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Should You Pay for Referrals?

Friday is “Question of the Week” day here at Duct Tape Marketing. Each Friday I’ll tackle a specific question I received via readers or in places where I’m speaking. Submit your question here and if we use it we’ll highlight you and send you a signed copy of Duct Tape Marketing.

referral gift

photo credit: Chris JL via photopin cc

This week I received what amounts to a two-part question about ways to motivate, incentivize and reward someone for sending your a referral.

Here’s the question: Should I reward my referrals sources with some sort of monetary incentive and if so should it only be for referrals that turn into customers?

So, here’s my two-part answer: I believe that the best referrals are made for social reasons and not financial reasons. Certainly if you’re selling a $19 item someone might tell their friends in order to get $5 referral fee, but beyond that, money changes the dynamic in a way that isn’t the healthiest.

I’ve always contended that the best reward for a referral is enormous appreciation. The way you pull that off is two-fold. First shower the person referred to you with a special experience. Then make your referral sources feel special by creating opportunities for them – build a referral club, give them surprises, give them access, give them community.

Now, for the second part of the question – a referral that doesn’t turn into a customer right away is still valuable. I’ve always advised people to come up with some way to show appreciation or reward for the referrals that don’t pan out. Send them a gift card, flowers, movie tickets or chocolate. As long as you keep that referral source motivated the next one and the next one will turn into your next great customer.

6 Ways to Uncover Highly Targeted Referral Prospects

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

PresentationOne of the most important elements of getting more highly targeted referrals is to make it EASY for others to open the right doors by being crystal clear about what you want.

Stop saying “if you can think of anyone else who might benefit from my services, please have them give me a call”  because it hardly ever works and, if it does, the referrals will likely be unfocused at best.

Since no strategy can work every time, here are six ways to excel in uncovering the best referral prospects:

  1. Pre-planning

Before you meet, do some homework on who your client is connected to:

Google them, search LinkedIn contacts and think through what other people, groups or interests they have already mentioned in their life.

Before every meeting, ask yourself: what would I love to ask this person for? This is the one of the best referral habits you can have.

  1. Listen differently

Make it a goal in every meeting to identify 1-3 names of people who fit your ideal target prospect.

When you do, you will find that you pay more attention to conversation that in the past may have seemed frivolous or unrelated to your agenda for the meeting.

You already know that there are times when you don’t listen closely to everything someone says. When you make a point to listen closely for names, you’ll start to notice that sometimes they do mention specific people.

  1. Ask different questions

If you don’t know yet what people are in their personal and professional world, ask different questions! Remember the goal is to identify specific people or opportunities for you.

“What do you love to do?”

“What are you working on right now?”

Let them tell you. If something comes up that you believe you could help with: “How do you think it would be best for me to help you with this situation?”

“Who’s your ideal client?” This ought to then give you a chance to respond too.

“If you were me and building a business in this area, who would be the important people for me to know?”

Ask your clients:

“I’m curious: What do you tell other people about the work we do?”

  1. Use generic specifics

If have yet to identify anyone: instead of 30 family members say ‘siblings’ or ‘parents’; ‘best friend’ beats ‘friends’; and ‘favorite colleague at work’ beats potentially dozens of anonymous ‘co-workers’; “who do you most like to (e.g.) golf with that you discuss this kind of thing of with?”

For business owners ask about favorite clients, favorite vendors that they outsource to, and referral sources.

  1. Memory jogging stories

Educate people about the different types of work you do by sharing stories so they know all that you’re capable of. During general conversation, start weaving in more stories of how you have helped other people in different situations. The goal is to hear: “I didn’t know you did that. You know, you might want to talk to…” Look for flickers of recognition.

You could even legitimately ask: “Do you ever run into people in that situation?”

  1. Ideal client list

A few people have success presenting a list of prospects to others in their network. If you’ve got water in the well with someone, it is perfectly appropriate to say: “I’m curious to ask you about a list of area businesses that I put together the other day. (Show list) Do you have any decent contacts at any of these places? I’d love to talk to them about their (fill in the blank) because I’ve worked with a lot of similar organizations and they’ve turned into excellent relationships.”

Create an ideal client list of specific names, companies, locations or professions and life situations.

The results come when you make it very easy for others such that they do not have to think about it. So be very clear about what you want by knowing whom you want to meet.

Matt AndersonMatt Anderson, founder of The Referral Authority, is the author of Fearless Referrals. He leads seminars and coaching groups around the globe for business development professionals on how to develop the lifetime skill of getting referrals. Contact him at [email protected] or 312-622-3121.

Videos and Secrets Draw More Referrals

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

video referrals

photo credit: fensterbme via photopin cc

We are in a funny spot at my company, BlogMutt. We are a business blogging service for people that know how important it is to blog (all the smart ones), but who don’t have the time to write their own posts (nearly all).

I think there is no dishonor in hiring a blog writing service, just as there is no dishonor in hiring an accountant to do taxes, but on the other hand, I can see why people think a blog should be something they created themselves. For those people, we are happy to serve as ghost writers.

Because of that, however, our customers don’t necessarily want to say out loud on the Internet that they have hired a blog writing service, which can make generating referrals a bit of a challenge.

Any business that provides a product or service that people don’t necessarily feel like talking about suffers from this same challenge.

We’ve develop two powerful ways to overcome this particular challenge and develop a steady stream of referrals.

Video Referrals Work

When I visit a customer in person, I pull out my handy phone, that just happens to have an HD videocamera built in, and ask them to share what they think of our service. They don’t even have to give their name, so they are happy to say nice things. And they say very nice things. Their comments are really humbling in fact.

We add these videos to our site and let our current customers hook our potential customers.

I’m not the only one who’s figured this out. Zappos ran the numbers and reported that sales of products with videos attached jumped as much as 30 percent compared to products with no videos. If you’ve read The Referral Engine you know that prospective customers trust other customers more than they trust you.

Don’t have time to launch a whole video page? We use a tool called BuboBox; a couple lines of code and it’s done. If you don’t use this tool, use YouTube or use your brother-in-law with a BetaMax, but do get some video referrals on your site.

Dirty Little Secret of Referral Marketing: Shhhhh.

As I mentioned, not all customers of our blog writing service like to blab from the rooftops that they use our service. That’s fine, I get it.

And yet, when I look down the rolls of our hundreds of paying customers, I see that a huge percentage of them came from referrals. How can that be if there’s no trail of tweets? No flood of Facebook posts? No interest from Pinterest?

My hunch is that it’s related to fact that people like to keep secrets, but they LOVE to share secrets.

Every blog writer who’s been around knows that saying something is a “secret” in a blog post headline is a surefire way to get people to click. I, personally, would never in a million years stoop to such a gimmick.

I mean, unless it really was a secret… Or…

Ahem.

What were we talking about? Oh, yes. Secrets.

You see, I think the reason our customers love us is that it’s like a secret weapon. While they won’t post Tweets about us, if someone asks them what their secret to blogging every week is when they are so busy operating their small business, they first look around to see if anyone is listening and then they say in whispered tones that they don’t write their own blog posts, they use BlogMutt.

And those referrals take that to heart, perhaps even more seriously than if someone had said it out loud. We have a funny tendency to listen more when we think we are getting some insider information.

One way of describing that voice is sotto voce, which is Italian for a soft voice and is known by musicians and orators everywhere to be one of the most effective ways of getting the listener to lean in to hear what you have to say.

So, my secret tip about referral marketing isn’t a secret at all. The secret IS the tip: Harness the power of the secret. In the right situations ask your customers to keep their referral of you kind of hush-hush.

Tell them that you’ll give them a discount code for their friends, but tell them that they are specifically forbidden from tweeting it, or putting it on their own blog. Tell them that they can only spread it to friends, and maybe hint that those friends should be told that it is only for them. That may be just the thing needed to get the referrals they make to actually convert into paying customers.

If anyone asks, you didn’t hear it from me.

Scott C. Yates is Co-Founder of BlogMutt, his third startup. He built MyTrafficNews before it sold to Traffic.com, and started one other that is still operating today. Before starting his start-up life he was a writer and futurist. (He gets to say that because he actually wrote a book with “future” in the title.) Don’t tell anyone, but he also has lots more secrets. You can learn about them on the BlogMutt blog. (See what he did there?)

The Well Lit Path

lit pathThe other day I was conducting an educational workshop for folks interested in becoming Duct Tape Marketing Coaches. At one point I talked about presenting workshops as the primary way that coaches acquired customers and that it was an essential success factor for prospective coaches to consider.

One of the attendees then asked that, “if speaking for leads was the tactic that worked, why bother doing anything else?” And this, I fear, is at the heart of what trips some small business marketers up.

Lead generation, nurturing and conversion is a game of trust and momentum building and no matter the actual environment in which a customer is acquired, the path taken to getting them is usually lit with many other marketing related lights. In my example above, while it’s true customers often make the decision to hire a Duct Tape coach when they attend a marketing workshop, the decision process started perhaps, because the prospect had heard of Duct Tape Marketing, read about the workshop in the local paper, had a friend invite them to the workshop, and read testimonials and success stories on the coach’s web site. So, in effect, the workshop was merely confirmation that this individual might be someone that could help.

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What Really Triggers a Referral?

referral conversationReferrals most naturally happen when two people are talking and one of the parties expresses a pain in the neck. If the other party just had her pain in the neck fixed, she may very well say something like, “ooh, you just gotta call Bob, he’s the best pain in the neck fixer on the planet.“

Right? We’ve all done some variation of that exchange in making or receiving a referral.

Problem is, we don’t spend enough time teaching our customers and referral sources the types of complaints, frustrations, challenges, and situations our customers generally espouse when they are actually in the act of qualifying themselves as a great referral.

Here’s what I mean. We ask our customers and referral sources if they know anyone who needs a fully optimized, solutions driven lawn manicure specialist, when we should probably be asking them if they know anyone whose dog keeps getting loose because their lawn service always leaves the gate open.

I believe any salesperson worth their salt has developed a list of phrases, situations, and verbal clues that, if heard during a sales presentation, signal it’s time to take the order.

The same idea is true of a qualified referral.

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