Notes from John Jantsch Presentation to Dallas Social Media Club on “The Referral Engine”

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by Jerod Morris (@jerodmsf)

It is on nights like last night when I am most glad that Mavis Beacon taught me typing.

I had the pleasure of going to the monthly meeting of the Social Media Club of Dallas last evening where the guest presenter was John Jantsch, one of the most influential marketing thought and theory leaders for small- and medium-sized businesses. It just so happens that the majority of our clients are small- and medium-sized businesses, so I knew immediately that this would be a most beneficial use of a Thursday evening.

Because I wanted to be able to share what I learned with you (and so that I wouldn’t be distracted by the baseball scores on my iPhone) I decided to put my super-warp-speed-barely-look-down-at-the-keyboard typing skills (thanks Mavis!) to good use. The fruits of my note-taking labor are below, cleaned up a bit from their original form so that they make some semblance of sense.

If you have any questions about the notes or want an idea expatiated further, feel free to leave a comment, email me (jerod [at] orangecaster [dot] com), or go to John’s Duct Tape Marketing blog.

You will also want to be on the lookout for John’s new book, The Referral Engine: Teaching Your Business to Market Itself [affiliate link to Amazon], which I got an advanced copy of and which John was nice enough to sign.

First, here are the slides John used. Then, my notes are below.

Update: You can also read my other post from this morning, over at How-to-Blog.tv – “4 Lessons for Bloggers From John Jantsch’s Referral Engine Presentation“

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Opening Remarks

Did a survey of small business owners:

• Over 70% of small business said 50% or more of their business comes from referrals
• He asked, what do you do to increase it, make it 100%? What do you do to tap that power intentionally? Got blank stares. Majority said they did nothing to generate referrals.
• Only one secret to generating referrals and if you don’t have it, nothing else matters: you must be, quite simply, more referable.

Realties of referral

1. People make referrals because they “NEED” to

• It feels good
• It’s a way to build social capital
• It a way to build a network of folks who will refer business to them
• Business karma! It’s a survival tactic
• Brain is wired to give referrals
• Thus, if you want to get referrals, tap into peoples’ need to refer by providing the kind of value that other people feel like they need to share with friends

Definition of Marketing

• Came up with his own definition 10 years – each year it becomes more true
• Time to stop talking about social media like it’s a separate part of marketing.
• Social media: the use of technology to co-create know, like, and trust

4Ps v 4Cs

• How many have people pulled out Yellow Pages recently? NONE! HA!
• Product, place, price, promotion vs…4Cs, below

Content

• Publishing content online is the greatest tool to create awareness, build trust, – people search for you to check credibility. How can you trust a company that doesn’t have info out there?
• Same thing for referrals – have content out there for cross-checking
• Produce content opportunities for potential strategic partners

• Book: MegaTrends – said that with every advance in technology, there needed to be an advance in “human touch” – the more we’d crave human interaction – Nesbit writing about typewriters, but still true today.
• One of the greatest uses of new tools and platforms in social media is ability to have much deeper connections with people we’re ALREADY doing business with…they are not just tools to find leads.
• People are craving a deeper connection with people, products, services they do business with.

Community

• We’ve had concepts of community forever, but now there is a new definition of communities that we can build around shared ideas
• Opportunity from referral standpoint is much bigger as people get more comfortable participating in communities.
• Tip: Bring your customers together. Let them interact, share stories, ideas, etc.
• Remember: business owners are often ALONE. No one to talk to. Craving community. Want to share frustrations, challenges, etc. This is a tremendous opportunity for you to bring people together and then those people will become a great advocate for your business.

Digital interactivity is now at the center of marketing

• Digital collaboration the center of our businesses.
• Typical small business is struggling with idea that they are inherently social…or they’re going to go out of business. Not an either/or.
• Don’t get into social media but then chuck everything else! Fundamentals of marketing have not changed. Just have a new set of tools to leverage those fundamentals.
• We need to move business owners more rapidly into understanding that this isn’t a tactic, it’s an umbrella of how the world works.

The funnel is broken!

• The traditional idea of a marketing funnel, as applied to new media opportunities, is broken. Previous idea was just get a whole bunch of leads in top of funnel – and Twitter and Facebook opened tons of new leads to throw into funnel. – But this is not an ideal strategy.
• Better strategy is a “marketing hourglass” approach – lead generation and referral generation is not an activity of hunting – but one of finding and being found.
• When it comes to lead and referral generations, customer experience is the new black. – Create good customer experience, and you’ll never lead gen again.

7 Components of Marketing Hourglass

1. Know

• How are people introduced to you? (i.e. who and how, ads, referrals)

2. Like

• How can people begin to like you and show they like you? (i.e. web site, reception, newsletter)

3. Trust

• How do people learn more about you, your services, and your credibility? (i.e. web searches, expert content, sales presentations)

4. Try

• How do people get a trial run of what you do and what it’s like to do business with you? (i.e. webinar, evaultaiotn, nurturing)

5. Buy

• How are people converted from interest and impulse into a paying, excited customer? (i.e. service team, new customer kit, finance deliver

6. Repeat

• How do you keep customer and leverage to attract new ones? (i.e. post project survey, cross selling, quarterly events)

7. Refer

• How do you encourage and entice referrals? (i.e. results reviews, partners intros, P2P events)

Additional thoughts on Marketing Hourglass:

• Most businessed only do Know, Buy, and Refer – what happens with hourglass approach is the Like, Trust, Try part is where you educate, build relationships, and let customer sell themselves!
• Allow people to move along the path towards becoming ideal customer. – A lot of times WE don’t know what makes a good/bad customer
• Make them say: you are the only logical choice to do business with. In fact, I EXPECT to pay a premium
• Take the time to narrowly define who makes an ideal customer so you and they realize it. You will be able to charge a premium for your work.
• Cause someone to believe that you’re different.
• There will always be someone willing to go out of business faster than you – this is the problem with competing on price. Compete on something else: quality, service, timeliness, etc.
• The moment that someone comes to know you by ad or referral, have a process that will give them more information – this is the idea behind marketing hourglass – let them find reviews, ratings, chatter about you and what you do.
• Of first 3 pages of Google results for his name, 18-20 are listings that John controls and most are on sites that he owns or it is a platform he participates in.
• Do you have a way for people to sample you, to create an evaluation?
• When they buy your product or service – the lead conversion process – how do you handle it? “Small business owners love the chase.” BUT…once a lead has been converted, this is the biggest place where the 2nd sale and the 3rd sale come from, where referrals come from. Create an orientation kit. Communication what you will do, who you are, processes to follow up in same manner that marketing and selling process did.

The Referral Engine System:

This is all the stuff that comes after you’ve stimulated referrals using the steps above. Once you’ve stimulated,  now amp it!

1. Authentic strategy

• Consider strategy before tactics – big component
• Understand who makes ideal customer for your business – probably much narrower than you’re thinking today
• Locate the profitable customers
• Identify customers that are already referring business to you today
• Profitable and referring customers…discover common characteristics about them; that is your ideal customer. Get more!
• Complete this for yourself: If I had 10 more customers like ____, life would be great
• Have a talkable difference
• Of your ideal customers, what do they like about you? What do they talk about? What differentiates you? What ABOUT our service do you like? Give example?

2. Content that builds trust

• This is the content that’s “out there” – the stuff you put out there to create awareness, trust

3. Content that educates

• Whitepapers, how-tos, workshop – the stuff you create that your customers love
• Content that educates your referral sources – tell them “if you hear anyone say THESE things, give them our card or refer them here.”
• This content provides a sampling of your work and what you do and helps prevent you from getting the wrong leads

4. Customer community

• Who are the people who are motivated to refer?
• FIND the people who are motivated and equip them. Teach and motivate.
• Consider using a creative offer/incentive to refer – not always money!!! You want people to want your business to succeed, not just a financial incentive to help. For example, one business said “If you send us a referral, we’ll send you a carpenter for a day.” – give them something that would be even harder for them to get than $$$.

5. Partner community

• Find other businesses who have your same ideal target client in mind
• We make ourselves much more valuable to our customers if we can be seen as the go-to person for everything that they need, whether we provide it or not – become a virtual rolodex, you’ll have the solution! Refer someone to them.
• If you are referring businesses in your network, you will naturally receive referrals in return.
• Invite and recruit with the idea that you’ll create content opportunities, video/audio opportunities, create a killer blog that everyone contributes to (especially locally – huge SEO value), a killer workshop – present all of this to your customers and even for their customers
• Co-market
• The possibilities are unlimited if you get creative about this idea
• Be the one in control and taking a leadership role in building partner community and you’ll be seen as someone that people want to partner with.

6. Execution

• Have a process – how will we collect leads? How will we ask for referrals? Results review process? Did you get value?
• You could probably raise your prices if you teach people the value that you are delivering – have a process in place to do it.

7. Follow-up

• A referred lead is a special lead – not to be thrown into “same” process
• Treat a referral as something different – make them understand that they are unique
• Follow up with referral sources as well – greatest motivator for referrers is appreciation!

Questions/Answers

1. Are handwritten notes more important today?

• Yes!
• Hand-written notes hold MORE value – they jump to top of the pile like nothing else and are a referral strategy.
• Every Friday he writes five hand written notes

2. How do you make a non-exciting business exciting?

• First off, expectation is so low that there are almost more opportunities
• Have clean trucks, uniforms, manners – it will stand out!
• Have better processes

3. How do you let people know that you don’t want a monetary reward, but rather a referral as thanks?

• Have the conversation!

4. Is the pay it forward mentality more accepted now? Some people feel guilty asking for a referral without having anything immediately in return.

• Yes, pay it forward more accepted and expected – there is much more of a community idea now in small business.
• Help eachother.

5. Has social media made Chambers of Commerce irrelevant?

• No. Personal connection as important as ever.
• Social media enhances, accelerates relationship.

6. How much of the “try it” do you put out there for free?

• The try doesn’t have to be free. It can be an ebook, or a course, or something else that people pay a small amount for.
• Don’t always think in terms of “give it a way”.
• Give people a low barrier towards becoming a customer. Then give value so they’ll go for the big piece.

7. How do you set up partner community?

• Don’t be too rigid.
• Build a network with a mindset that “all of these people are people I would send my best customer too.”

8. How do you transition from being someone who volunteers to someone that people pay for?

• Build a product or service that people will pay for and show them the value of paying for it.
• When do you stand out enough so that people say “I need to pay for that”?

9. How do you deal with mistakes/errors?

• The more trust you can put in the bank, the more you’re able to say “we made a mistake”.
• Own up to it immediately, don’t let it go to far.

* – John Jantsch photo credit: DuctTapeMarketing.com

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In addition to being a very speedy typist, Jerod Morris is the Director of Blogging and Social Media for Orangecast.

He is neither a guru nor and expert, and is most certainly no social media samurai. However, he does enjoy strategizing and managing social media campaigns in addition to the many, many personal and client blogs that he writes for and oversees, including Midwest Sports Fans, Corporate Compliance Insights, IndieChristmas.com, and How-to-Blog.tv.