How to build a referral engine?

Is your business struggling to grow? Do you see other companies rapidly attaining success as their loyal customers spread their brand, story and product all over the internet and the world?

Well, the difference is in referrals according to The Referral Engine by John Jantsch. Referrals are recommendations for your company made by customers or partners to new prospective customers. They’re essential to any in-depth marketing strategy and can make all the difference between a floundering start-up and the next big thing.

So, you want people to refer your company to others. Well, you can make that goal a reality by tapping into the psychological impulse that compels humans to make recommendations of any kind.

The social nature of humanity means people want to make referrals as a means of earning recognition. This makes perfect sense when you consider that, within tribal societies, maintaining good social standing was a precondition for survival. After all, failing to make people like and precondition for survival. After all, failing to make people like and value you could mean rejection from the tribe and near-certain death.

As a result, a deep desire for social validation is hardwired into our brains. In fact, the quest for validation from others is so deep within us that it’s controlled by the same part of the brain that’s responsible for primitive functions like hunger, sleep and sex drive.

To benefit from this impulse to earn social validation, your business should only present relevant and useful information. For instance, telling another tribe member about a good fishing spot during a time of famine would naturally earn the referrer a good deal of respect.

But how do you make your business referral worthy? By showing that it can be trusted to provide a stellar solution or experience. This is a vital step because making referrals always carries with it the risk of losing credibility if what is being referred fails to deliver. As a result, people rarely refer businesses they don’t trust.

To make matters more complicated, building trust is a long-term game, requiring commitment and consistency. Take Scott Ginsberg, an author and speaker on the art of approachability, for example. He has worn a name tag every single day for over eight years. Naturally, this grabs the attention of others in public, who often approach him. More importantly, however, this commitment to standing out has earned him the trust of others as a true expert on approachability.

Why might a customer refer you? It’s an essential question that your referral strategy must address. To find your answer, you have to offer something different that people will talk about, or identify a way that you already do.

Keep in mind that, while such a difference has to be extraordinary, it can often result from a slight change, rather than a groundbreaking innovation. The aim here is simply to take a product or service that’s already in high demand and make it easier to want or need.

To do so, you need to innovate by doing things differently in a proven market or simplifying the product you already offer. A great example of this differentiation strategy is the Cheeseboard Pizza Collective in Berkeley, California. Unlike normal pizza shops, it only offers a single kind of pizza each day of the week. This fixed menu dramatically lowers costs and allows the business to use higher quality vegetarian ingredients. Such differentiation through innovation has meant that this cooperative has a lineup out the door and down the block, day after day.

So, apply a differentiation strategy and, once you have, stand out even further by infusing it with authenticity. People want to connect with and talk about businesses that are driven by a powerful purpose, and the wonderful thing about this greater purpose is that you don’t even need to communicate it; if it’s a true purpose, it’ll be present in everything you do.

You may think that getting more customers is always a good thing, but the truth is a bit more complicated. Having the right kind of customers will increase the positive experiences your clients have, thereby producing buzz for your business. In other words, not all customers are a match for your business, but you can identify which ones are by creating a profile of your ideal one.

Just think of a current customer who brings you the most profit and referrals. From there, be as detailed as possible: incorporate real customer stories, ask questions about the challenges your customers face, the people they trust and, finally, go to the customers who already refer your business to ask them why they do so.

For instance, the customer profile for a home renovation company might be married homeowners with a combined income of over $100,000, who are entrepreneurial and have a long term plan for their lives. They’re engaged in their local community, have no intention of community, have no intention of moving and have renovated before.

Then, with your customer profile in hand, you can produce a key story that’ll engage your customers emotionally. This is essentially a narrative that you convey through your actions, marketing and branding. When you design it, keep your ideal customer in mind, trying to speak directly to her. You should acknowledge her emotions and focus on what best connects with and captivates her.

Finally, once you have your story, test it out on your friends, neighbors and even your spouse. Figure out what resonates most deeply and revise your narrative accordingly. Once it’s polished, you can use it to engage with potential customers.

Try to apply it to your blog for a start!

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