directly tied to your business’s product offering. If you’re a graphic designer, you want to have a trustworthy copywriter who you can suggest to your clients.
  • Content partners. A network of publishers, bloggers, and those in need of content for their own sites can help you to spread your business’s name, mission, and unique point of view to a whole new audience of people.
  • Co-marketing partners. These are business owners whose business models have some sort of synergy with your own company. If you’re a plumber, this person might be an electrician or contractor. If you own a wine shop, this might be the owner of the cheese store down the street. As a fellow business owner who’s not in direct competition with you, but does business with a subset of the population who might also have an interest in and need for your business’s offerings, these relationships offer easy cross-promotion opportunities.

Bonus points if you can create partnerships that are unexpected like the ones I outline here; unique partnerships can generate even more marketing buzz!

There are a variety of reasons to consider each type of partnership, and there’s a different value-add that comes from each one. That’s why it’s important to focus on building up a comprehensive network of partners, with different partners from each type of group.

Become a Trustworthy Guide for Your Customers

No matter what business you’re in, there are a lot of other businesses out there that do what you do. While a key part of standing out from the crowd is making sure you have a clearly defined value proposition, another thing that will keep customers coming back again and again is that they see you as more than just a provider of a good or service—they see you as a trustworthy partner and advisor.

One way to become a trusted partner is to tap into your network of fellow business owners who you yourself know and trust. When you’re able to suggest other service providers to your customers, it makes you seem like someone who’s in the know and who truly has your customers’ best interests at heart.

Let’s say, for example, that you own a rare used bookstore. A customer comes in and buys a first edition of a work by their favorite author, but then they want to be sure they’re going to be able to care for their new, beloved purchase. You should be able to provide them with a list of trusted partners—a bookbinder who can help restore the original leather cover, a vendor of special boxes for book storage, or an appraiser who can help set the sale price for another rare book in their collection.

These partners need to be people that you know and trust; you’ll do more harm than good if you suggest another business who does not do right by your customer. But if you do have a strong network of other worthy businesses who can provide a service that’s of real value to your existing customers, then you establish yourself as a trusted source of knowledge in your industry, and the next time your customer is looking for advice or to do business, they’ll be coming back to you.

Move Up the Hourglass

There is a lot of work that goes into winning over new business, particularly if you’re starting from scratch. For someone to decide to go with your company, there are four steps in the marketing hourglass before a new customer even makes their first purchase. And there is a tremendous amount of effort and money that can go into those first four steps.

For someone to come to know and like your business, there are marketing and advertising dollars to be spent. To establish trust, you need testimonials. For the trial phase, you need to create products or services that you’re willing to give away for free in hopes that it converts your prospect into an actual customer.

Establishing partnerships, however, allows you to leap over the heavy lifting associated with these steps. You don’t need to spend excessive amounts of money on advertising and marketing to prospects when you have a solid partnership network who will refer their customers to your business.

A prospect who has been referred to you by a business owner they already know, like, and trust, will have an inherent level of trust in your business. This allows you to jump ahead and move right to the try and buy portion of the hourglass.

Double Your Network Overnight

As the old saying goes, two heads are better than one, and that’s particularly true when building up referrals. You’ve worked hard to create repeat customers, and new customer acquisition is a costly endeavor. You know that other small business owners have put a lot of blood, sweat, and tears into creating their own roster of return clients. Why not come together with a fellow entrepreneur to double your network overnight?

When you establish a strategic or co-marketing partnership, suddenly you have access to another business owner’s entire rolodex. There’s no competitiveness there, because you offer products that are related but different, and so you’re willing and able to share your existing network with this other business owner.

Additionally, you can consider creating new marketing campaigns that are a joint effort. While you double your reach, you can also halve your costs by splitting advertising fees with your new partner. Running joint promotions for your business can allow you to catch the eye of your established customer base, their established customer base, plus those who are new prospects for both of you.

Referrals are the lifeblood of any business. Why go it alone on this important road to generating referrals when you could join forces with another like-minded business owner? Together, you can help each other to create a sustainable referral engine that will continue to benefit you both in the long term.

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

Five Tips That Make Asking for Referrals Less Intimidating

Five Tips That Make Asking for Referrals Less Intimidating

Asking for referrals can be tough. It can feel like you’re being pushy or imposing on someone’s time. But in reality, the majority of happy customers are more than willing to give a referral when asked.

While the first hurdle in asking for referrals is getting over your own insecurities or mental blocks associated with the process, here are five additional tips that make asking for referrals less intimidating.

1. Provide Great Service

This one might seem obvious, but the first step to feeling good about asking for a referral is providing the best service possible. Of course you’re going to feel sheepish approaching a customer who had a less-than-stellar experience with your company. But if you are honest, responsive, and helpful from start to finish, then why shouldn’t your customer be excited to pass your name along to others?

We’re all human and mistakes do happen. There will be times when a customer has a sub-par interaction with your business. That doesn’t mean that you should run away and consider that customer a lost cause. If you are proactive about reaching out, apologizing, and asking for a second chance to wow them (and then delivering on your promise the next time), you might just create an even more loyal customer. People appreciate honesty and businesses who are willing to go the extra mile, so when you make that effort—even if it’s after an initial mess-up—you should feel confident asking for a referral after you’ve proven your mettle the second time.

2. Start a Conversation

Sometimes it can feel difficult to ask for a referral because it feels like you’re selfishly asking for a favor out of the blue. One way to mitigate this feeling is to establish a meaningful conversation with someone before you ask them for a referral. Send them a congratulatory note when you see on LinkedIn that they reached a milestone in their career. Forward them an article that you think would be of interest to them. Donate to a Kickstarter related to their business’s newest product launch. There are lots of simple ways that you can show support for someone that will make asking them for a referral further down the line feel like more of a part of a conversation rather than a demand coming out of nowhere.

Of course, there is an art to doing this. You don’t want to make a grand gesture of kindness and then turn right around and ask for a referral. No one wants to feel like they’re being bribed into saying something nice about you and your business. But if you show a genuine interest in what someone is doing in their business life, they’ll feel even more open to saying something genuinely kind about you when you ask.

3. Provide Various Ways to Gather the Referral

It’s always best to ask someone for a referral directly; people are far more likely to refer when they’re asked than they are to go out of their way to do it on their own (even if they had a positive experience with your company). However, you want to be sure you’re making it easy for customers to refer you, whether you’re asking them directly or not.

Include a link to sites where customers can provide a review (whether that’s Yelp, Facebook, or a tool like Grade.us) in your email signature. Customers who see this reminder each time they communicate with you might be more likely to review you when they have a spare minute if they’re presented with the opportunity to do so on more than one occasion. You can also create a “refer a friend” button or page on your website. This makes it easy for you to collect referrals from customers by sending them a link to the page, while it also allows customers you haven’t reached out to directly to still submit a referral if they feel so inclined.

4. Create Partnerships

One of the best ways to generate referrals is by creating partnerships with other business owners. They’re facing the same struggles as you when it comes to generating referrals, so it’s easier to ask them for referrals. They understand how intimidating it can be to ask customers to pass your name along, and so they’ll be all the more willing to do so for you and your business (and you will be willing to do the same for them).

Work to find businesses that are providing a good or service that makes sense with the work your company does. If you own a shoe store, talk to the cobbler down the street. If you’re a DJ for weddings and events, speak with the local party equipment rental company.

Asking a fellow business owner for referrals is not only a bit less intimidating than asking a customer, it also establishes a steady flow of referrals. Business owners will continue to come across prospects who are in need of your services, whereas past customers might only meet someone every once in a while who’s looking for the good or service you provide.

5. Be Specific In Your Ask

Some people are hesitant to ask for referrals when it seems like a broad ask: “If you know anyone who needs what I do, let me know!” One way to counter this is to do a little research.

Let’s say you’re a website designer who already has a list of local businesses you’d like to target. You’ve looked at their sites and have some specific thoughts on how to strengthen each of their designs to help them grow their business.

Go onto LinkedIn and see if any of your current clients have connections at these businesses. If so, you then have a specific referral ask that you can make. Reach out to your current client and say, “I see that you know the marketing manager at Company X. I’ve been wanting to get in touch with someone over there about their website design; I’ve got some concrete ideas about how to organize their site that could help grow their sales. Would you be willing to put me in touch with your connection?”

This serves a few purposes. It shows to your current client that you’re serious about your business, know your stuff, and do your research. This makes them feel more at ease in referring you to their connection. It also makes you feel more empowered in your ask. You know exactly what you want, and you’re confident enough in the services you provide to be unafraid to ask for that referral.

Asking for referrals can be scary. But if you provide excellent service to your customers, there’s no need for you to feel shy. People are excited to spread the word about a great business, and if you’re able to drum up the courage to ask for referrals, you’ll be sure to get great new leads for your efforts.

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

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.

make business more referable

How to Make Your Business More Referable

“How can I make my business more referable?” I get asked this question all the time but the question people should be asking is “who do people refer?” Having the answer to that question will better prepare you to take advantage of this powerful marketing tactic.

Having been in this business for decades, I’ve come to the conclusion that people make referral decisions the same way they make purchasing decisions. They decide something is the right price and fits their needs (which is the logical part), and then, they determine they will have more life, impress their friends, boost their confidence, and so on (the emotional part).

Here’s the thing – emotion typically comes first.

In order to increase your odds of getting referred, you need to tap into this emotion/logic formula. People have to believe you can help them and that you will deliver what is promised (logic), but, they must also feel good about helping you, trust that their referral will be treated well, and genuinely like the experience they have with your business (emotion.) The businesses that get the most referrals solve their customer’s problems while also providing a fun or unique experience.

If you are not getting referrals naturally, take a deep look at the previously mentioned formula and how it applies to your customers.

Now, let’s say you run a more serious business, like a law practice, that doesn’t typically have anything fun about it. In this situation, I’d think of ways that your business can make a genuine emotional connection with your clients and make that one of core elements of your business.

I have a lot of opinions on this topic, so below are a few tips I’d recommend implementing to boost the odds of your business getting referrals.

Tips to make your business more referable

Create a referral engine

No, this is not a shameless plug for my book. Creating a referral engine is absolutely essential if you want to bring in consistent referrals for your business. The key to getting more referrals from your existing clients is to create and focus on a referral process that you operate on a consistent basis. Once the process is in place, it will be easier for your customers to refer your business.

I usually suggest that every business build multiple referral programs and offers in each of the following four types.

Direct referrals

With a direct referral program, you simply state to your existing clients an offer for the act of creating a referral that turns into a client. “Refer a friend to our marketing firm and we’ll give you a free website review” is an example of how to use this approach. It’s motivating and describes what the business does.

Implied referrals

This type of referral is terribly underutilized. In an implied referral program you want to do things that make it very obvious you are doing work for someone, without necessarily asking for a referral. This sets up a situation where a friend or neighbor might simply ask you to refer the person running an implied referral program.

Tangible referrals

With a tangible referral, you put something in the hands of your customer that has real value and that they can give to a referral source. The thing we like about this tactic is that you can run it three or four times a year as a low cost, low exposure way to keep referrals top of mind.

Community referrals

There are so many community organizations that need and deserve your support. When you partner with a non-profit player and support their mission, events, and needs you can also offer promotional support by running the occasional promotion that benefits your partner. “When you buy this week or sign a contract this week, 10% of the proceeds go to benefit our community partner” is an example of how this would work.

You can build one program and then simply keep adding to it until you have referrals coming from numerous sources while promoting how referable your business is.

Show your personality and rock the customer experience

People don’t generally remember businesses, they remember other people. Having a personality is essential for getting referrals. When you can develop personal connections with your business, you give them a reason to remember and recommend you to others. Make their experience with your business one that they will never forget.

Target your influential customers and related businesses

Seek referrals first from your most influential customers. Note, these people may not actually be your best customers, but they are the people whose opinions carry the most weight with others.

I’m a huge advocate for building up a strategic partner network for your business, and it’s important to use these partners to boost your referrals. These businesses should provide complementary services to your own.

Build relationships

Building off the importance of strategic partnerships, it’s imperative that you focus on your relationships in an effort to boost referrals. This takes time, but it’s a must because many of your most influential customers won’t provide referrals until you gain their trust.

Offer incentives

Incentives can be tricky. For example, I wouldn’t recommend money offerings alone for referrals as they are poor motivators. Don’t be afraid to test offers to find out what works best. Sometimes trial and error gets you to the best solutions.

I personally believe is far better to work on making your business more likable before you offer any kind of incentive for referrals, but incentives are good to keep in the back of your mind when needed.

Make it easy for people to refer you

Make the ask. What do you have to lose? When you go in for the ask, be sure to do it at the right moment, and that moment is when your customer is likely to be happiest of all, and that is the moment right after they buy something. Use a post-purchase survey online or encourage your customer to write a review. The more you can do to get someone to recommend your business right after purchase, the more referrals you can generate.

Be sure to create tools, education, and follow-up systems as well to rock the referral marketing world.

What makes things catch on?

In Jonah Berger’s book, Contagious: Why Things Catch On, he explains there are six essential factors that make things catch on. These include:

  • Social currency: We share things that make us look good or help us compare favorably to others.
  • Triggers: Ideas that are easy to remember spread. Viral ideas attach themselves to top-of-the-mind stories, occurrences or environments.
  • Emotion: Emotions move us in irrational ways. This means that when we care, we share.
  • Public: People tend to follow others, but only when they can see what those others are doing.
  • Practical: Humans love giving out advice and tips, but especially if they offer practical value.
  • Stories: People do not just share information, they tell stories.

Take a look at the factors above and see how you may be able to apply them to your business (you don’t need to address all of them to be effective, but strive for at least a few.

Wha have you implemented in your business to increase referrals?

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

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.

The true power of referral marketing and how you can use it today to grow your small business fast

Referral marketing, also known as word-of-mouth marketing, is one of the oldest (and still most effective!) marketing strategies out there. It’s basically about people buying your products and services because somebody they trust recommends it to them.

Word-of-mouth is a subtle process that is present everywhere in our daily lives. The reason for which a lot of small businesses are not considering it more is because of the simple fact that it’s not that visible like a TV commercial for example (I like to call this the “Super Bowl effect”).

Nevertheless, study after study, word of mouth always shows up like the most powerful form of promoting your business. Just look at the numbers below, from a study performed by the Nielsen Company (a leading global provider of information and insights into what consumers watch and buy).

Basically, the graph shows that 90% of consumers around the world say they trust word-of-mouth from their friends and family above all other forms of advertising. Also, 70% of them trust other consumers’ opinion posted online. These numbers alone are gold and speak volumes about the power of this (sometimes disregarded) marketing channel.

But why makes referral marketing that special?

1. It comes with the persuasion factor already included!

Think about that: when was the last time you went to a new restaurant because your friend couldn’t stop talking about how good the food was when he went there? Or what online program (course or mastermind) have you bought after seeing the amazing results another small business owner had after signing up and implementing what he/she learned? If you are like me, I bet there were a few!

So, basically, referral marketing works that well because people trust the opinions of other people they respect and love, like their friends, family or other people they admire.

2. The laser targeting aspect of referral marketing!

If you tried (or want to try) Facebook ads, you know that if you don’t get your target audience right, your entire ads budget will go to a waste! It’s like throwing spaghetti on a wall with your eyes closed and just pray that some of them will stick!

But with referral marketing, all the targeting is magically and perfectly done for you. Many of your clients will recommend you are amazing products and services to those friends and family members (and social media followers) that WANT it and NEED it the most. So you see? Your targeting can’t get any better than this (and without any efforts on your part whatsoever!).

3. The reach of referral marketing today can be crazy high.

I remember that several years ago (ok, many years ago!), when I was a little girl, my father would not hire any handyman to do work around the house unless it was somebody highly recommended by a friend. So every time he needed one, he picked up the phone and called at least 10 friends before getting a referral.

But today, if I need to urgently buy a laptop or if I want to try a new gym or if I want to hire a trusted virtual assistant, all I have to do is to post my message on social media (to my friends or in the groups I am part of). I will have a reply in the next 10 minutes or so.

With a simple Facebook post or the Instagram selfie, everybody can reach hundreds of (trusted) people in just seconds. This is also valid in the opposite way: a very good testimonial about your brand or products/services, posted on social media, will reach hundreds (even thousands) of potential clients in minutes.

Ok, so we covered why referral marketing is so effective and why you should use it to grow your small business fast with zero impact on your (small) budget.

Now let’s see exactly HOW you can take advantage of this massive opportunity. Because all the theory is useless unless it comes with a plan to implement it.

But first, let’s get clear on a fact: your business will not benefit if your only referral sources are only your close friends and family, right? There are also other sources of information that are trusted by the average consumer today and that can also bring you more sales that you can handle (nice picture, right?).

And these sources are:

  • customers’ opinion/reviews posted online and
  • influential bloggers in your niche.

Then, please note that you, as a small business owner, have a huge advantage over any big company out there: you are much closer to your customer and you can deliver your personal attention to each of them and thus make them feel special for being your clients. And this is one of the most effective ways to benefit from the word of mouth marketing.

With that huge advantage in mind, here are the best ways to use referral marketing to your advantage:

1. Focus on one thing: having a very good product or service.

If your product is not doing a good job at solving your clients’ needs, not only you will not gain any advantage from word of mouth, but you are going to even turn it against you. Because if a good testimonial can reach people in minutes, a bad one will only need a fraction of a second! Bad news always travels the fastest.

2. Make it personal.

Get to know your clients, remember their names and purchasing habits, start a conversation with them and know more about their status and their desires, greet them like you would greet an old dear friend – all this will make them feel welcome and special. And this type of feelings always leads people to share it with everyone they know.

3. Exceed their expectations.

If you want to really achieve stellar business results fulfilling your clients’ needs is not enough anymore. The market is full of small businesses just like yours that also do the same thing. So go the extra mile. Get creative, is anything you can add (even a little something) that would make their day extra special / make their life a little easier just because they bought something from you?

4. Have a process in place to manage clients concerns and unhappy clients.

This will give you two major things: you will always improve your products and services and you will also avoid bad testimonials that can do a lot of damage.

5. Proactively ask for testimonials and referrals.

Don’t make the mistake to wait for all the good testimonials to magically come to you out of the blue sky. People are busy and they have other things on their minds so even if they were very happy with their purchasing experience from you, they won’t think to send you their testimonial unless you ask. So don’t be afraid of asking. If you did a good job and they are happy clients, they will be willing to help you.

Also, if in any conversation (online, text messages, on Facebook groups etc) somebody is telling you something positive about your brand/business/product make sure you record that. Print screen, take photos, save links, do whatever it is required to do. In this way, you’ll never run out of (fresh) testimonials when you need them.

6. Make it easy for people to spread the word (bonus points of you can also make it fun!).

You can start by simply asking questions that make it easy for them to fill in a nice testimonial (like “What feature of the product have you enjoyed the most and why?”).  Then you can always go further:

  • send an email campaign about your business in which you encourage your past clients to forward your message to their friends
  • if you have a blog for your small business make sure that all your posts are easily shareable
  • incentivize your clients to refer your services by giving them something back in return (like a nice discount on their next order, a gift card, an e-book or something else you know they would like)

7.Use all the testimonials effectively.

Now that you have all those great and compelling testimonials, use them! Feature them strategically on your website (your Home page, your About page, any sales page / opt-in page) and also share them on social media. Remember: 64% of consumers make an online research before deciding to buy, so that is a very good reason to get persuasive in every way you can.

8. Stand out from the crowd and be visible to your clients.

We all know that people love to buy from the best, the experts in their field. It gives them confidence and it makes them feel good about themselves. And this is exactly how you would want your clients to feel like after buying from you!

Also, no matter what type of business you have, providing valuable information and advice to your audience (actual and future clients) by writing a few effectively placed articles is the fastest (and easiest) way to become known as an expert in your field.

So make it your goal to write at least 5 well-written articles at have them published on good quality websites that you know are valuable for your audience.

To make this very easy for you, I have put together all the steps to take to have this done in less that 2 hours. Download your FREE strategy cheat sheet right here (only available to the readers of ducttapemarketing.com):

http://passioncreativitybusiness.com/welcome-readers-ducttapemarketing-com-2/

If you follow the advice I gave you in this article, if you take action, I guarantee you that pretty soon you’ll get messages saying “I am reaching out because I have heard so amazing words about you and your product and I would very much like to buy it also. Where should I send my money to?”. And that, my friend, will be a perfect moment and then you’ll just know that you really made your small business work for the long term.

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


About the Author

Olivia Angelescu is a launch & growth strategist for BUSY (or just Impatient) small business owners who want results FAST! No more waiting for months and months to build your freedom business! Why not do it now? Olivia is working with her clients by both 1-on-1 coaching and online training. You can find her at www.passioncreativitybusiness.com and on her Facebook page

How to Optimize Your Referral Program and Boost Your Sales

Referral marketing looks like the elixir of marketing. You are making your customers refer their friends to your business at no extra cost.

Doesn’t that sound great? If you are a business owner, I know it does.

But here’s the thing: creating a referral program isn’t hard. With software companies like ReferralCandy and Referral SaaSquatch, it has never been easier to create a referral program for your company.

What’s hard is to make it work for your company.

In most cases, your customers won’t care about getting a friend of theirs sign up for your company’s offer (whatever you have to offer) because they don’t see the value in it. It’s not that your referral program is bad, it’s that your customers won’t be motivated to use it, even if you give away a lot of money.

Your referral program needs to have a few specific attributes that will make your customer want to share it with their friends. As you will discover, it’s not money.

In this article, I will show you what really motivates your customers to share something with their friends, and how to apply it to your referral program.

(And be sure to check out the bonus resource at the end of this article with a checklist of all the things you need to do to implement each optimization for your referral program.)

What Makes People Refer Other People

Before we get the nuts and bolts of the referral program optimization, we need to start by knowing what will make your customers refer their friends. We need to get inside the psychology of your customers to understand their motivations. Even if you follow all the common “best practices” that are all about the web, if your program doesn’t respect certain psychological principles, it will likely fail.

The first thing you need to know is that, to your surprise, there’s a whole area of the psychology and economy fields that is dedicated to studying what makes people refer other people. This field is known as “Behavioral Psychology“.

One of the world’s foremost experts on this particular topic is Jonah Berger, a pretty smart guy from Standford who wrote what’s probably the best book on the topic. He called his book, not surprisingly, “Contagious: Why Things Catch On“.

In this book, Berger explains there are six essential factors that make things catch on. He sums up these factors in a word-playing acronym he calls STEPPS, which stand for:

  • Social currency: We share things that make us look good or help us compare favorably to others.
  • Triggers: Ideas that are easy to remember spread. Viral ideas attach themselves to top-of-the-mind stories, occurrences or environments.
  • Emotion: Emotions move us in irrational ways. This means that when we care, we share.
  • Public: People tend to follow others, but only when they can see what those others are doing.
  • Practical: Humans love giving out advice and tips, but especially if they offer practical value.
  • Stories: People do not just share information, they tell stories.

These six factors are the psychological triggers that will make your referral program succeed. If you understand these principles, and if you use them in your referral program, your customers will share it with their friends.

This doesn’t mean your program needs to hit each of the six factors. You may be able to fit only one or two. The point isn’t whether you are able to fit them all or not, it’s about making your program more likely to be spread out through your customers.

In the next section, I will show you a few ways you can implement these attributes to optimize your referral program.

How to Optimize Your Referral Program

Start with Why

Simon Sinek explains in his fantastic TED talk that companies like Apple have been able to achieve the extraordinary success that characterizes them because of one simple distinction: they started with why.

Let me explain: companies that understand the purpose of their existence (that is, their why), are able to attract customers who share their fundamental beliefs. By saying why you do something, you can differentiate yourself from the rest.

As Sinek explains, “People don’t buy what you do. They buy why you do it.” (If you hear his TED speech, he will repeat that line so many times you will remember that phrase for a long time.)

Focusing on the why of your referral program is directly tied with two of Berger’s STEPPS factors: emotions and stories. People share when there’s a story that emotionally affects them. By having a clear why you can tap on both attributes all at once.

Sinek goes to explain that when Apple promote their products, they don’t say:

“We make great computers. They’re user-friendly, beautifully designed, and easy to use. Want to buy one?”

If they did that, no one would care. Have you ever hear someone say they love their HP, Dell or Lenovo computers because they are “great”? No, you don’t even hear someone defend one of those brands over the other ones. They are almost electronic commodities (at least for an Apple user like me).

That’s the exact opposite of what happens with Apple. Their customers feel so aligned with their most loyal customers are pejoratively called “Apple fanboys“. They like Apple so much they even stay up all night outside their stores waiting for the doors to open so they can get their products first.

This is how Apple communicates their products:

“With everything we do, we aim to challenge the status quo. We aim to think differently. Our products are user-friendly, beautifully designed, and easy to use. We just happen to make great computers. Want to buy one?”

That’s a huge change with the former one, and it’s the one that makes all the difference.

If you want to apply the same kind of mindset to your own referral program, you need to understand your own why.

First, you need to know why you do what you do, business and product wise. Then, you need to know why you want your customers to refer their friends. It’s not because you make “great products” or because “it’s cool to share stuff and get $10 off a future order”. The why behind your referral marketing program has to be aligned with your customers’ valuesbeliefs, and needs.

Let me give you an example. The referral program that helped Dropbox grow so fast early on had a clear why. It wasn’t explicit, just like the one from Apple, but it’s one you could easily understand as soon as you used it.

If you look, they didn’t say: “We built a bulletproof, scalable, cross-platform cloud storage architecture to make file sharing easy. Join us!” (it hurts my eyes just to read that).

They said: “Listen, you don’t like to carry your USB around whenever you want to take a file out from your computer. You want a beautifully designed and easy-to-use way to sync all your files in the cloud and do it without having to think about it. We want to make your life easier. Want to spread the love?“.

Thanks to that flawless experience they created and amazing value proposition they offered their users, they were able to create a referral program with a 2-sided incentive which helped them permanently increase their sign up rate 60%. In April 2010, for instance, their users sent 2.8 million direct referral invites.

How to Optimize Your Why

Start by asking yourself, why are you doing this? Why do you want your customers to refer their friends? What value do they get in return? Don’t focus on the explicit value, like a $10 off.

Also, based on your ideal customer, do they share their problems with their friends? If they don’t, then why would you want to use a referral program? If they do, why would the share your products with their friends?

Finally, you need to think: is referral the way to go? Do you have enough customers? Even if you do everything right, having a referral program with only a few dozen customers won’t make a difference. Wait until you have a few hundred, so they can start making the ball rolling.

A good way to know if there is a possibility your referral program will succeed is to see if they share your products on social media without asking. That’s a big commitment (remember, social currency), and that shows a lot of passion, both about their problems and needs and for your products.

With the answers you get from these questions, you will achieve two things:

  1. You will be able to communicate your referral program benefits better; and
  2. Your customers will be truly motivated to use it, helping your company grow.

Explain the Benefits

A referral program has a clear benefit for your company: you get new customers without doing any extra marketing or sales. That’s great for you. But what about the customer? When they share something with their friends, they can’t risk the chance of looking like a fool. They need to be able to help themselves and most importantly, their friends.

You can achieve this by being clear on the benefits your customers get. Think, what is it for them? What do they gain by referring their friends?

If the problem you are solving is big enough for them, and if you have the right incentives in place, they will refer their friends to you. If you don’t, they won’t.

This is tied with Berger’s Social Currency and Practical values. Remember that your customers will want to share something it makes them look good in the eyes of their friends. Also, they want to share something that’s of good use, something that will improve the life of those that are being referred to.

For example, the referral program of Airbnb focuses on the main benefit of anyone who uses their service: getting a good accommodation deal. If hotels weren’t so expensive, people wouldn’t necessarily use Airbnb. But since Airbnb help you save a lot of money on rent when traveling, they put that value as the main benefit in their referral program page:

Thanks to their referral program, Airbnb has been able to drive a 900% year-on-year growth for first-time bookings. No other acquisition channel in their company was able to get those results.

How to Optimize Your Benefits

Make a list of your referral program’s benefits. Since you should already know you’re why it won’t be hard to understand what you offer and its benefits.

With that list, you need to think, what do your customers really get from you? Is it saving money? Is it saving time? Is it a better experience? Is it showing off?

In order to find the true benefit, apply the “5 Whys” technique. That is, for every benefit you find, ask 5 times why it’s a benefit.

Once you do that, you will get to the bottom of your benefit. Then, you will only need to show it clearly on your referral program page.

Show It In the Right Time and Right Place

You may have the world’s best referral program, but if your customers can’t find it, it won’t make a difference. Your customers have to be able to find the program, not only easily, but when they most need it.

Let me break you down that last sentence, because in it lies the difference between a successful referral program and one that has no impact whatsoever.

  • It has to be found by your customers;
  • Prominently;
  • When they most need it.

Why does it have to be found only by your customers? Because they are the only ones that will care about it. Since they know your company and the benefits of doing business with you, they will want to share it with their friends. But why a non-customer who hasn’t “feel” the benefits of your products would ever want to share them with their friends? There’s no social currency and practical value.

Moving on, where do most companies show their referral program? Usually, somewhere in the user’s profile page, and in some other cases, in the site’s footer. It makes sense, to be honest. If you showed it on your homepage to anyone who visits it, it will be ignored. But if you show it where your customers hang out, then it makes sense to make it prominent and easy to find.

Finally, there’s timing. Instead of just hanging your referral program in your footer so basically no one looks at it (I mean, who looks at footers anyway?), you should show it to your customers when they are most likely to find its biggest practical value, when they’re the most emotional, and most importantly, when it’s attached to the right trigger (like after they finish a purchase). By showing them your referral program when they are most likely to care about it, you’re triggering the right action (i.e. refer their friends).

One of the most effective ways to fit all these three criteria is to use email autoresponders based on certain actions or events (sometimes these are also called triggers, but they have a different meaning that Berger’s one).

For example, if your customer just left a review on your product page (assuming it’s a good one), you could send them an email thanking them and showing them your referral program. Or if one of your customers just used your tool after a certain amount of time (assuming that means it’s a positive thing), you can repeat the same process mentioned before, just like Headspace does.

How to Optimize for Timing and Prominency

Start by defining your triggers. What is the key moment where your customers really get to see the value of your products? When is their “aha” moment? That’s your trigger.

This is the moment when you want to show them your referral program, and make it easy for them to access and see.

Besides that, where do your customers hang out? Is it on a Facebook page? Is it on a specific part of your website? Is it, like Airbnb, in a users page?

Wherever it may be, make sure you show it prominently, and with its benefits.

Now It’s Your Turn…

If there’s anything you need to remember when thinking about launching your own referral program is this: creating one is easy, making it effective isn’t.

This article has shown you three science-backed ways you can make your referral programs more powerful. Now, the question is: are you ready to take these recommendations and apply them to your program?

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


About the Author

Ivan Kreimer is a content marketing consultant that helps SaaS business increase their traffic, leads, and sales. Previously, he worked as an online marketing consultant helping both small and large companies drive more traffic and revenue. You can follow him on Twitter and Facebook.

How Customer Insight Can Boost Referral Marketing Effectiveness

How Customer Insight Can Boost Referral Marketing Effectiveness

We all know that word-of-mouth is one of the best drivers of new customers.

The problem is, most referral marketing systems are based on best-practice advice that quickly becomes stale.

But referral marketing is important. According to research conducted by Heinz Marketing, 71% of companies report a higher number of conversions with a referral program.

Where most companies fall flat, however, is in understanding their customers. They create referral systems that focus on tools, not a strategy informed by customer insight. In business, we have access to so much data but hardly ever use it.

So, how can you create a referral marketing strategy that offers incentives? What can you do to make your program one that customers are thrilled to be a part of?

In this article, we’re going to outline the importance of customer insight to inform your referral strategy. We’ll also look for the kind of insight you should be looking for and how to use it to optimize your referral strategy.

The Data/Insight Gap

By 2020, more than 50 billion smart connected devices will exist in the world (Cisco).

Samsung has developed a smart fridge that lets you order stocked groceries from its touch screen. The Amazon Dash brings ordering supplies at the touch of a button, literally. These will all become sources of customer data these brands can execute upon.

Whether you’re in the SaaS, e-commerce and app industries, or even a brick-and-mortar business – the amount of data becoming available presents both a challenge and a great opportunity. This infographic from IBM illustrates the situation well:

How Customer Insight Can Boost Referral Marketing Effectiveness

But before you can use the customer data available to you, you need to understand what you want from it. What is its true value?

These principles can be applied to all forms of marketing. But for the sake of this article, we’ll focus on your referral strategy.

First, understand the context. What are you trying to achieve? Is it more sign ups to your referral program, or more revenue per new customer? What’s the key goal?

You must also define the specific needs that are going to be addressed. In this case, we’re looking at stronger conversions and more sales over a defined period.

Understanding the answers to these questions will help you use your data in an intelligent manner, in all areas of business.

When improving the effectiveness of referral marketing, these are the insights you should look for:

What your customers truly care about

Giving a % discount or cash rewards for your customers inviting their friends works great. But it’s not always the most effective way of doing things.

Take Harrys for example. When launching their shaving subscription service, they created a list that customers could sign up for to receive updates:

How Customer Insight Can Boost Referral Marketing Effectiveness

Here’s the twist: On the other side of that email subscription gate was a gamified referral system. Subscribers could invite their friends to join the list, receiving bigger and better rewards the more people they got to sign up:

How Customer Insight Can Boost Referral Marketing Effectiveness

The result? Over 100,000 email subscribers to reach out to on launch day.

They could have given discounted product, but instead, they saw the value in a new customer and were willing to give free products away in exchange for it.

And by giving free products, they attracted an audience who were genuinely interested in what they were offering.

The same can work for your business. Find out what your most popular products are and offer them for free in exchange for inviting their friends.

Use customer development principles, speaking to your customers in person, to learn more about this. Find out why they’re jazzed about doing business with you and offer them more of that.

For a more scalable approach, use surveys. If you’re in the e-commerce space or sell any form of product online (digital or physical), use the data available to you to yield customer intelligence.

How much do people spend with you? What categories do they mostly shop in? How frequently do they shop?

Take the answers to these questions and let them inform the referral rewards you offer.

Discover who your best customers are

Identifying your top performing products is one thing. But have you ever thought of finding your “top performing customers”?

In business, the 80/20 rule is everywhere. A certain percentage of your customers will generate the majority of your revenue.

It would make sense to focus on these keen buyers as targets for your referral marketing program. The question is, how do we find them?

Customer intelligence can help you take customer data and turn them into profiles. This will give you an exact understanding of how your customers are interacting with your business, website or store and turn them into actionable insights.

For example, let’s say you want to find customers who purchased from you more than 5 times over the last month. With customer intelligence, you can segment these customers and tailor your messaging to them.

Those who buy from you most frequently are more likely to spread the word. In fact, they likely already have done. You just might not know it yet.

Here’s an example of what a customer profile looks like, based on real-time data:

Tools & organizational buy-in

Knowing the importance of data and customer insight is one thing. Getting everybody on your team to buy-in is another challenge.

It’s clear that the data-insight gap is a problem beyond marketing. But when it comes to referral strategy specifically it can gain huge wins, fast.

So, start with your marketing team. Get them on board and believing in what data can do for them. Show them what data you have access to and how it can benefit word-of-mouth for your business.

Implementation is easy with the right tools. To get an understanding of your customers, there’s Woopra. For referral marketing, ReferralCandy is a powerful digital tool that’s easy to set up and integrate with your current systems.

How Customer Insight Can Boost Referral Marketing Effectiveness

If you’re in the “brick-and-mortar” space, Belly provides a comprehensive customer loyalty system. Their system provides your customers with digital loyalty cards, tracking all of your most loyal customers buying behavior.

Conclusion

Referral marketing is the highest performing acquisition channel in many industries. Hearing a raving review from a friend will always hold more weight than even the most creative of ads.

The key is to understanding what your audience cares about. Go big on incentives with rewards that are relevant to them.

Finally, target your best buyers and work on turning them into advocates for your brand. It’s likely they already love your products and services. They just need a little encouragement to spread the word.

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


About the Author

Elie Khoury

Elie Khoury is the CEO of Woopra, a customer intelligence platform for the modern organization. Readers of the Duct Tape Marketing blog can sign up for an account here.

How to Train Your Referral Partners in Just 2 Steps

Have you ever met someone at a networking event and hit it off?

You schedule a time to meet over coffee or lunch…

The meeting goes fabulously well. You both leave agreeing to find “mutually beneficial” ways to help each other, and then…

Crickets.

Your new partner is suddenly whisked into the witness protection program. She’s incommunicado.

What started out with so much promise, turns out to be a dud.

Why Referral Partners Fail You

In my 20 years in business, I’ve found that most everyone I meet is well meaning. If they say they want to help, they do intend to help.

Yet, they often fail to follow through.

The Unpaid, Untrained Sales Force

Stop and think for a moment what you expect from referral partners and clients when you ask them to refer. You’re really asking them to do your prospecting for you.

For most businesses, prospecting–lead generation–is the single most difficult activity in the business. If you think about it, that is the business.

How can we believe that a virtual stranger will effectively prospect, when our paid, and expensively trained sales force struggles to do it?

What Causes Partners to Disappear

Your new referral partner wants to help. It’s just that she’s got to make sales herself. Plus, she’s got a family. And, maybe some friends.

In other words…a full life and a full plate.

Then you arrive in her life and she truly wants to help, but life intervenes.

If Only You Were Easier to Refer

Part of the problem your partner faces is that you’re simply too hard to refer. She’s not exactly sure what you do, or who she should refer.

And, your “first encounter” with anyone she might refer is going to be some form of call or meeting–a sales meeting.

Sales meetings are scary. Nobody likes to go into a sales meeting. They might get sold something!

Sales meetings carry implied sales pressure. You know it. Your referral partner knows it. And the referred prospect knows it. So, it’s often easier to “go dark” and avoid the situation.

We need to make referral marketing easier…

The Answer: Train Your Referral Partners in 2 Steps…

Step 1: The Johnny Carson Method

You might be old enough to remember Johnny Carson–the host of The Tonight Show before Leno, before Conan, before Fallon. Johnny had a knack for introducing people to everyone he knew.

He’d just sit them down on his couch and ask them questions…

And let 10 million people watch it all on TV.

There was never any “sales pressure” to go see a guest like Jerry Seinfeld’s comedy show after he appeared with Carson.

But lots of people did. Spending lots of money.

Johnny was the tastemaker for his audience.

Why Interviewing Your Partners is Perfect Training

Your ultimate goal is to get your partner to share you with anyone and everyone who might be a prospect for you.

But before you can get there, it helps to build some trust. Show your referral partner how to easily get you in front of everyone they know.

You do it by first “introducing” them to everyone you know, through a simple interview.

See, if your referral partner is interacting with your prospects, there’s a good chance they have some expertise or wisdom that your clients would appreciate and value.

An interview takes little time–20-30 minutes. Almost no technology–a phone and a free conference line will do. And, you don’t need anything more than a handful of questions (your partner can provide them) and the ability to have a conversation.

In an hour of your time, total, you can prove to your new referral partner how easy it is for you to share them with everyone in your network.

Just have a valuable conversation, record it, then email a link to the audio to your network of clients, and partners, and prospects.

You’ll be shocked by the feedback

When our clients use this technique the first time, they’re surprised when their own clients call and thank them for sharing the interview.

(The goodwill you create with your own clients is a bonus!)

It’s important that you pass that positive feedback to your referral partner. It’ll make them feel great about being interviewed.

It also validates the fact that people like and value this type of information sharing because…

Step 2: Now it’s time to put their training into action

Once you’ve shared how much your clients appreciated hearing your partner’s interview, with the partner, it’s the perfect time to suggest “turning the tables.”

Say…

“I’m so glad I was able to share your knowledge with my network. They really benefited. I’d like to return the favor. I think your contacts might get a lot of value from knowing more about [insert your area of expertise].

I’d love to have you interview me, so we can help your people the way we’ve helped mine.”

Nine out of ten referral partners will jump at the chance. If you happen to come across the tenth one, well…you’ve just learned a lot about that partner.

How to “control” your interview

There are three things you’ll want to do to ensure you make the most of your interview.

  1. Write your questions. Don’t settle for a free-flow conversation, and don’t put any extra work on your partner. Write questions that, when you answer, give the listeners “ah-ha” moments.
  2. Do all the logistic work. Again, don’t put any work on your partner. Write the cover note/email. Bring lunch to their office and offer to help them send the email while you both eat. Get creative…just don’t make it “homework” for your partner, or it’ll drop to the bottom of their to-do list.
  3. Put a lead generation offer at the end.Doing the interview is great. But a big mistake is omitting any next-step call to action. The best offer in these interviews is to offer what I call a Referral Kit™ (an educational marketing piece).

That gets interested prospects to raise a hand and identify themselves to request your Referral Kit.

But wait, there’s more…

There’s one little hidden benefit of this process…

After you publish your first interview or two, your other partners will want in. Your opportunities just multiplied!

Here’s how to put it all together

So, we’ve covered a lot of ground. Let’s review the process…

First: Offer to interview your referral partner to share their expertise with your network. Distribute the interview to your clients, prospects, and other partners.

Second: As soon as you get positive feedback from your network, share it with your partner and “turn the tables.” Suggest they interview you to share your expertise with your partner’s network.

Rinse. Repeat.

Watch as your list of interested prospects and network of effective partners grows.

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


About the Author

Steve GordonSteve Gordon is the author of Unstoppable Referrals: 10x Referrals, Half the Effort. Over 7000 people downloaded his free Referral Blueprint for Professional Service Firms.
Free download: Would like to have the exact script I use to get referral partners to say “YES” to an interview?
Click here and tell me where to send it…

 

1 2 3