Module 1: What is Referral Marketing?

In a nutshell, referral marketing is the process of developing a reliable network of well-established clients who are actively engaging their colleagues, co-workers, and friends about the products or services that you have to offer.

Why is Referral Marketing So Effective?

In the modern marketplace, people are distrustful of traditional advertising because they are keenly aware that a business will do whatever it takes to attract new clients. When they hear about something that they can use from someone they trust, on the other hand, they will extend that credibility to that product or service.

Once you have established a solid foundation of satisfied clients that have been educated how to promote your brand, you will have a steady stream of qualified referrals coming in for potential clients who are genuinely interested in doing business with you.

Two Major Components of Referral Marketing to Understand

Effective referral marketing begins with two basic components, providing a product or service that people actually like and managing the expectation for referrals. While most businesspeople have an intuitive understanding of the importance of providing a top-notch product, all too many professionals drop the ball when it comes to actively engaging their clients on the topic of referrals.

If you are genuinely interested in increasing both the quantity and the quality of the sales leads that come into your business, then the time is now to learn how to start building a referral engine of your own by using a network of existing clients who already know how great you really are.

Have You Been Hesitant to Ask for Referrals?

If you are resistant to the idea of asking your clients to provide you with referrals out of a question of good taste, it is time to reexamine your thinking about the process of referral development. When clients refer one of their colleagues or associates to what you have to offer, they are doing so because they truly believe that your product or service can help someone else reach a particular goal.

Why People Love to Give Referrals

You can probably remember a time in the recent past that you recommended a product or service that you absolutely loved. Felt pretty good, right? That’s because it’s the right thing to do. You found a solution that made a really positive impact on your life or business, and it probably will for your people if they follow your advice and check it out. You’re also helping the people who are behind what you are recommending – they’re doing something that makes a positive impact and 100% deserve to grow their business.

Plus, it doesn’t hurt that you get to feel knowledgeable and “in the know” by showing off this great thing you discovered. There’s definitely a nice little ego boost involved in there too.

People enjoy talking about businesses that they have discovered that have provided them with solutions, improved their lives or saved them a great deal out of money. As a result, you are actually doing your clients a favor when you encourage them to spread the word on a product or service that you know that they love.

Opinions can be the most persuasive marketing tool

In the midst of all the hurry to print new brochures and flyers and conceptualize advertising campaigns, you may often fail to notice something right in front of you – your existing client base.

So, to get your present clients to refer you, it is crucial that you provide them with an excellent service. Its only when they are convinced of the quality of your service that they will refer you to their families and friends. After all, when they do so, their reputation is at stake, too. Once they are pleased with your system, the referrals will happen automatically without you having to ask for it.

Plus, it doesn’t hurt that you get to feel knowledgeable and “in the know” by showing off this great thing you discovered. There’s definitely a nice little ego boost involved in there too.

People enjoy talking about businesses that they have discovered that have provided them with solutions, improved their lives or saved them a great deal out of money. As a result, you are actually doing your clients a favor when you encourage them to spread the word on a product or service that you know that they love.

Visibility is the Key

If you’ve established yourself as a respectable service provider, chances are you’re already attracting quite a few referrals. If not, perhaps you ought to look at improving your visibility.

It’s not that your clients don’t want to refer you; it’s just that it may not strike them. So, prompt them to do so. Put up a notice at your office saying referrals are welcome; this simple step could do the trick. It gets people thinking of actively telling their friends and colleagues about you.

Getting Started - Action Steps for Your Next Coffee Break

We will be diving into developing your referral formula in the next module. One great way to prepare while integrated what we've covered here is to consider just how many referral sources you probably have in your own network

  • Take a few minutes to jot down five to ten people in your network who would be likely to refer your business under the right circumstances.
  • Next, ask yourself whether these individuals know whether you are actively looking for new clients and would welcome their referrals. Mark a simple yes or no answer to this question for each of these contacts.
  • Lastly, consider how well each of these people could explain to someone what it is you do? Again, mark a simple yes or no answer to this question for each of these contacts. 
  • Review your list. If you are like most of us, chances are that you've got some great sources of referrals out there who simply don't know that you'd welcome them or even how to explain what it is you do. 

Ready for a deeper dive? Explore the resource below!

When you are ready to really dig into this stuff, remember that there’s a real mix of marketing advice out there. Some of it’s awesome, some of it’s half-baked, lots of it is outdated, and a whole lot of it is designed to help sell products, not professionals services.

We’ve filtered through the best of what is available to provide you with actionable advice in our Deep Dive recommendations that are from the most trusted resources and are designed specifically to promote professional practices like yours.

Deeper Dive Recommendation: Why referral marketing is awesome infographic from Referral Candy

While content marketing and social media marketing are discussed and debated regularly, referral marketing is often neglected.

Referral Candy put together an infographic to remedy that. It’s worth checking out for a deeper dive into what this is all about.

Learn about what referral marketing is, how it works, why it’s so effective, and why we think you ought to seriously consider incorporating it into your own marketing efforts.

We’ve filtered through the best of what is available to provide you with actionable advice in our Deep Dive recommendations that are from the most trusted resources and are designed specifically to promote professional practices like yours.

Check out the infographic and accompanying article now.

Todd McCall

Instructor

I help practices who are marketing professional services get the attention they deserve by developing an online presence that converts visitors into clients.

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