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Referral Programs: A Guide for Small Business

Referral Programs: A Guide for Small Business written by John Jantsch read more at Duct Tape Marketing

Running a business is hard

But with a good referral program it doesn’t have to be

As a small business owner you are probably thinking about helping your current customer or trying to figure out how to increase sales. But you’ve also got to think about increasing leads, and that is where referral programs come in. 

As a business owner myself, I know you just want your customers to be happy with their purchases. But wouldn’t they be even happier if they could get something more? One of the best ways to accomplish this is by having good referrals program in place.

In a recent survey of 2,000 business owners by Texas Tech, 83% of the respondents claimed that they have a business that they love so much that they’d recommend it to others, yet 29% do so.

There is a lot of potential and profit in closing that 54% gap, but where do you start? You start by building referral programs. Read on to learn more

Why are referrals programs a thing?

I am willing to bet that you have made referrals to other people and you have had a time in your life when you needed a referral.

This symbiotic relationship leads to a level of understanding. A type of survival mechanism that comes from referral reciprocity. Referrals are also seen as a type of social currency. There are people that crave the social currency of being the go-to person, that connector. 

Most importantly, referrals remove risk. Referrals help us solve a problem. They reduce the amount of work we have to do to find the right solution to our problem, and they come prepackaged with answers to common questions: Will they work? Will they know? Can I trust them?  

That is the best way to think about referrals, as the ultimate way to lend and borrow trust.

Why do referrals programs matter so much?

Easily attract your ideal customer.

Frankly, most of the people that get referred to me are much closer to my ideal customer because my ideal customer is the one referring them. They understand our business and they know who would make a good fit for us. 

Shorten the sales cycle

A strong referral program can significantly shorten the sales cycle. Referred leads were likely sent to you from someone you trust, so you can skip the know, like, and trust stages and jump straight to the try stage. 

Increase your premium pricing

Referrals also allow you to diversify your pricing portfolio and charge a premium for your product or service. Customers that are familiar with your brand and have a positive perception of you are willing to pay more. 

Magnify Lifetime Value

Referral programs increase the lifetime value of your current customers. A real estate agent might receive 12 to 15 new referrals from just three initial leads if he or she creates an exceptional experience for those first three leads. Therefore, your customers’ lifetime value can be multiplied to a great extent if you focus on referrals.

Referrals are invaluable to any business. By ignoring customer referrals or not incorporating customer referral program ideas into your marketing strategy, you’re missing out on a valuable source of revenue.

7 Types of Referral Programs

How can you start building referral programs that actually work and what do they look like? That is what I am going to share with you in this post;

Get started with referrals for only $17

Every Client Referral Programs

Every business should have everyday referral offers that work for any type of customer.  So what do these referrals look like? How can you make them successful? And what elements should they consist of? 

I like to group client referrals into four main types; direct, implied, tangible and community. For more explanation on these referral types see my post, How to Make Your Business More Referable. Every client referral programs are probably the ones you are most familiar with, a gift certificate, refer-a-friend model, donation matching offers, etc. 

Each of these types of referrals offer something different, but they all need the same elements to be successful.

Client Referral Keys to Success

First, everybody needs to win or feel like they have won. The person giving the referral should not be the only one rewarded. If that referral turns around and does business with you, they should be rewarded too. 

Next, there should always be a strong tie back to your brand. A referral program with a strong connection to your brand should also have a strong connection to your most loyal customers.

The last key is consistency in your approach. You need to be consistently nurturing and developing these programs. Referral programs are not set it and forget and they are not a one time play. These programs need to be scheduled regularly. They should be weekly, monthly and quarterly depending on the program type. 

Client Referral Elements

Create easily shareable content

If you want to increase the likelihood that you will be referred then you must make it easy. Build content for your referral programs that are clear and concise so your customers can easily find what they need. This can be done through special referral program landing pages or posts. You can also offer pre-written emails or social content for your referral clients to seamlessly share with their followings. 

Have a special process for referral leads 

Not all referral leads will be ready to buy right away but they are definitely at a different stage in the sales funnel than your regular leads. They have a far more intimate relationship with your business through direct recommendations and should be treated as such with a special funnel built for them. 

Recognition is important to everyone, especially those who go the extra mile 

Your referral clients should receive a special thank you note. You can also publicly thank them through your newsletter or on social media. These thank-you notes can also include special offers for just your referral clients. 

Appreciation is a wonderful thing; It makes what is excellent in others belong to us as well. – Voltaire

Find Your Referrals Champions

Customers and clients who are already referring business to you are what I call ‘Referral Champions’. They are a great customer, they are a returning customer, and they have had a good experience with you. In a lot of ways they are your ideal customers and they know how to connect with someone like themselves. 

Types of Champion Referral Programs

Offer Lunch

Get a handful of your best customers together for a free lunch. The lunches and get-togethers are offered as a thank-you, but the networking that occurs can be mutually beneficial to you, your business, and your referral champions as well. 

Peer-2-peer Teaching

Gathering all of your champion referrers to meet creates an opportunity for them to build a peer-2-peer teaching relationship. This could have further positive impact for everyone involved. 

Exclusive Events & Offers

Create exclusive events or offers just for your high value clients that have continually supported your brand. Track who these people are and target them with something that is more lucrative or enticing than your Every Client Referrals. Highly exclusive offers are more than $10 of your next purchase. These are offers for premium products at cut-rate prices. 

Exclusive Content or Advisory Board

You can create exclusive content or an advisory board of your champion customers. For example, the advisory board could facilitate a quarterly meeting to brainstorm ideas on topics such as expand your target market or unique ways to broaden your customer reach. There could even be incentives involved such as product discounts for ideas that win. 

Keys to Champion Program Success

Have a specific ask

There needs to be a very specific ‘ask’ for champion referral programs. The more specific you can when describing exactly the kind of customer you are seeking, the better your chance of success. 

A client of mine used to take his champion referrals to lunch and show them a list of people he wanted to meet in this client’s church or club. This approach was very direct and as a result, the customer had an easy time connecting my client to the names on his list.

Make it easy and reward them

With any champion referral program, you should make your champion referrers’ job as simple as possible, and you should definitely acknowledge them and publicly thank them for referring your business.

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Ecosystem Balancing

Ecosystem balancing is the idea that you should take your existing clients and think of everyone else who serves them and find ways to form relationships with those people in order to add even more value. 

The benefits for B2B companies

If you work with clients that also work with other professionals or have a B2B model, ecosystem balancing is a great option for you, but not only for referrals. Knowing the individuals in your mutual client’s ecosystem can help you understand what they do for your customer and help you to better serve your customer.

Speaking from experience

A past client of mine, who is an author, wanted to expand her brand.  When we were developing her marketing strategy she told us that she employed an executive coach and an accounting professional. So after we built her brand plan, with her permission, I reached out to the executive coach and the accountant and had a quick session with each of them explaining the newly created plan. Afterward, they had a better understanding of our mutual clients business than ever before and were able to better serve her. 

They were both so blown away by this process that those two individuals actually became referral sources. They wanted to introduce me to their clients because they realized their other clients needed that level of innovation and collaboration. 

Understand the client ecosystem

If you work with any clients that also work with management consultants or executive coaches or accounting professionals, or even have advisory board members, think in terms of how you could actually add value to the relationship that they have with your mutual clients by holding strategy sessions or giving presentations. 

By doing this you will have a better understanding of who the other players are in that person’s ecosystem, because there is real value in meeting those other professionals. For the right business, the ecosystem balancing approach could be really potent. If you want a deeper understanding, I talk more about ecosystem balancing in my book, The Ultimate Marketing Engine

Internal Referrals

One of the most valuable referral systems you can build comes from within your organization. When given the right information, incentives, and tools, your internal team can be a great referral source.

Teach your team marketing strategy 

Teach them about the core message, explain who your ideal customer is and what makes your business unique. By doing this, they will feel more involved and have a better understanding of the business. Ultimately leading to a better understanding of your ideal customer and improved internal referral generation.

Make it easy for them to share good news about the business

You can do this by developing simple ways for your employees to share business news and offer their feedback or opinions. For example, you could produce easily shareable content for you internal team to re-post on their social media platforms.

Create buzz

Keep things exciting by offering rewards or contests for referrals. This adds an element of fun to the work and can create a positive and productive internal culture for your business.  

Customers and Hiring

Use your referral system for hiring. Some of your best candidate recruitment people are the ones that already work for you and love what they do. Use them as a resource and leverage their insight.  

Your Referral Partner Network

Create a strategic partner network by building a best-in-class team that offers services your customers might need. 

Start by identifying key players and recruiting them for your partner network. You can find them by polling your best clients and seeing who else they work with, who else helps them, and who else solves their problems for them. 

After you have identified six or seven potential strategic partners it is time to begin the conversation. Start by writing, what I call, the perfect introduction in reverse. Which is a process that lets a potential partner tell you exactly how to refer your customers to their business.

Example

The Perfect Introduction, In Reverse

“Hello,


We have customers that we believe could benefit from your services. And we’d love it if you would take a moment and tell us the best way to refer you to our clients. In order to make it easy for you to tell us how to spot your ideal client and refer your services to them we have included a form with this note. We have also included a completed example for your reference.

Regards,” 

After you have built the relationship, establish how you can continue to work together to build up each other’s referral business.

Some examples are; create content together, create special offers for each other’s clients, create co-marketing opportunities, interview each other, host webinars for each other’s audiences, hold events together, etc. 

I built a great deal of my following by going to organizations that I knew had small business owners as part of their universe and offering to do educational webinars for their audience or offering free eBooks that could be co-branded. These deals helped me gain exposure to new referrals and helped them win with their audience. 

Below are some examples of partner network ideas 

Notice how they all are unique to the industries involved, provide value to clients, and both businesses involved win.

  • A partnership between wedding caterers and florists. This could include a third party, a wedding planner, and they all offer each other’s services to their clients that are getting married.
  • Service technicians and painting contractors. Upon completion of services the technician can offer 10% off of the painting contractor services, increasing exposure for both parties. 
  • This one is creative; a financial planner and massage business. Once a year around tax season the financial planner can bring in a masseuse for a 15-minute shoulder massage while the customers are waiting to speak to their accountant. The masseuse could hand out their business cards and give samples of their services. In the mean time the accountant is getting more business because all of their clients will be talking about their unique practice.

Start Your Very Own Expert Club

Create a program for your ideal customer by starting an expert marketing club. You can host a monthly breakfast or webinar for your audience and bring in additional experts to speak.

Best Practices

There’s an example in my latest book, The Ultimate Marketing Engine, where I worked with a real estate agent who moved to a new town. She was having trouble establishing her business so we brainstormed how she could start reaching out to the local community.  

The result; she started her own networking club for business owners where she talked about social media and marketing because she was also experienced in that field. In these meetings she didn’t sell her business as a realtor at all, but guess who the members thought of when it was time to buy or sell a home? She built her entire massive real estate business by hosting these monthly networking clubs.  

Another great example is Derek and Melanie Coburn in Washington DC. They have an organization called Cadre. Derek was a financial planner who wanted a better way to network. He brought a group of folks together and they started curating content for their businesses. This small group turned into a 300-person networking organization. Eventually he sold his financial planning business and now he and his wife run the networking organization full-time.

Referral Mastermind

Lastly, you can create a mastermind group for referrals. This option is very beneficial to B2B industries. If you’re a coach, consultant, or marketer it is a no brainer. The referral mastermind approach is similar to the partner network approach, but you work directly with your own clients instead. 

How to get started

Start by setting up monthly training for your clients around a specific topic. You can charge money, but my gut feeling is that it would generate so many referrals for you that it would be worth it if you made it complimentary. 

Once you build a reliable audience for these smaller training sessions you can start to offer them the mastermind concept. You wouldn’t even need to teach anything necessarily, just facilitate everyone coming together to learn from each other.  

Offer even more value

If you wanted to add another layer to your referral mastermind you could offer to run one for your client in exchange for referrals. In this system you would bring their clients together to help them make their business more successful, but it would benefit both parties in the long run.

Example monthly meeting agenda

Through the mastermind process you are naturally sharing referrals with each other. And that is where the magic really happens. When you start working together and build up each other’s businesses, leading back to that everybody wins mentality. 

Now it’s time to implement some of these referral program ideas and best practices to generate your best customers yet. Don’t wait, get started today!

6 Simple Ways to Get Your Customers Talking

6 Simple Ways to Get Your Customers Talking written by John Jantsch read more at Duct Tape Marketing

Word of mouth marketing is considered by many to be the most desired form of marketing. The trust, referrals, and overall brand-building buzz that’s garnered by customers spreading the good word to prospects are worth its weight in gold. Some products, services, and experiences naturally produce chatter, but there are certain things that any company can do to stimulate word of mouth and cash in on the buzz.

Here are six ways to get your customers talking about you and your organization:

1) Ask them – The best word of mouth starts with “word of listen.” Call your customers up and ask them why they buy, why they stick around, and why they tell their friends about you. You might be a bit surprised by their answers. Hint: it’s usually not the stuff you have in your new marketing brochure. You stand a far greater chance of attracting the right customers and the right buzz if you really understand what your current customers value about doing business with you. This goes for online and social media listening as well – what are they saying in Slack channels, blog comments, on LinkedIn, or Twitter?

2) Teach them – Sometimes great word of mouth just happens, but sometimes you’ve got to help it along. One way to do this is to make sure you are teaching your customers how to spot an ideal client, what a prospect in need might say when looking for your products, and how to properly and concisely describe how your company is different. Of course, in today’s hyper-social media world you should also be teaching your happiest customers how to write reviews on Yelp, Google My Business, Facebook Ratings and Reviews, Insider Pages, and CitySearch-type rating sites.

3) Star them – Letting a customer testimonial or success story go uncaptured or untold is downright criminal in WOM circles. Today you can easily record customer testimonials on an iPhone or Android or you can start doing video interviews over Zoom to record their success stories. These “real life” bits of content are gold and turn your featured customers into talking referral billboards for your brand. Want to take this idea up a notch? Hold a customer party and film a dozen or so at one time in a great atmosphere – this alone will get your customers talking.

4) Include them – People like to be asked what they think, it’s just human nature, but it’s also a great way to get some sound advice. Create a round table discussion group made up of select customers and charge them with advising you once a quarter or so on new marketing and business initiatives. (Reward them for this in some way as well.) This can include advising on everything from a product extension to the look and feel of your website redesign. Members of your marketing round table will become natural ambassadors for the brand. (You can do this with simple video chat meetings – Zoom or GoogleMeet)

5) Video them – People are more likely to respond t0 a personalized video over a generic one any day. People’s email inboxes and newsfeeds are flooded with businesses trying to sell to them so much so that it’s hard to stand out in all of the noise today. One-to-one video is a highly effective way to stand out in the crowd. You can use a tool like Loom to send a prospect a quick personalized message about something you saw on their website, invite a lead to sign up for an event you’re having that you think would be valuable to them, or follow up with a potential client with a personalized video instead of an email.

6) Surprise them – I like to think I saved the best for last – few things get people talking faster than surprising them. This can include doing something that was out of the blue and much appreciated to just giving them more than they bargained for. I remember a PR firm that was pitching me some business and the account rep showed up to meet with an apple pie (I’m still talking about it.) I once worked with a financial planner that hired a mobile auto detail firm to detail his customer’s cars during their annual review – that created some buzz.

The bottom line of course is that you’ve got to do good work, do something that somebody appreciates, and create an experience worth talking about, but then, prime the pump and leverage all that greatness.

How to Create Your Referral Engine

How to Create Your Referral Engine written by John Jantsch read more at Duct Tape Marketing

Marketing Podcast with John Jantsch

Today I want to talk about what is probably the highest pay off marketing activity right now. Obviously there is a lot going on in the world today. I find that a lot of people are looking around trying to figure out what they can do marketing-wise. Obviously a lot of businesses are being displaced. With the massive change businesses are feeling it is also being experienced by customers. Long time customers are being disconnected from longtime providers. Customers are being forced into changing their purchase behaviors, how they research, think, and buy.

This can be leveraged as a huge opportunity. Many companies are still looking at how to remake themselves. But I’m suggesting it is the time to look inward. To seek referrals from existing customers and strategic partners as the primary lead generation initiative. Listen to find out how to do this.

Tips discussed during the podcast:

  1. Highest payoff marketing activity right now is referrals
  2. How to ask your existing customers for referrals
  3. Referrals can benefit both your business and customers
  4. Some people may need what you do so reach out to them
  5. Talk to other businesses to strategize and find ways to help each other
  6. Make partnering up with other businesses successful and bring something of value to the table

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

 

Klaviyo logoThis 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.

Want to learn more? Head to Klaviyo.com/ducttape to schedule a demo.

Generating referrals is your highest payoff activity right now

Generating referrals is your highest payoff activity right now written by John Jantsch read more at Duct Tape Marketing

Many businesses have been displaced during this game-changing pandemic. I hope that you are not one of them.

One of the things, however, that few people are talking about is that the massive changes being experienced by businesses are also being experienced by customers.

In other words, buyers are being displaced from long-time providers or simply choosing this disruption as a time to rethink how to find, choose, buy from, and remain loyal to the businesses they patronize.

There has rarely been an environment in which more customers were forced into changing their purchase behaviors.

So while some businesses are still struggling with how to remake themselves, I want to suggest that right now is the time to look inward and seek referrals from your existing customers and partners as a primary lead generation initiative.

Ask your customers

First and foremost, communicate with your existing customers. Chances are they are being asked by friends, neighbors, and colleagues for new resources. (I belong to a couple of Facebook Groups where this has become common.)

Ask them to keep you in mind for referrals. Maybe even run a campaign offering bonuses for referrals.

Tell them why now

People need what you do, so if you’re confident you can help, you are doing a disservice if you don’t offer to help. All that to say, you should tell people you know many folks have been disrupted and find themselves looking to make a change – you could be that change. Own it!

Seek new partners

Strategic partners – businesses that also know lots of your ideal customers can be an excellent resource for spreading the word about how awesome you are.

Make a list of other businesses you admire who might serve your same kind of customer and start having conversations about working together. You can refer each other, make intros, or even find a way to co-market to each other’s customers.

Make it valuable for them

As you begin to reach out to potential strategic partners, think first about ways you can make the relationship valuable to them. Can you offer to write a guest blog or let them do the same, can you interview them, can you allow them to co-brand a great piece of content you have, can you do a free webinar for their audience? Can you refer a customer now?

This is how you get a potential partner’s attention.

Teach referrals

Lastly, if your ideal customers are businesses, then consider creating a campaign where you actively take some of what I’ve shared today to teach them how to get more referrals. Imagine how valuable you’ll become if you help them achieve the goal of getting more business – no matter what you sell to them currently?

Create a networking group of your current clients with the primary purpose of teaching referrals and I can assure you, you’ll start getting more referrals.

I wrote a book on this topic. If you want to get a bunch of ideas on referrals and teaching referrals, it’s the cheapest way I know – check it out The Referral Engine.

The Role of Your Website in Guiding the Customer Journey

The Role of Your Website in Guiding the Customer Journey written by John Jantsch read more at Duct Tape Marketing

Today’s customer journey is more complex than ever. From social media to paid search to offline marketing, there are dozens of ways someone can discover your company. The main role of your website in this twisting journey is to be a solid central point.

While prospects may discover your brand anywhere, you want to be driving that traffic from those disparate points back to your website. Your website is the one online asset that you have complete control over, and a well-designed website is the key to taking the reins on guiding the customer journey.

Let me walk you through the role that your website can and should play at each stage of the customer journey.

Know and Like

Prospects discover brands through all sorts of channels, and it’s entirely possible that your website is not the first place they’ll encounter you. It might be through a local listing service like Yelp, or on social media, or maybe they see a truck with your logo driving around town—who knows! But every other channel where you are present should include your website’s URL, so that it’s easy for prospects to go there and learn more.

Additionally, there are steps you can take to give your website the best shot at being the first point of contact with your brand. Undertaking keyword research allows you to see the real terms that searchers use when looking for the solution your business offers. Once you know that information, you can optimize your website so that it ranks for those terms. Couple keyword research with some effective, descriptive metadata, and you’ll be well on your way to generating more website traffic through organic search results.

Once prospects land on your website, you want to greet them with messaging and design that helps them come to further know and like your brand. Your homepage should include a promise to visitors, front and center. The promise should demonstrate that you understand their pain points and know how to solve them. Follow that up with a call to action; something that drives them to take a logical next step with your brand. This can be something like signing up for your newsletter or a free trial—nothing that includes too big a commitment. They did just meet you, after all! You wouldn’t ask someone to marry you at the end of your first date.

There are a number of other elements I recommend including on a homepage, but what’s most important is that you share what it is that you solve for your customers and how you can help others solve those same problems, too.

Trust and Try

Once a prospect has your brand on their radar screen, your website can help to strengthen their trust in you, until they finally decide to give you a try.

There are many trust-building elements that you can and should include in your website. Testimonials and case studies are a great way to demonstrate the value you’ve brought to other customers. They help to build an emotional connection with the prospect, who can see themselves reflected in the needs and struggles of your existing customer.

Content is also a critical element in building trust. Blogs, podcasts, and videos are all ways to share meaningful content with your audience. Your website should be the central location where all of your content lives, so that anyone interested in learning more about what you do can discover the wealth of knowledge you bring to the table. I also strongly advocate for the creation of hub pages. These pages bring all of your content on a centralized topic together on one page. They establish you as an authority on the subject (and they’re great for boosting your SEO, too!).

Once those trust elements have won over your audience and they’re ready to give you a try, you want to greet them with an appropriate call to action (CTA) that guides them to the next phase of the customer journey. Include relevant CTAs on your trust-building pages. At the bottom of your hub page, offer free access to a paid report. At the bottom of your testimonials page, include a CTA to schedule a free consultation.

Buy

You’ve reached the moment of truth! Your prospect is ready to become a first-time customer, and it’s again up to your website to help you make it happen.

At this stage, it’s about reducing friction in the purchasing process as much as possible, to ensure that you don’t lose any interested prospects at the last minute because of a frustratingly complex purchasing process. If you have an e-commerce shop, reduce the number of clicks it takes to add items to a cart and to complete check-out. Ask for as little information as possible to complete the sale. When customers feel bogged down with long forms or a circuitous route to check-out, it’s possible you can lose them at the moment of truth.

If yours is a service business, create a simple online sign-up form, so that prospects can easily make an appointment. Use a platform that doesn’t require them to register for an outside app or service to schedule. And including thoughtful touches, like a system that automatically adds the confirmed appointment to your customer’s calendar app of choice, is a nice way to make the buying process as seamless as possible.

Repeat and Refer

Once you’ve won over a new customer, your website’s work isn’t over! There are opportunities to turn that one-time customer into a lifelong one—someone who refers friends and family along the way.

A well-designed sitemap can help to encourage repeat purchases. When you’re building your website, think about the best way to showcase related product and services. Driving customers who have already made a purchase to another area of your website that covers a complementary offering is a smart way to drive upsells and repeat business. A CRM tool that’s synced up with your website is also a great way to keep track of past purchases so that you can use email marketing to send related offerings to interested customers straight to their inbox.

Your website can help you to collect feedback and reviews, which can in turn generate referral business. Through your site, you can link out to your profiles on Yelp, Google My Business, and Facebook, making it easy for your existing happy customers to share positive feedback about your business on these other platforms. You can also solicit testimonials from your existing customers, which you can feature on your website.

Your website is the heart of your online presence. It needs to be ready to work for you and your customers at any stage along their journey. Whether they’ve just discovered you via a new search or are coming back to make their 100th purchase, your website should make it easy for them to find all of the information and support they need.

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.