One of the greatest lead generation tactics around is the trusted referral. I mean, I know you know that, but what are you actually doing to take advantage of it?

What are you doing to make certain that every single day dozens of unpaid sales calls are being made on your behalf?

Sound intriguing? Co-marketing, or getting others to actively market your business, isn’t a new concept, but surprisingly few do it actively.

The basic idea behind it is to form a small network of “best of class” providers who can act as an additional arm of marketing for each other.

I’ve seen this done with remarkable results – sometimes tripling and quintupling the number of leads an organization creates –  particularly for businesses that operate on a the local level.

Here’s how to set it up

Approach a number of your customers and ask them to share names of other companies they love to do business with. You may already know some of them or have an idea who you would like to partner with, but I find that if you can dig up few shared connections, your mutual customer, it makes the idea take off even faster.

From this group pick four or five at the most and propose meeting to discuss cross promoting each others business.

The key is to find a logical way to make it easy for each others sales people or technicians to co-market in a way that makes sense to the customer. I find that in some cases the best approach is to simply ask a customer when you are doing business with them if they have any other needs that might be served by one of your trusted partners.

In many cases they’ll be thankful that you could refer someone and even more thankful when you’re able to give them a coupon or gift certificate to use with that supplier.

While you’ll want everyone to pull their weight, don’t keep tight score, don’t pay referral fees, add some incentives such as coupons and discounts and create a packet of information that makes it easy for each participating business to leave promotional materials for all the partners behind.

Think about the power of this approach. If today you’re able to make 20 sales calls in a day, tomorrow you and your partners might make 100 a day. Think that could add some impact to your sales?

Here are some examples to help illustrate

Graphic designer

Customers of a graphic designer are probably going to need things like printing, web design, promotional items and copywriting for starters.

A graphic designer could offer every customer that needs identity work 500 free business cards, a free website audit, one free sales letter and 100 free pens with the new logo on them as part of a new customer package.

This not only creates exposure for the partners it really sweetens the deal for the graphic designer.

Insurance sales

I’ve added this one because insurance sales folks get a bad wrap – well, not entirely, but think about it, they are selling something we hope we never use.

The ones that succeed understand this and know that their real job is to bring value in as many ways as possible. If an insurance salesperson can develop trusted relationships with people that really bring accounting, planning, marketing and legal expertise to small business owners, they’ll dramatically up their value. By becoming a bit of an expert in all of these areas as they relate to small business then the ofttimes lowly insurance person can develop their own reputation as someone that gets small business, not someone selling something we don’t want to need.

Plumbing contractor

Any business that goes into the home to do repair will always find homeowners receptive to referrals of other trusted providers. The plumber should have a co marketing relationship with HVAC, window cleaning, electrical, carpet, garage door, fencing, landscaping and roofing suppliers at a minimum and leave behind that “little black book” of trusted suppliers with every technician call.

Wedding photographer

Weddings are an ecosystem of sorts. They are perfect for co marketing because there’s a very known and logical progression of stuff that comes along with a wedding. Pretty much every wedding photographer knows that their customers will need a florist, baker, invite designer, caterer, event facility, tailor and gown shop.

Now, you won’t always fit in the right order of things in every situation, but once you’ve earned the trust of the couple and associated parents then you’ll be doing them a huge favor if you can recommend some other options.

Co-marketing is a powerful referral generation tool and something that can be employed with very little cost and result in even deeper customer relationships.

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John Jantsch

John Jantsch is a marketing consultant, speaker and author of Duct Tape Marketing, Duct Tape Selling, The Commitment Engine and The Referral Engine and the founder of the Duct Tape Marketing Consultant Network.
  • Love that you didn’t just give the “Idea” but gave folks specific examples so that folks can grasp concretely how this would work in their business.

    I’ve found a simple phrase can help business owners who want to use this strategy open doors with the other businesses that they may not already know personally.

    “Hi ______, We share a client/Customer and I wanted to see if there is a way I can introduce you to more of my customers….”

    • Thanks for sharing your specific tip Robert.

  • Yeah… love the ideas… well said. Very much helpful to small businesses. Well done sir.

  • Can you please provide with realisting, valuable tips that any business owner can benefit from reading your post. Thank you for your efforts.

    • Not sure how I could can more of that than I already have?

  • I see this as a Referral Club in action. Many small businesses are in referral clubs such as BNI, but the members often don’t take the extra step of forming power partnerships with similar businesses to follow a strategy like what you’ve laid out above. If done right it can’t help but work some of the time.

    I like to maintain a mindset when meeting others that goes like this: WIIFMN, which stands for What’s In It For My Network? When thinking this way I often can get more referrals for businesses I feel strongly about.

    • Love that Michael – it’s like building your own club too.

  • Dave Crenshaw

    Thanks for sharing, John. This is very helpful.

  • Great article! I started a business partnership with some like-minded people a few months ago and it surely helps! We cross-promote our posts and we get more leads for each of our businesses.

    • Would love to hear any other tactics you are employing

  • Thanks! Free marketing indeed. There’s a lot of truth to what you said, and the thing is that it doesn’t take much effort. I call it sowing seeds.

  • Tim Coe

    Interesting to read you do not suggest paying referral fees. In any cross selling relationship one side is always going to feel they have the worse end of the stick due to receiving less than they are giving. Referral fees, although not always appropriate or comfortable for JV relationships, means one is being paid properly for his connections.

    • David DeVelder

      Tim, paying referral fees is fine if that is the business you are in. The approach here is building on the fact that we are wired to help each other and if you have been providing great customer experience, look for leads for you clients and generally are building a community, then financial rewards can be counter productive.

      • Tim Coe

        Thanks for the reply David. Yes, agreed, every business model varies. It worked for me in the tax industry as I was obtaining referrals from mortgage brokers who expected financial compensation. Receiving money for referring a friend can be construed as a little ‘dirty’.