Would you like an army of unpaid workers to help you build brand awareness? Would you like to do away with outbound marketing and traveling salesmen? Well, according to John Jantsch, a marketing and digital technology coach and the author of The Referral Engine: Teaching Your Business to Market Itself, motivating customers to voluntarily participate in your marketing campaigns is all about strategy. His advice for those who want to build a highly referable business? Dispense with conventional wisdom and rethink your current marketing strategy. CRM Editorial Assistant Juan Martinez spoke with Jantsch about generating—and benefiting from—referrals.
CRM magazine: Your book seems to embrace a new vision of marketing. What elements of yesterday’s marketing are dead and buried?
John Jantsch: I suppose there are a few tactics that may be dead, but what’s really dead is the approach of broadcasting and hunting for leads. Lead generation has now become much more [about] being found, educating, and building trust. It’s more work than buying a list and blasting.
CRM: Why do people make and take referrals?
Jantsch: People make referrals for many reasons. Some like to help, others like to be seen as “go-to” people, and some realize the practical nature of building social capital for what it may mean in return. As far as taking referrals—it can mean great [return on investment], more educated and qualified leads, and leads that aren’t as price-driven.
CRM: What product characteristics typically incite positive referrals?
Jantsch: The best characteristic is something that surprises and practically forces someone to talk. This can be a great deal, an over-the-top guarantee, elegant packaging, or even a purchase process that exceeded their expectations.
CRM: How do you generate referrals beyond creating a good product?
Jantsch: Actually, a good product is usually an expectation. The thing that creates referrals is some sort of emotional connection. This can be to the people selling the product, the fun experience of purchasing the product, the attitude of the service personnel, or the response when the buyer had a problem. The experience is as important as the product.
CRM: What’s “the accidental referral”?
Jantsch: It’s a term I use for the referrals that happen for some firms even though they never seem to ask [for] or promote referrals. It’s a good sign if you’re receiving them, because it points to the fact that you’re already doing something that’s referable.
CRM: Other than word of mouth from friends, where do people get referrals? Which of these sources are most trustworthy?
Jantsch: Most businesses focus a great deal of attention on referrals from customers, and rightly so, but there’s a huge opportunity in developing a strategic partner network. A strategic partner is really any business that serves the same market as your business. Look at every business that serves your current customer base with an eye on developing a relationship of referrals.
CRM: What traditional types of outbound marketing still work?
Jantsch: Most, in fact, still work—if used wisely. The best use of broadcast advertising is to create awareness about online and offline content opportunities such as e-books, blog content, and seminars. Email is still the most responsive form of online marketing—again, if done with careful personalization and segmentation.
CRM: How has referral shortened the sales cycle?
Jantsch: That’s a tricky one. In some cases it dramatically shortens the cycle because someone who has a need reaches out to a friend who tells them your business has the solution. This can cause them to show up at your business with their credit card in hand. In other cases, someone has referred a customer even before the customer has accepted that they have a need. For instance, an accountant may refer a client to a marketing consultant because it’s clear the client needs help, but the client may not realize it, and may actually need more education.
CRM: And marketing 10 years from now?
Jantsch: Advances in technology are only going to continue to drive change. Information will get more personal and less browser-based. The mobile device powered by applications will be one of the most powerful ways that marketers can interact with customers and prospects.
The 4 Cs of Marketing
In The Referral Engine, John Jantsch lays out a core quartet.
- Content: Prospects expect lots of educational content and may not trust an organization that’s not committed to creating a rich Web presence.
- Context: With so much information out there, marketers need to get very good at filtering, aggregating, and personalizing content.
- Connection: Social technology has changed how individuals see companies, and marketers must meet the heightened expectations of an open and personalized organization.
- Community: Social technology has made it much easier to create communities around shared ideas, so businesses must develop ways to create community both online and offline, with customers and staff.