Referrals Drive Small Business Success: The 6 Realities of Referrals

John Jantsch, the small business marketing guru and best-selling author of Duct Tape Marketing, was right when he said that “a thrilled customer is the most potent marketing asset your organization can leverage.” Unfortunately, too many small business owners fail to capitalize on the experiences of their raving fans. In his book The Referral Engine, Jantsch talks about the importance of leveraging the voices of thrilled customers and getting them to work for you as a way to drive referrals. I’d like to highlight a few of the realities outlined in that book.

Reality 1: People Make Referrals for Simple Reasons

Imagine you’ve just discovered a product that changed your life—it saved you time and money and solved a major problem you were having. Wouldn’t you be excited about the product and want to share it with friends and family who might also benefit from it? The answer is yes, and there are many reasons for this. For one, people instinctively want to be helpful, so when somebody you know is facing a challenge, you offer assistance in the form of a referral, which is a type of social currency. Moreover, this type of sharing also helps people connect with each other, and these connections are necessary for our survival.

Reality 2: All Business Involves Risk

Going into business is risky, well... business. But there are ways you can mitigate risk. One of the most effective ways is building a brand and creating products that customers can connect with in two ways: the head and the heart.

On the head side, you have logic and the need for a great product that actually solves problems. On the heart side, the product or brand also needs to make an emotional impact on consumers. If you create a memorable experience for customers and give them a solid product that also meets a need, then you'll increase customer satisfaction and referral rates while also reducing risk.

Reality 3: Nobody Talks About Boring Businesses

Here's another harsh but simple reality: customers aren't going to refer your business if they don’t remember you. And what's a great way to be memorable? Be unique. Be something they haven't seen before. Be something new for them to talk about.

Embodying these things can be tough because you can't just replicate another business's successful strategy here—that wouldn't be different and interesting. Instead, you need to find what is special about your business or what could be special about your brand and run with it.

Reality 4: Consistency Builds Trust

Just like you need to appeal to both the head and the heart in order to win over customers, you must also focus on building trust while you create memorable experiences. In other words, people need to know that what makes you unique isn't just a gimmick and that there's actual substance to your brand they can rely on. This foundation of trust is built on consistency, repetition, and authenticity, and if you can successfully build this into your bedrock, then you'll have all the tools you need to drive referrals.

Reality 5: Marketing Is a System

Driving consistent referrals requires a system and a repeatable process. Just as small business marketing is something that requires a strategy, so does driving referrals. In fact, if you get the right methodology in place, you won't ever again have to ask for a referral because your strategy will encourage voluntary discussions about your products and your brand.

Reality 6: Small Business Owners Don’t Take Advantage of Referrals

This is the harshest and most tragic of all the referral realities: small business owners realize how important referrals are, but they aren't capitalizing on them. A large portion of business activity comes from referrals, but chances are more opportunities are being lost than are being taken advantage of, and growing your business is as easy as realizing the power of referrals and getting a strategy in place to drive them.

Referrals are the lifeblood of modern business, and without satisfied customers who want to share stories about your products and your brand, you won’t be able to achieve the type of success and growth that every small business wants to see. Referrals and sharing are easier than ever before thanks to social media, but it’s still necessary to have a comprehensive marketing strategy in place to drive small business sales and referrals.

Interested in creating a small business system that includes a referral strategy? We'd love to help. Contact Lift Communications to get started.