How To Build a Business People Want To Refer

Thursday is guest post day here at Duct Tape Marketing and today’s guest is from Don Campbell – Enjoy!

What if – instead of relying on expensive paid ad campaigns and direct sales, your business thrived on referrals from happy customers?

That’s the promise of a book I read a few months ago that profoundly changed my business – The Referral Engine.

Customer service has always been important for my company Expand2Web. But reading this book made me realize something very important. Although we were getting referrals from our customers naturally, we weren’t really leveraging our heavy – and expensive – investment in customer service.

We weren’t setting expectations about referrals early in the sales process, we weren’t making it easy for people to refer us to others, and we weren’t ASKING for referrals, even though most of our customers are happy to give them!

The Referral Engine gave us a structure to leverage that investment in customer service and provide more value to our customers at the same time.

Following one of the exercises in the book, we mapped out every customer interaction to see how we could offer a truly exceptional experience, and build it in a way that customer referrals would flow naturally.

For our business, here’s what it looks like:

Customer Interaction Touchpoints

Customer Interaction Touchpoints for Expand2Web

As you can see from the map above, there are many ways we interact with our customers. Even more than we realized at first.

When you think about it, you start interacting with potential customer the first time they experience your brand, or land on your website. These interactions continue into pre-sales questions, the purchase process, support, and even beyond.

Our Referral Action Plan for Expand2Web:

Based on our map, here are a few of the things we did to improve our customer experience and encourage referrals:

1) We started setting expectations with potential customers early.

Before a customer even buys our product, we started setting expectations that we would ask them for a referral (when we deliver on our promise).

On the sales pages and other pages about our products, we explain that our mission is to make them so happy and successful they will want to tell their friends and co-workers about us.

This has the dual purpose of setting expectations that we are committed to their success and happiness, and that we will ask them for a referral once we’ve delivered on that promise.

2) We created a “Customer Welcome Kit” that welcomes every new customer, and helps them succeed.

Another excellent suggestion from the book was to create a customer welcome kit. We followed this advice and created a customer download area so that each customer could log in and get 24/7 access to the latest version of our software, our support, and step-by-step training guides.

3) We added some unexpected bonuses for our customers in the customer welcome area.

For example, we found that the biggest issue for many of our small business customers was learning how to do things in WordPress. So we licensed a series of 20 short WordPress tutorial videos and included them free to our customers.

We are also experimenting with other “surprises” for our customers, like written thank you notes and gifts, and other fun ways to let them know we care about them and their success.

4) We now ASK for referrals at key points in the customer relationship, and make it safe and easy for customers to refer us to their friends and family.

We’re learning the crucial points to ask for referrals, and how to do that in a way that our customers feel safe and want to refer us.

For example, in the book, John points out that there are key times in your customer interactions that are best for asking for referrals. Strangely, right after a support request is one of them. That wasn’t obvious to me at first. Now we’re working on ways to politely ask for referrals from our customers in a risk free way, and to make it easy for them.

Benefits For Us *And* Our Customers

This is a process that we are continually refining and improving. But already it has helped our business tremendously in four ways:

  1. An improved customer experience. Our new customer checkout experience and welcome kit has led to more happy customers, and lots of nice comments from them.
  2. A better product. By reaching out to customers in this way, we get better feedback that goes right back into making our product better. We’ve had several new releases based on insights and feedback from customers, and have another one coming out shortly that has some fantastic new capabilities driven by customer feedback.
  3. Better relationships. Not being a natural salesperson, it was hard for me to ASK customers for a referral. But asking for their help has led to deeper relationships with many customers that I never would have had before. It turns out many people welcome the discussion, and are very willing to help. They feel more vested in what we do and want us to succeed!
  4. Increased referrals. All of this has already increased sales for us in a significant way. I can see how continuing to improve and refine this process will lead to even more sales and help our customers get more value from our products and training.

Our mission now is to continue improving this process by creating an ever more compelling customer experience, from pre-sales through support, and making it easier for our customers to refer us to their family and friends.

Whenever we have to make a decision on where to spend our marketing dollars, this takes precedence. Referrals are now the primary marketing vehicle for us, and best way to grow our business.

What about you – do you have a system for asking your customers for referrals? If so, what has worked for you? If not, what are you waiting for?

Don CampbellDon Campbell lives with his family in San Jose California and is President of Expand2Web. His company provides tools and training to help businesses succeed online.

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  • James

    Hi Don, great article. Do you offer a monetary incentive for your clients to refer others, like a discount or even a cash bonus?

    • doncampbell

      Hi James, good question. I don’t think offering a monetary incentive would be ideal in this case. We are trying to create a customer experience where people are happy and intrinsically motivated to tell their family or friends about it, and then follow up with them. I think to offer a monetary incentive might work against that (in this case anyway).

      There are other times where offering a monetary incentive might work better, such as in the case of affiliate programs. But I view that as more of a sales effort than a referral effort.

      • ducttape

        I agree Don, as you might recall from the book – the best referrals are socially motivated and not financially motivated.

  • Tracey Fisher

    Great points. I need to find away to implement these points into my
    direct selling business. Because my website is formatted by the brand, I
    will have to find ways to work around it. Time to put my thinking cap
    on! :) Thanks so much for the incite and the tips.

    • doncampbell

      Traymar, how do you mean your website is formatted by the brand?

      • Tracey Fisher

        My website is built by the brand. I can only edit but so much and as I am not as tech savvy as some others, I will have to think of other ways to implement your tips and ideas.

  • Julie Larson

    Thanks for sharing, Don! My husband is reading The Referral Engine and it’s already working for him in his insurance business. I love the whole idea of prepping the customer ahead of time so that when you ask for the referral, it’s expected and not at all awkward.

    • doncampbell

      I know – that was a little hard for me to get used to, but I think it works very well and people respect it if done with a touch of class.

    • ducttape

      I think the key is to truly understand and believe in the value you plan to deliver. When you do that you say it with such confidence that it actually becomes a conversion tactic as much as a referral tactic.

  • Vinny O’Hare

    Great points Don! I have been designing special landing pages for my email subscribers with a sort of Welcome kit but it could be improved. Thanks for making me work :)

    • doncampbell

      My pleasure Vinny 😉

    • ducttape

      It’s funny what a difference a little more information and orientation can make after people have made a decision to do something.

  • Michelle Grigsby

    Good Article, Don. I love your attitude of over delivering with great service. Having a marketing background, I believe a lot of success is based on “posture”, as well. Some people are afraid as appearing as almost desperate/begging for referrals…and most people can sniff that out. But those that are confident…almost proud…of what they have to offer is always the winner…..and you have a lot to be proud of!

    • ducttape

      Love that word Michelle – posture or belief or confidence – it all comes down to knowing what you do/offer is valuable.

  • Ryan Hanley


    I have to reread The Referral Engine. There is so much great material. I love the idea of a customer welcome kit.

    It’s WOW to customers and like you said it can set the tone for referrals.



  • Phanio

    Great points. It is not about referring the business but about referring the service – give a person good service and they MAY telll one other person, give a person bad service and they WILL tell ten people. Which referral do you want?

  • Dave Crenshaw

    Brilliant. Thanks for sharing this, Don!

  • Jen Cochrane

    It used to be that a satisfied person might have told one or two people, and the dissatisfied person would tell ten, but nowadays, a customer has the potential to influence thousands- if not millions- of opinions by utilizing sites like Yelp, Kudzu, etc. So, especially for brick-and-mortar stores, keeping the service level high and delivering something remarkable is extremely important. A few bad online reviews can really hurt your business more than the few bad face-to-face comments from before.