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How to Build an Effective Referral Program

How to Build an Effective Referral Program written by John Jantsch read more at Duct Tape Marketing

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 written by John Jantsch read more at Duct Tape Marketing

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.

Five Tips That Make Asking for Referrals Less Intimidating

Five Tips That Make Asking for Referrals Less Intimidating written by John Jantsch read more at Duct Tape Marketing

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.

What Are Referral Champions and How Do You Create Them?

What Are Referral Champions and How Do You Create Them? written by John Jantsch read more at Duct Tape Marketing

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.

How to Add Sales to Each Stage of the Customer Journey

How to Add Sales to Each Stage of the Customer Journey written by John Jantsch read more at Duct Tape Marketing

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

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

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

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

Getting to Know You

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

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

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

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

Coming to Trust You

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

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

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

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

The Moment of Truth: The Purchase

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

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

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

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

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

Building a Referral Engine

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

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

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

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

How to Make Your Business More Referable

How to Make Your Business More Referable written by John Jantsch read more at Duct Tape Marketing

“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?

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