Marketing is the most important system in any business. Referral generation is a key component that, to be effective, requires its own documented system.

Most referrals happen by accident. Creating a referral system makes them happen intentionally because it puts your company in the right place with the right source at the right time. Here’s what you need to do for any referral generation system you design.

  • Become more referable. Before you pass “Go” you must analyze every way that your business interacts with clients and prospects — marketing related or not — and inject positive, brand-supporting elements into each interaction. Many referrals are lost because the production crew of a trade contractor roughed up the relationship.
  • Target your sources. Look at your customers under a microscope. Pinpoint the profile of a customer who is already referring business, then focus most of your attention on that kind of customer by making it easier for them to refer.

Also, figure out who else has your ideal customer as a target. Strategic partners are a good place to start. Respondents to a recent survey I conducted said that less than 30% of referrals came from strategic partners; I think that should be more like 60%. Don’t be afraid to make referrals to others — give and you shall receive!

  • Educate your sources. Ever get a bad referral? It was probably your fault. We shouldn’t ask for referrals until we tell our referral sources in great detail how they are to recognize our ideal customers, the kinds of things our ideal customer might say to signal them as a lead, and the exact words to use when telling a prospect about us.
  • Motivate your sources. Money doesn’t work as well as a creative, on-message offer that turns referring business to you into a game. I helped one remodeler start a “Carpenter for a Day” referral program that was relatively inexpensive to implement but really struck a chord with clients.
  • Follow up the lead. A referred lead is different, so you have to be prepared to follow up in a different manner. In all likelihood, the sales cycle will be different as well, so plan on it.
  • Follow-up with sources. Thank them, of course, but also build feedback loops so that they know how much good they are doing by referring your business. Create key indicators of referral success and make them part of your marketing measurement dashboard.

Each of these parts needs to be thought out, documented, and baked into your day-to-day marketing efforts. Plan to change, expand, and moderate your system parts as you take them out into the real world.
—John Jantsch is a marketing consultant and the creator of the Duct Tape Marketing System and Duct Tape Marketing Consulting Network.

More REMODELING articles about referrals:

Marketing for Referrals

5 Surefire Ways to Attract More Referrals

Everyone Sells: Getting Your Whole Team Involved in Led Gen