A Conversation with John Jantsch, author of THE REFERRAL ENGINE

Why did you write this book?

John JantschI wrote this book because after speaking with thousands of small business owners it became pretty clear that, while most businesses rated a referred lead as one of the best they could receive, very few knew how to go about getting them systematically.

Why is referral generation one of the most effective forms of marketing?

A referred lead comes with great upside. In many cases referral generation can happen with very little marketing expense. Referred leads are generally more qualified and ready to buy because a trusted friend explained what you do and how you do it. And my favorite, a referred lead expects to pay a premium to get the result that their friend explained is only possible by working with you.

Why do people willingly make referrals?

There’s plenty of psychological, social, and even physiological evidence to suggest that humans are wired to make referrals. It makes us feel good, part of a community, part of something bigger than ourselves. From a practical point of view, it also makes great business sense. If we build a network of referral sources we become more valuable to our own clients and build social and financial capital with the sources like successessay we refer regularly.

Why don’t most businesses have a systematic approach to referrals?

I think the reason the reason many people don’t adopt some systematic approach to referral generation is because while they may receive a number of referrals they don’t really understand why. Referrals come about most often by way of a great customer experience yet most businesses approach them by way of some sales or service tactic. A referral generation strategy steeped in a great customer experience is the first order of a systematic process.

What is the single greatest factor determining how referrals are made?

Trust is the single most important reason a recommendation is made, and conversely, lack of trust is the single greatest reason referrals don’t happen.

How do we build quality referrals that fit our business strategy?

I think the key to acquiring referrals that fit your business strategy is to systematically educate your referral sources. With your clients you can do this quite naturally as you teach them about your business in the lead nurturing and conversion process. With strategic partners it’s important to take a more direct process that helps them understand how they would spot your ideal client and how they could best explain how your business and approach is unique.

In what ways can online social networking be used to generate referrals?

Online tools and social networks offer businesses some very powerful ways to deepen relationships with customers and partners particularly when used to supplement face to face offline tactics. By using a tool such as LinkedIn to connect with someone you just met at a Chamber of Commerce event you immediately open the door to build a relationship much faster than simply relying on a phone follow-up.

Aside from simply providing superlative services/products, what are some of the best ways to generate referrals?

If you provide great products and services you will likely receive your share of referrals, but organizations can also make referral generation an expectation by presenting the idea of referrals during the sales process, following up with customers to make certain they had a great experience, creating ongoing campaigns that focus on the referral message, and actively building, educating and activating a referral partner network tend to receive the bulk of their new business by way of referral.

Can any business build a referral network?

Any business can build a referral network when they realize what an important tool it is. Simply reaching out to businesses that also serve your ideal customer with a genuine interest in learning how they can help your customers is the first step. From this point of view you can move to activating this group by offering to provide them with content they can use with their clients, web or in person seminars, or by setting up a joint blog that features your entire network and acts as a lead generation tool for all parties.

What kind of effort is needed to begin receiving referrals?

The first step is to take a good hard look at your overall referability. Are there gaps in the customer education and service process? Is every customer touch point a positive one? Is the overall customer experience one that leaves them thrilled? Study every way in which the business comes into contact with a customer as they move from know, like, trust, try, buy, repeat and on to refer and plug any gaps in the experience. This simple step will get you on your way to a consistent flow of referrals.