The graphics above represent the two dominate marketing business models that I am starting to see more and more of these days (click on each to get a better view)

The one on the left I like to call the Highly Networked Business – In this model the business takes full advantage of the use of multi-media, education based content as a driving marketing strategy, taps online automation and search for leads, and utilizes the full suite of social networking and bookmarking tools to create the greatest web presence possible. This is certainly a newer model and one that has been fostered by the tremendous growth of the Internet. This is a powerful business building strategy for Internet based services as well as offline, brick and mortar local businesses.

The graphic on the right represents another kind of business, something I call the Highly Engaged Business. The Highly Engaged Business represents the use of some of the more traditional business building skill sets such as relationship building, strategic partnering, viewing staff as customers, and generally engaging prospects and customers alike in ways that foster deeper connection, context, and community.

A lot of successful businesses are very good at one of these models or that other. In fact, every business should adopt the tools, tactics and habits of one of these models or the other in order to succeed in today’s business environment. However, as I’ve been interviewing dozens of successful companies as part of the research for my new book on referrals, I’ve discovered that companies that generate a significant portion of their business by way of referral have something in common with regard to these two models.

Companies that generate lots of referrals tap the convergence of the Highly Networked Business and the Highly Engaged Business to create something I’ve begun to call the Highly Preferred Business.

The Highly Preferred Business uses every advance in technology combined with what one of my referral success stories calls hugs and handshakes to build trust, generate inbound leads, create fulfilling customer experiences, increase customer loyalty, shorten sales cycles, charge premium pricing, create a culture of buzz, and grow to expect referrals from every single customer relationship. These businesses have developed habits the make them both preferred and referred.

I believe these habits of preferral can be learned, instilled and installed in any business, online or off.

I would love to hear your take on the theory of preferral.

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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.
  • I think your post is quite interesting,John.

    I think it is interesting that as more independent and small businesses grow, we realize that we cannot do it all ourselves. So we look at developing influencers, alliances, networks and engaged networks around us.

    I do think your post is a future model of many businesses.

    Great take on it!

  • Great article John, I wanted to leave a comment after reading it so its improving my networking skills already.

  • Excellent thoughts! I’m passing your article along to the members of my online business community this morning — it will give them some great food for thought as they manuever through the turbulent economy of 2009!

  • Fascinating! I’ve printed both graphics to put on my wall for a few days and ponder. Right now we are in the middle of going from being an established, highly “engaged” business, to ramping up our online presence to become a more highly “networked” business.

    I think navigating this transition would be very hard for a lot of companies. We’re lucky in that we’ve always played fast and loose, so transition is relatively easy for us.

    Anyway, what a read and thanks for posting. Eye-opening!

  • Interesting. What would you call a business who uses a 3rd party company to generate those referrals. For example we help people find business consultants online. We consider ourselves that highly networked business which is what the consultants want.

  • Thanks for some interesting information. I am doing both at this time but not as well as I could.

  • I enjoyed this article a lot. The technology field I believe is making things “easily” harder. Harder to know what you should be part of, easier to find the software to do it. It is a great thought to think that people still want the HUG and Handshake concept at the same time they don’t have the time to adapt to that.

    We may be running at a faster pace then what we trained for.

  • The difference between your two models, I think, is working smarter instead of harder.

  • John Jantsch

    @Mark – you know I probably didn’t state strongly enough that a business must be good at one of these before they can simply jump into the convergence.

  • John Jantsch

    @Jillian – I don’t know that I would agree – they are both hard and both smart – the point is that getting good and both and blending them is what the most preferred business do really well – whether they know they are doing it or not.

  • John Jantsch

    @Jared, I don’t know I think you still have both of those parts but it’s a matter of a somewhat unique distribution channel is all.

  • Thanks for the post! Reminds us it all comes down to people–networking and engaging w them…love the term “highly preferred business” and look forward to learning how to become that more & more and teach others the same!

  • Great visual to remind everyone the importance of both to create the best in networking and referrals. It is also a target to look at to see what areas we’re missing. I’m going to pass this on to my blog readers.

  • The theory is a godsend for service professionals, especially solopreneurs, who want to extend their reach.

    Normally, I would agree John that one must master one task before taking on another, but in this case, it’s possibly, and maybe better to use both strategies simultaneously. I can envision a highly networked company having a difficult time integrating the highly engaged strategies (and vice versa). I’m eager to hear what others think.

  • Thats the spirit. High Preferred traits can be instilled into any business. It takes the willingness to adapt that is tricky

  • Walt Goshert

    “Hugs and handshakes”, both online and offline, are the Ying and Yang of Highly Preferred businesses.

    I use “Ying and Yang” because while we’re engaged in building and fostering client relationships, whether it’s online or offline, they seem to require different skill sets, even almost different mindsets.

    John, great job in applying terms to these marketing concepts.

  • This is some great insight. As a small business owner, I have realized the highly networked business model works best for me.

    I received some extremely helpful consultation from Sam Horn (author of POP!) the other day. She helped me understand how to make my business stand out, and I must say, her methods are working and its only been about a week.

    She is holding a tele-seminar April 16, on how to make your business POP! so it makes more money. I am definitely attending this because it’s only $9.

    Follow this link and read the 2nd paragraph to find out about this tele-seminar.

    Listen to John and Sam, and you will succeed. These people really know what they’re talking about!

  • I like the ‘theory of preferral’ – it makes a lot of sense, particularly when you look at how quickly some businesses are evolving.