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How to Build a Business Around Referrals

How to Build a Business Around Referrals written by John Jantsch read more at Duct Tape Marketing

Marketing Podcast with Michael J. Maher
Podcast Transcript

Michael J. Maher headshotOn this episode of the Duct Tape Marketing Podcast, I sit down with author, speaker, and real estate expert Michael J. Maher.

After writing his book, The Seven Levels of Communication: Go From Relationships to Referrals, based on his experiences in the real estate industry, he began to garner attention well beyond the bounds of the real estate industry.

Maher found that he was suddenly an in-demand speaker, being tapped to help everyone from entrepreneurs and CEOs to doctors and financial planners build up a business that’s formed around referrals.

Today on the podcast, Maher and I discuss the importance of creating a referral-based business, why it’s far more effective than focusing on the traditional sales cycle, and what you can do to start winning referrals for your business, no matter what field you’re in.

Questions I ask Michael J. Maher:

  • Are there things business owners should do, beyond providing satisfactory service, to ensure that they get referrals?
  • What if your business is in an industry (like, say, mental health care) where your clients might hesitate to openly refer others?
  • What if your business doesn’t have anything to give right now; you just really need to get more business?

What you’ll learn if you give a listen:

  • Why the referral cycle is preferable to the traditional sales cycle.
  • What a “talk about” is, and why you need to create them for your business.
  • What the seven Ts of generosity are and what they have to do with generating referral business.

Key takeaways from the episode and more about Michael J. Maher:

Like this show? Click on over and give us a review on iTunes, please!

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This episode of the Duct Tape Marketing Podcast is brought to you by Klaviyo. If you’re looking to grow your business there is only one way: by building real, quality customer relationships. That’s where Klaviyo comes in.

Klaviyo helps you build meaningful relationships by listening and understanding cues from your customers, allowing you to easily turn that information into valuable marketing messages.

What’s their secret? Tune into Klaviyo’s Beyond Black Friday docu-series to find out and unlock marketing strategies you can use to keep momentum going year-round. Just head on over to

Transcript of How to Build a Business Around Referrals

Transcript of How to Build a Business Around Referrals written by John Jantsch read more at Duct Tape Marketing

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John Jantsch: This episode of The Duct Tape Marketing Podcast is brought to you by Klaviyo. Klaviyo is a platform that helps growth-focused eCommerce brands drive more sales with super-targeted, highly relevant email, Facebook and Instagram marketing.

John Jantsch: Hello and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch and my guest today is Michael J. Maher. He is known as North America’s most referred real estate professional, but he’s doing a lot of other things these days. He’s also the author of 7L, The Seven Levels Of Communication: Go From Relationships to Referrals. So Michael, thanks for joining me.

Michael Maher: Absolutely. Fantastic, I’m an avid listener of the Duct Tape Marketing podcast and I’ve been an avid follower of yours for many, many years, from the referral flood days, no doubt.

John Jantsch: Early on and you had me on your podcast and we got to reminisce about some of those days as well, so I appreciate that.

Michael Maher: That’s right.

John Jantsch: So nobody needs to hear why referrals are so awesome any more, but let’s tell them anyway. Why is going for referrals, running a referral based business such a great way to build a business?

Michael Maher: Well there’s no sales involved. I think the biggest difficulty in business today is the sales process. The sales process is chase, chase, chase, and when you’re chased you have two options, you either flee or fight. And that’s what a lot of sales people are getting is they’re getting the people that want to fight them or they find that people just continue to flee and they’re told to follow up and nurture whatever you want to call it and they keep fleeing and they’re working on their scripts and dialogues and everything else until they can finally corner that person and they finally corner them, the person doesn’t have an out, so they kind of go, “Okay, I guess I’ll buy it or I’ll guess I’ll work with you.” And then the entire time that the product happens or the service happens that customer is trying to get out.

Michael Maher: And the fact of the matter is, is they have a way out because the sales person has probably over promised the entire chasing process and the only way to deliver after you over promise is to under deliver, which leads to a frustrated client, which also leads to no more referrals, which leads to you having to chase even more. And that’s the, we call that the cycle of discontent or the current chase cycle that a lot of salespeople are on. But on the other hand, if there’s a downward cycle or this kind of negative cycle, if you will, there’s this positive cycle and that’s the referral cycle. The referral cycle is you get a referral, you tell them the truth and I’m the nice thing is you don’t have to sell or convince or anything.

Michael Maher: You literally do almost the opposite of sales. You tell them the worst case scenario or the nuclear case scenario of what it might be during the process or during their use of the product. And then when they use the product or use your service, they’re wowed simply if the product works or simply if your service was satisfactory, you can just do your job and elicit a wow. And guess what, when you have under promised, anything you do is over delivery, they are wild. Well what do wild clients do? They refer you some more. So you have people to tell the truth to and then that leads to wild service, which leads to more referrals. And that is the referral cycle.

Michael Maher: So the referral cycle is shorter, it’s far easier, it’s far more friendly, it’s more efficient. And you can tell people the truth. So I think the biggest power of the referral cycle is that you are in your integrity. You never feel like you’re out of your integrity. You feel like, “You know what, I don’t have to go to work and be someone different. I can be who I am. A person of love, generosity and appreciation all the time.” And that’s the beauty of the referral business versus the chase or the sales business.

John Jantsch: So you spend a lot of time of course, showing people how to do this, the sort of physical part of it or the tactical part of it. But I’ll tell you the pushback I get a lot is that people are like, “Hey, you just do good work and if you do good work, people will talk about you.” I’m sure in the real estate business that’s very, very true, “So and so did a great job for me. So I talk about them.” I mean is it that simple or are there things that we need to be doing much more proactively than that?

Michael Maher: It has to be more proactive, you and I both know that. I mean satisfactory service is truly the expectation and the only reason people are going to talk about you is to go above their expectations. So you can do that two ways. Essentially you can lower their expectations and then produce at your normal level or you can over perform. You can do some kind of while during that transaction, during that process or with the product. Toms Shoes is an example, you don’t just get a pair of shoes, you get a pair of shoes and you get a certificate that shows that a pair of shoes have been donated to people who didn’t have shoes. And all of these above and beyond examples.

Michael Maher: For us in the real estate world, it was, we would reset their expectations. So we would tell them the nuclear case or worst case scenario and then when we did the transaction, many times it would not match up to the worst case scenario so they were happy. But then we took it to the next level because you talk about the core talk ability differentiation point. I totally butchered that actual title, but what I call, talk abouts. You have to have a talk about, and so what are they going to talk about? And in our case, we do a house warming party for every buyer who buys a home through us. So 45 to 60 sometimes even 90 days after they get into the home, we celebrate with their neighbors, their friends and family, the people that they work with and we have a housewarming party.

Michael Maher: Well the housewarming party became a talk about, they would talk about it, they’d spread the word on social media. They would go, “Oh my gosh, my realtor threw a housewarming party. I’ve never heard of” … and all the people commenting were, “I’ve never heard of a real estate agent doing a house warming party.” So you have to have talk abouts, you’ve got to give them these things to talk about.

John Jantsch: Here’s another, I’m just going to give you things that I hear all the time and I’ll let you riff on them. A lot of people know that, I mean, you can read countless blog posts that talk about, you’ve got to give and give before you get and just be a person of value and deliver value. And that’s great, I’m 100% behind that. But what if I don’t have anything to give right now? I mean I need business.

Michael Maher: Well here’s the thing. I do believe that you need to receive. I believe that generosity and appreciation are two sides of the same coin. I believe that we need to be a generous giver, but we also need to be an appreciative receiver. I mean people that come to me normally are generous givers, they’re pretty good about being generous givers. Where they typically aren’t great is at being appreciative receivers. They’re like an opportunity could literally hit them in the face and they would have their hand up or be blind to the opportunity. So we need to be in this state of generous giving and also being ready to be an appreciative receiver. I truly believe there’s two sides of the same coin, like inhaling, exhaling or flexing and relaxing, if you will. So it’s one of those where the big thing on giving is you have seven gifts of generosity, no matter what, so only one of those is money.

Michael Maher: And there’s seven Ts, I guess if people are taking notes on this real quickly, is the seven gifts of generosity all start with the letter T and one of them is thought. And the thing is, thought doesn’t cost you anything and it’s probably one of the most underutilized powers and gifts that we use. And that is you could think about someone, the power of prayer is well documented, but even we need to think about people, but we need to also take action on their behalf. That’s the power of a handwritten note, is the power of a handwritten note is not the paper or the ink or whatever it may be. It’s the fact that somebody thought about you when you weren’t with them and they took the time to take the action and you’re like, “Oh my gosh, this handwritten note is so wonderful.”

Michael Maher: It’s the thought that counts. And I will tell you that thought is a gift of generosity, that it is a value that you own and that you give to others. So thought plus action is a really big one. Now another thing is, the second part of this is talk. And talk is you can speak about others, you can champion others, you can refer others, you can talk to your friends about them, you can talk about them on a podcast. And talk is something that doesn’t cost you a dime and yet could really perform in big ways for you and for the person. I have a saying, it’s easy to champion a champion. And what that means is that when you, let’s say you’re at a networking group, or you’re at a meeting with a bunch of people and you champion the landscaper and you’re like, “Jeremy’s the best landscaper in the world. Jeremy does great. Jeremy’s fantastic. You’ve got to go to Jeremy for your landscaping needs.”

Michael Maher: Well, there’s something amazing that happens within the organization or within that group. And yeah, they’re like really impressed with Jeremy, but they’re also really impressed with you. And if you look at, okay, the group start to disengage and go different directions, the line for Jeremy is going to be two or three people deep, especially those that need landscaping. But the line to you, so for people who want to meet you, will be nine or 10 people deep. Well why is that? Well, the reason is because they’re thinking, either subconsciously or consciously, that if I get into relationship with Michael, Michael is likely to champion me and my business. And how do I know that? Because I just saw him do that with Jeremy. So you are more attractive by championing others and we call it, it’s easy to champion a champion.

Michael Maher: People will champion you and they will want to meet you, the more you champion other people. So guess what, talk is cheap, but in this case talk is valuable as well. And then the third one is talent. We have a talent, some people are their de facto IT person for their family or for whoever it may be. And you have a talent with whatever it may be, video games or turning on the computer or Google or research. Our main talent that we get paid for is just one of the many talents we have. So we have this ability to share with other people this talent and help them, whatever it may be, books or writing or journaling or meditating or whatever it may be. We have all these talents that we can help other people with.

Michael Maher: And some of those talents like selling real estate or negotiating, we can get paid for. So then the middle one is treasure and this is money. This is where you know what, you can give the gift of generosity of money. You can donate to a cause. You can pay for somebody’s product. You can pay for somebody’s service. And I will tell you, and where I’m at in life right now, I do use the money gift of generosity more than I used to before. Why is that? Well, I didn’t have money before, so I couldn’t use that, I couldn’t use that gift whatsoever because my money was quite scarce and sparse. So now the last three I believe are really where the rubber meets the road and this is where the most value within the seven gifts of generosity is truly exchanged.

Michael Maher: And that’s all a relationship is. A relationship is just a value exchange. That’s all it is. If you’re no longer getting value or they are no longer getting value, they are going to get out of the relationship. So the seven gifts of generosity needed to be tip of tongue and top of mind at all times because this is what it’s all about. This is being in relationship. So the last three are team and team is your network of people. You have a team of people who can help people. So we have an example within the generosity generation where somebody wanted to sell a 1920 something, a 1936 Mercedes and it’s like, “1936 Mercedes, I didn’t even know Mercedes was around in 1930.” But anyway, it was very unique, but he couldn’t sell it, couldn’t sell it on a … so we actually went through our market and said, “Hey listen, is there anybody out there that knows somebody that might be interested in this old Mercedes?”

Michael Maher: Well guess what? We were able to help find a buyer for that car. They got together and it didn’t cost me a dime, but there’s people who still talk about helping that person get that 1936 and having the person sell that 1936 Rolls Royce. But the thing is, it’s not just a car or whatever it may be. When you are meeting with someone, you have almost an infinite level of capacity to help the person across from you. It isn’t your capacity to help, but it is your team’s capacity to help, especially with social media. You could easily put on social media, “Hey listen, I’ve got somebody with a 1936 Mercedes who needs to sell. Who do you know that might be interested?”

Michael Maher: So we can help people in a very big way with our team and also the new ABC, the old ABC used to be, always be closing and boy isn’t it fun when somebody tries to close you? But in today’s world it’s, always be connecting, always be connecting. And that’s the power of the team is when you connect to others, you all three, win. So the two people that connect win but you also win from connecting those two people. So team is a very valuable one and that’s your super connectors and your influential people, they tend to be phenomenal at using this gift of generosity of team.

John Jantsch: I want to remind you that this episode is brought to you by Klaviyo. Klaviyo helps you build meaningful customer relationships by listening and understanding cues from your customers. And this allows you to easily turn that information into valuable marketing messages. There’s powerful segmentation, email auto responders that are ready to go. Great reporting. You want to learn a little bit about the secret to building customer relationships, they’ve got a really fun series called Klaviyo’s Beyond Black Friday. It’s a docu series, a lot of fun, quick lessons, just head on over to, beyond black Friday.

Michael Maher: And then you’ve got the last two. Teach is the next one and I have to tell you, this is one of my favorite ones because I read a lot, I accumulate a lot of knowledge and I’ve accumulated a lot of wisdom, mostly through mistakes, errors and failures, but I’ve accumulated and so I can pass on and help others. And that’s what I hope people get from my podcast and this podcast is, I hope you take one thing from this podcast and you share it with another person, you teach them. And the power of teaching is that when one person teaches another, two people are learning, they’re learning new information, but you’re learning how to communicate that information. And what’s funny is as soon as you communicate that information, it’s amazing how much more accountable you become to it. But you also become a better student by being a teacher because everything you learn, you start to think about, “How would I share this? How would I teach this?”

Michael Maher: Well, you internalize it and you become a more powerful learner by being a teacher as well. And then the last one, some people might’ve guessed what’s the last gift of generosity, you might have guessed that already. But the the seventh T is time and it’s time. Time is a … and sometimes it just means sitting next to someone or being with someone. And I will tell you that time is something that I used early on in my career to build great … I just listened and I was just there and it was very valuable. But it is one of those things that later on in life, I have to tell you that I do trade treasure for time a lot more now than I used to. But that’s the beauty of having seven gifts of generosity is you can use all seven of those in different ways, however necessary and how it best helps the recipient. So those are the seven Ts of generosity and you have a lot to give that doesn’t include money and I truly encourage you to get out and do it.

John Jantsch: Yeah. And as you pointed out, I think those evolve in terms of how you use them and when you use them. I’m going to give you another objection that I hear a lot of times is, what if my business is one that people won’t necessarily talk about, they love me, but they don’t want to talk about the therapy that they’re going through for that drinking problem or something. And what if I’m in one of those kind of businesses and I get that question quite often. You’ve probably heard it before too.

Michael Maher: Yeah. So you’re not going to go direct to the consumer, you’re going to … I mean, the fact of the matter is, someone knows someone. So it’s like, who is the someone who knows the someone you would get to? You’re right, I’m not going to sit around at a party and talk about the counseling I’ve been getting on drinking or whatever it may be. But who would I tell? And that would be a doctor or a counselor or a psychologist or a pastor or a priest. And all of a sudden … and actually those businesses can build bigger, stronger networks because the people are going to them and you’re not necessarily … the problem is too many people go direct to a consumer and they’re trying to get clients. And what we should be doing is we should be going to people and trying to get referral sources.

Michael Maher: We need to quit looking at people as potential clients and we need to start looking at people as potential lifelong referral sources. And I will tell you that when you build these ambassador, what we call ambassador level relationships, all of a sudden you’re a better friend. You’re a better relationship, you’re a better partner because you have this thought, “Wow, this is lifelong, this is more than just a client where I’m going to take their money and exchange it for a product or a service.” And that’s the thing. The power of this is, you build those … I have a gal in Memphis, Tennessee. She tends to work with divorced couples. Well there’s another secret that people don’t disclose, but she has about 25 divorce attorneys that refer her over a hundred transactions a year and she takes care of them very discretely. She is very unemotional as part of her nature and she also networks with judges who also know divorce attorneys. So her network is much smaller but far more impactful because she has a smaller group of people to build that network with.

John Jantsch: Yeah. I often tell people, a lot of people think immediately about their customers that can refer to them and a great customer might know four or five people they can refer to you, but that law firm or other strategic partner, a lot of times they might have 500 people that they could refer you to. So I love that idea of working kind of a strategic network. But I think one of the real keys is that a lot of times people try to go out and find those who can send me business kind of resources. And I’ve always felt like if you build a network of kind of best of class providers who can maybe help your customers in other ways, I always feel like that’s such a better way to think about building a strategic partner network.

Michael Maher: That’s right. That’s like a Rita in Memphis is, she’s known as kind of that divorce house queen, she takes care of the house when you’re having a divorce, while her network knows that. So people discreetly go to her, well they don’t have a divorce attorney. So what does she do? She reverse refers that right back to her divorce attorneys. And it’s a great relationship. The value exchange is almost equal in that regard. So the other thing too that I have to throw in here is the concept of events. I help business owners grow and develop event-based businesses built on a foundation of love, generosity and appreciation. That’s what I do. That’s how powerful events are or to … I believe that events are the ultimate talk about.

Michael Maher: So if that person is maybe in a … so your events would not be for consumers necessarily, your events could be for divorce attorneys or whatever it may be, doctors, counselors, psychologist and that kind of thing. And the event isn’t going to be you talking about real estate, the event is going to be something that’s current for their field. The changes in laws of divorce or the changes in laws of whatever it may be. So having events for that type of … and so you can give them value from the sense of an event and something that’s educational, entertaining and charitable. And I just have to throw that out because an event becomes very talk about able. It’s a talk about. In fact, I think an event is the ultimate talk about.

John Jantsch: Yeah. And I think you can be very liberal with what event means. I mean, I for years would preach that, take your six best customers to lunch together so that they actually get to meet each other. That’s an event. It doesn’t have to be this grand ballroom kind of thing.

Michael Maher: No, no events, I mean, well in fact the grand ballroom may be counterproductive to your objectives. So yeah, I mean think … 7L is written from a very heavy one to one relationship type of, the subtitles go from relationships to referrals. So it’s very one to one oriented. Whereas, the next book I need to write is a very one to many approach. And I unfortunately in 7L, I just ran out of room to really dive deep into the one to many of my business. But that is kind of one of my regrets about 7L is that I didn’t talk, I do have the house warming party in there and I do talk about it and that kind of thing. But I didn’t go into the big picture around events and there you go. Need another book, I guess.

John Jantsch: Speaking with Michael Maher, he’s the author of Seven Levels Of Communication. Go from relationships to referrals. So Michael, where can people find out, obviously your books available anywhere but where can they find out more about you and maybe dive into some of your training?

Michael Maher: So Referco, R-E-F-E-R-C-O .com. So check us out at They can get the book at, No offense to Referral Engine, if they haven’t read that yet, what the heck are they doing? So go get Referral Engine and the Duct Tape Marketing and then get 7L.

Michael Maher: But that’s the great thing about this is the influence you’ve had on me, I’ve kind of built this within the real estate industry and the lender arm and kind of branched out from there. And I know that we talked about it on Referrals podcast, but I’d be remiss if I didn’t say thank you here and live on the impact you made on me. We’re from the same place. Most people don’t know that, Shawnee Kansas area. And I went to a seminar you did, I won’t say how many years ago just because it’s going to age me, but I remember buying one of your very first products, that you were so early on that and way before people were doing info sales and things like that. And I bought a little book called Referral Flood and that was just, it was very handy. I referred to it often as I developed my referral business and took it from there. And thank you for being a part of that growth.

John Jantsch: Well, I appreciate that, but ideas are just that. I mean, take an action on them, which is what you did and built a tremendous business. So kudos to you for doing that. So thanks Michael. It was great catching up with you and hopefully we’ll see you soon out there on the road.

Michael Maher: Thanks John. Always great to have a conversation with you. And thank you for doing this podcast. You’re adding a ton of value to the world and I’m glad you’re doing it. Thank you.