The Referral Engine: Teaching Your Business to Market Itself

The power of glitzy advertising and elaborate marketing campaigns is on the wane; word- of-mouth referrals are what drive business today. People trust the recommendation of a friend, family member, colleague, or even stranger with similar tastes over anything thrust at them by a faceless company.

Most business owners believe that whether customers refer them is entirely out of their hands. But science shows that people can't help recommending products and services to their friends-it's an instinct wired deep in the brain. And smart businesses can tap into that hardwired desire.

Marketing expert John Jantsch offers practical techniques for harnessing the power of referrals to ensure a steady flow of new customers. Keep those customers happy, and they will refer your business to even more customers.

Talk with your customers, not at them. Thanks to social networking sites, companies of any size have the opportunity to engage with their customers on their home turf as never before-but the key is listening.

-The sales team is the most important part of your marketing team. Salespeople are the company's main link to customers, who are the main source of referrals. Getting them on board with your referral strategy is critical.

-Educate your customers. Referrals are only helpful if they're given to the right people. Educate your customers about whom they should be talking to.

The secret to generating referrals lies in understanding the "Customer Referral Cycle"-the way customers refer others to your company who, in turn, generate even more referrals. Businesses can ensure a healthy referral cycle by moving customers and prospects along the path of Know, Like, Trust, Try, Buy, Repeat, and Refer. If everyone in an organization keeps this sequence in mind, Jantsch argues, your business will generate referrals like a well-oiled machine.