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Do you want to know the best way to motivate referral sources? Well, perhaps you’ve guessed it’s not money or for that matter direct compensation of any form. There will certainly be exceptions to this, but the perfect referral motivation is to tap our deep seated human need for community. People get great pleasure from offering help and knowing they can be called upon as a source of reliable information.

When referral sources are motivated, intentionally or unintentionally, out of a desire to help, they will often go to great lengths to do so. On the other hand, when the motivation is monetary, they will view it as market transaction and the motivation is often significantly lower or certainly different - ranging from indifference to distaste depending upon the industry.

In a fabulous book, Predictably Irrational by Dan Ariely, the author conducts numerous experiments around the idea of social vs. market norms that shed some very tangible proof on this idea. (Dan will appear on an upcoming episode of the Duct Tape Marketing podcast.)

As Margaret Clark, Judson Mills, and Alan Fiske suggested a long time ago, the answer is that we live simultaneously in two different worlds-one where social norms prevail, and the other where market norms make the rules. The social norms include the friendly requests that people make of one another. Could you help me move this couch? Could you help me change this tire? Social norms are wrapped up in our social nature and our need for community.

The second world, the one governed by market norms, is very different. There’s nothing warm and fuzzy about it. The exchanges are sharp- edged: wages, prices, rents, interest, and costs- and- benefits.

So, as a marketer I believe the message is this - can you design a referral program that taps into people’s desire to help? Can you give them, in a systematic way, the ability to use their influence to add value to the relationship they have with you or with their network?

Well, yes, and here’s the simplest way to do that - give without keeping score. Make referrals, make people thrilled, make time to help others get what they want and they will be motivated beyond belief to help you get the same.

Posted by: John Jantsch on Jun 25, 08 | 9:09 am
Category: Referral Marketing | Tags: , Dan Ariely, Predictably Irrational