How to Turn Your Local Business into a Referral Engine: A Book Review

29 Apr 2010 | written by Janet Thaeler for the SEO, Small Business Tips section(s)

Psst! We’re giving away a free SIGNED, ADVANCE copy of John Jantsch’s “The Referral Engine.” Read on for details.

“The relative health and success of most businesses can be gauged by this simple factor — how many clients refer friends, neighbors and colleagues.”
- The Referral Engine, Teaching your Business to Market Itself.”

If you ask any local business their main source of business, most will say it’s through referrals from other customers. Even businesses who get referrals now would like more. Have you ever thought that you shouldn’t leave this to chance? But most local businesses do.

At OrangeSoda we focus a lot on one referral system – search engines. But there’s a lot more you can do–both online and offline–to generate more leads through referrals. John Jantsch of Duct Tape Marketing tells you how to create referral systems in your business in his new book, “The Referral Engine, Teaching your Business to Market Itself.” Stay tuned–at the end of this post I’ll tell you how you could win my copy.

Referable businesses stand out and clearly and simply communicate how they are different from the other choices. The amazing part is, if you do this well, you will no longer have to compete on price. With the economy choking, this would be a huge relief, wouldn’t it?

“Every widely referred business I interviewed was one of the highest priced options in their respective markets and felt no pressure to compete on price.”

This is because if there is not a clear difference between your product and another people will choose the least expensive option. However, if you’re innovative you can charge more. iPods are a good example — even though there are a lot of mp3 players that cost less people will pay more to get an iPod.

If the act of deliberately seeking referrals is daunting to you, remember this: our brains are wired to make referrals. We like to feel validated and feel validated when we do something good — like refer business to someone. It’s satisfying.

We also like the element of surprise or delight, like the toy in the Cracker Jack box or the unexpected gift or touch that makes something stand out. Here’s an example. Gans Ink for offset printers comes in small paint cans. The company tosses in a handful of tootsie rolls in the packaging, in with the styrofoam packing. It is a small gesture but completely unexpected. It made me look forward to getting a new shipment of ink. That’s a talking point that could lead to referrals.

The book goes over 6 steps a potential customer takes before they will refer your business. Your goal is to build trust until someone buys from you and is pleased enough to become a repeat customer. I loved the story about a food business called Zingerman’s (zingermanscommunity.com) who has made $36 million in sales because they’re good at this.

Throughout the book I paid attention to what referrals the author made to other businesses. Sometimes he just mentioned them and other times he endorsed them. Interestingly, he endorsed books more often than products. That makes sense coming from an author. I find it easiest to refer books to people, too.

I particularly liked that he included sections about how marketing and advertising are different today. Not less effective, just changed. He also included how to approach Facebook and, my favorite, PR (or, public relations) as a referral engine.

“PR, and by that I mean positive mentions of your people, story, products, services, and activities in the media consumed by your ideal target market, is a woefully underutilized tool for lead and referral generation.”

The fun part is realizing that his book is doing just what it advocates–it’s a referral engine for John Jantsch. Reading it could be the first step in getting more referrals for you, too.

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Now for an offer: who wants to win a SIGNED copy of this book?

It goes like this:

  1. Leave a comment telling us how you currently get referrals for your business
  2. Leave a comment about the last business you referred and why.

Winners will be chosen by a panel of judges here at OrangeSoda on Tuesday, May 4. In the event of a tie, we’ll use Random.org to randomly choose one of the top comments. We’ll contact you to get your mailing address. In the event we cannot reach you by Thursday May 4, 2010, we’ll choose a new winner.

7 Comments

7 Comments

  • Aaron |   Apr 29th, 2010 at 9:39 am

    Well currently since my site is still new and growing, its all from SE’s, but hopefully soon the PPC stuff will kick in.

    And probably the last business I refereed to someone else was Orange Soda. I was showing a friend your blog and the last prank you did, and told them about your services and how they rock.

    Thanks OS, for all you guys do!

    Aaron
    http://www.littleaton.com

  • Janet Thaeler |   Apr 29th, 2010 at 12:38 pm

    Aaron,
    Thanks for the referral! I didn’t expect when I asked that someone would say OrangeSoda. So thank you. I love how you mentioned the prank – the video doesn’t compare to seeing it when I walked into work that morning. It rocked.

    Hope the PPC referral engine kicks in strong for you.

    Janet

  • Scott |   Apr 29th, 2010 at 1:20 pm

    We currently get referrals by **asking for them**!! We also do things to maintain customer relationships long after we have completed a transaction by continuing to offer valuable information at no expense. If we are making deposits into our customer relationship account, they seem happy to return the favor by recommending us to others.

    We also deputize our commercial clients to refer their clients to us by rewarding them for referrals with a gentle “bribe”.

    A colleague recently asked where he should take his family for a “first time I’ve seen the ocean” trip. I helped to convince him that San Diego / LaJolla should be the beach destination of choice.

  • Lisa Pecunia |   May 3rd, 2010 at 6:25 am

    Interesting post, and it sounds like an interesting book.

    I get most of my referrals for my business from two professional networking groups I belong to. But I also have blogs that I keep up with fairly regularly and do as much Tweeting as I can tolerate (probably not enough). My tweets actually do get RT’d sometimes! People will email me and say “I saw your blog post…” LinkedIn is also a good lead generator, one that I don’t exploit nearly as much as I should. I’m starting a new internet marketing “training program” for small businesses (emarketingsmallbusiness.com) and I think my LinkedIn efforts will need to be revived to help me get some exposure for that.

    The last referral I gave was for a dessert chef/caterer in one of my groups. I introduced her to my favorite local coffee shop owner who is opening a new location downtown and may need to offer some new upscale treats to his customers.

    - Lisa

  • David Neville |   May 4th, 2010 at 9:02 am

    I just referred a friend to Western Governors University as a low cost alternative to the University of Phoenix. Cost savings was the factor that mattered. I really want the free book. It would make me feel like a winner. Go and do the right thing.

  • Diana |   May 5th, 2010 at 8:46 am

    The business I work for (a PEO) occassionally reminds our clients to refer us to other small business owners they know. We honeslty don’t generate much business that way.

    The last referral I made was to several friends to the website Pinupgirlclothing.com becuase they have fantastic clothing, great customer service, and good sales.

  • Dan Garfield |   May 5th, 2010 at 2:26 pm

    Congrats Scott! After careful consideration we voted you the winner! We’ll be contacting you via email shortly to get your address.

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