Referral marketing is a specific set of strategies designed to bring a business owner new clients, qualified leads and repeat business without the help of other advertising. My consulting practice, like many small businesses got its first clients through referrals. But the real power of referrals comes through a planned referral strategy that yields regular referrals over time, not just to get a business going.

Here’s why you can’t ignore the value of a referral marketing strategy:

1. Credibility and trust –When a prospect receives a referral to someone who can provide what they need, there’s a level of trust associated with it due to the relationship of the person making the referral. That shortens the sales cycle.
2. Better prospects – When you educate your referral partners about what makes a good referral, you can narrow your focus so that it benefits everyone. Getting specific with what you’re looking for makes it easier for someone to spot a perfect referral. For example, a chiropractor who is looking for people suffering from migraines is more likely to receive qualified referrals than by simply telling people that he is looking for people in pain. Of course, the best referrals are those made when someone believes they can help someone else. The more they know about what you do, the better. It’s a win-win situation, and the person making the connection feels like they’ve won too.
3. Know your Timing Triggers – Timing triggers are those things that make people start looking for a product or service. For example, the trigger for an insurance agent would be when a student turns 16 and his parents need to buy insurance. Using this information to plan your messaging and the timing of your marketing will yield better results.
4. Get intentional and seek referrals – Towards the beginning of an engagement mention to your client that you’ll be asking them for a referral down the road. Then, when they’re seeing some real benefits from working with you, ask for the referral. While they’re in this honeymoon stage, giving a referral will be easy. Furthermore, when you put trust in them to help find qualified referrals for you, they’re more likely to listen and learn more about what you’re looking for and to become a more loyal fan of your business.
5. Follow-up – Routines make the difficult things simpler. Put in place a routine to follow-up with both prospects and referral sources. For prospects, have some regular steps that you use to keep in contact with prospects. For referral sources, be sure to keep them in the loop on what’s going on in your business and to acknowledge them for bringing clients to you. Something as simple as sending a thank you card goes a long way to make them feel appreciated.

So, what’s your referral strategy? Do you actively work with referral partners who are educated about your product or service? Spend some time to figure out where you’ve got some holes and then make the effort to plug the gaps. You’ll reap the dividends for years to come.

For more on this topic, read John Jantsch’s The Referral Engine.

About Ann Gusiff

Ann is an Authorized Duct Tape Marketing Consultant based in the San Francisco Bay Area. She's dedicated to her clients' success in mastering their own marketing and is a firm believer in the Duct Tape Marketing principle of "Strategy before tactics". She is also a Constant Contact Authorized Local Expert and is an active speaker. Ann is the founder of Clothes The Deal, a Los Angeles based 501(c)3 nonprofit that provides interview clothing to needy job seekers. She earned an MBA from UCLA Anderson. A little-known fact is that Ann speaks Mandarin Chinese and studied at Beijing University.

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