Recently, I spoke with marketing guru John Jantsch of Duct Tape Marketing fame about his new book, The Referral Engine: Teaching Your Business to Market Itself. I was intrigued by this title because, well, it's been a long slog through the downturn in which most small business owners I know have had to market their fannies off. I was curious to hear about how they could switch into glide instead and create marketing programs that would bring a steady stream of new customers without their having to beat the street and haunt every Chamber event in town.
Jantsch says when he started the book, he thought it would be all about marketing strategies. But as he researched, he saw many businesses just aren't set up to generate and handle a high volume of referrals. So half the book is about building a business that's more referrable.
How do you do that? Start by identifying your prime targets for referrals -- the customers you know love your business.
"If you just scatter and say 'Hey, anybody know anyone who needs what we do?' you don't get great results," he notes. "Target customers who are already your champions."
Then, give those customers some love for referring you customers -- whether it's a $100 check, a free haircut, or whatever's appropriate for your business.
Even better than tapping your customers, build your own strategic team of related businesses in your town. Form a marketing group and see what packages you can come up with to draw customers to all your businesses. Where a good customer might refer you a handful of new customers, business partners can refer you thousands.
"A graphic designer I know was able to charge whatever they wanted for logos," Jantsch relates, "because when you bought the logo, you also got free Web hosting, and 500 business cards from her strategic partners. Suddenly, her logo was worth a lot."
Design a creative referral offer that fits your customer base. You can improve your results by making your referral offer a memorable one.
One upscale remodeling contractor was offering $1,000 for a referral -- but his clients were a bit turned off by the idea that they needed money. He switched to offering a free carpenter for a day to fix small problems, and referrals exploded.
"Cash can feel sleazy or be a turnoff," he says.
The back of the book has chapters full of creative-marketing tips for programs that encourage referrals. One I loved hits another arm of your referral machine -- your workers.
One of the companies Jantsch writes about gave their employees a $500 gas card if they would get their vehicle wrapped in a company message. What a great way to expose thousands of potential new customers to your brand! And with that coupon in their pockets, workers are probably happy to stop and talk the company up to anyone who stops to ask about the ad on their car.
What are you doing to turn your customers, employees, and business partners into referral machines for your business? Leave a comment and let us know.