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Marketing: Create Your Own Referral Machine

Word-of-Mouth Referrals are Gold

Word of mouth, often called referrals, are great because those folks who love your business best become your  cheerleaders.

Which begs the question – is there a ways to create an ongoing referral mechanism, a referral machine? You bet. But don’t just take it from me, consider the wise words from John Jantsch. John is one of the best marketing experts out there and he recently wrote a great new book o called The Referral Engine. In it, John offers readers a step by step guide to creating an ongoing referral machine.

The essence of creating your own referral machine is this:

1. Be Referral Worthy: Needless to say, the foundation of getting referrals from satisfied customers is to be a business that satisfies customers. “You have to be a great company worthy of being referred,” Jantsch says. People don’t refer business to mediocre businesses, but they do refer business to companies that exceed their expectations.

2. Start With Existing Customers: It is not enough to simply provide a good product or service at a fair price. “That is the minimum of what is expected of you,” John told me. Instead, your job, if you want referrals, is to take a customer through a cycle John calls “know, like, trust, try, buy, repeat, and refer.”

Makes sense, eh? For someone to refer you, they must first learn about your business, trust it, try it and like it, shop there again, and only then will they refer you.

Equally importantly, you have to make it easy for customers to refer business to you once they like you and are repeat customers: Create customer loyalty programs. Give people incentives to refer business to you. Ask for referrals.

And most importantly, connect with your customers and give them many ways to connect with you:

  • Connect using IM, Twitter, Facebook fan pages, and your website
  • Offer feedback forms on your site and with invoices
  • Take frequent customer surveys
  • Call them and ask how you are doing
  • Create customer review panels
  • Welcome customer complaints

3. Create a Strategic Partner Network: The idea here is to find businesses similar to yours – companies that share your values and are also exceptional and worthy of referrals. Then begin to do some work together, some joint projects. Maybe they can offer free samples of your products, and vice versa. Or do some webinars together. Create a group blog. Have a joint sale.

Because once you do that, once you create a valuable strategic partnership, all of a sudden you will have this other company singing your praises to their customers. A whole new group of people will be exposed to your business in a very positive way.

Want proof that this works? Let me refer you to The Referral Engine.

Steve Strauss - Founder, and
Steven is one of the world’s leading entrepreneurship and small business experts. He is a lawyer, public speaker and author, speaking around the world about entrepreneurship. He has been seen on CNN, CNBC, The O’Reilly Factor, and his column, Ask an Expert, appears weekly on | | @stevestrauss | More from Steve


Sales: Who are Your Top 20?

In Sales, 20% = 80%

Spring has sprung
The grass has riz
Wonder where the
Business is

That old rhyme keeps going around in my head these days as the media tells me the economy is picking up, but do you feel like you forgot to get on the right bus?

Historically, about 80% of our business comes from 20% of our customers.  Have you thought about doing an inventory of your clients (customers) to determine who those 20% are in your world?  Not only will that prioritize as to where to give your most attention, but by determining how you got those customers in the first place it will help with the marketing.  In marketing we say, do more of what works and stop what doesn’t.  Makes sense.

Give them more attention?  Yes, follow up on their satisfaction quota, on their now or anticipated needs and on what new products or services you can provide. Twenty percent is 80% –  pretty amazing statistics.  How does that work in your company?  

Betty Otte, SCORE Orange County
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