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Education is the Key to Effective Referral Marketing

By John Jantsch

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Published: 25Jul2006
Word count: 707
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One of the few complaints I hear from small business owners when it comes to generating business or leads by way of referral is that too many of the referrals they are offered aren’t a fit for the business. The referrals are either unqualified, don’t need the firm’s offerings, can’t afford the product or just don’t fit the typical profile of an ideal client for the receiving firm.

If this is your referral reality, then you know that chasing leads that don’t fit your target client can be a grand waste of everyone’s time and energy. The primary reason for this affliction though is that most small business owners and independent professionals don’t take the time to educate their referral sources.

The typical referral request may go something like – “know anybody that needs what we do?” Okay, I know lots of people, here you go. Have at it!

The solution to this is really quite simple. I’ve created a tool I call the Perfect Introduction, as part of my Referral Flood program. The Perfect Introduction is a document (although is can take many forms including a web page) that contains answers to the following questions.

How would know if I spotted your ideal client?

Describe, in great detail, the type of clients you work best with. This step will help assure that you get highly qualified leads and make it easier for your lead source to think of prospects that fit a narrow description.

What would I say to best position your business?

Give your referral source the exact words you would like them to use when introducing your products and services to prospective referrals. Give them a simple, memorable way to explain the benefits you have to offer. Remember, many of your best referral sources may not be actual clients who can talk eloquently about your brilliance, give them your core marketing message so that the expectation they set remains consistent.

How can you add value to my relationship with a referred lead?

This is a multi answer question. Show your prospective referral source what you do to make them look good and outline any offer you might have cooked up to reward and motivate your referral sources. By the way, money isn’t always the best referral motivator. Showing appreciation, helping referral sources meet their goals, and making referral sources look good are all powerful motivators.

What do you do with the leads you receive by way of referral?

Outline the exact steps you take when you receive a name or introduction. This step allow the referral source to get comfortable with your marketing process. Everyone has some fear that the referred party may abuse the relationship by hard selling or calling every night at dinner time. Put these fears to rest by outlining your very educational approach. (That is your approach, right?)

Now that you have your Perfect Introduction document in hand you can go out there and confidently let the world know that you are someone they can feel great about referring.

Another very powerful aspect of this tool is that often, even if you don’t realize it, you are in competition with others who are seeking referrals. CPAs, for instance, are heavily targeted by service professionals seeking referrals. With your referral process outlined in a very professional manner, you will stand out in the referral competition for some of the best potential referral sources.

And Now a Powerful Twist

Once you have created your Perfect Introduction you should also consider using this tool to open doors with potential referral sources. Send a letter to 100 targeted referral sources with a copy of your Perfect Introduction and a blank Perfect Introduction form. Inform the recipient that you have clients and prospects that you believe could benefit from their products and services. Ask them to complete the enclosed Perfect Introduction form (using yours as an example) and send it back to you as soon as possible. Do this and you will find new referral marketing doors swinging wide open for you. In addition, you will be better prepared to give referrals to your clients and prospects, kicking the referral cycle into even higher gear.

John Jantsch is a veteran marketing coach, award winning blogger and author of Duct Tape Marketing: The World's Most Practical Small Business Marketing Guide published by Thomas Nelson - due out in the fall of 2006. He is the creator of the Duct Tape Marketing small business marketing system. You can find more information by visiting http://www.ducttapemarketing.com

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