Word-of-Mouth Referrals are Gold

Word of mouth, often called referrals, are great because those folks who love your business best become your  cheerleaders.

Which begs the question - is there a ways to create an ongoing referral mechanism, a referral machine? You bet. But don’t just take it from me, consider the wise words from John Jantsch. John is one of the best marketing experts out there and he recently wrote a great new book o called The Referral Engine. In it, John offers readers a step by step guide to creating an ongoing referral machine.

The essence of creating your own referral machine is this:

1. Be Referral Worthy: Needless to say, the foundation of getting referrals from satisfied customers is to be a business that satisfies customers. “You have to be a great company worthy of being referred,” Jantsch says. People don’t refer business to mediocre businesses, but they do refer business to companies that exceed their expectations.

2. Start With Existing Customers: It is not enough to simply provide a good product or service at a fair price. “That is the minimum of what is expected of you,” John told me. Instead, your job, if you want referrals, is to take a customer through a cycle John calls “know, like, trust, try, buy, repeat, and refer.”

Makes sense, eh? For someone to refer you, they must first learn about your business, trust it, try it and like it, shop there again, and only then will they refer you.

Equally importantly, you have to make it easy for customers to refer business to you once they like you and are repeat customers: Create customer loyalty programs. Give people incentives to refer business to you. Ask for referrals.

And most importantly, connect with your customers and give them many ways to connect with you:

  • Connect using IM, Twitter, Facebook fan pages, and your website
  • Offer feedback forms on your site and with invoices
  • Take frequent customer surveys
  • Call them and ask how you are doing
  • Create customer review panels
  • Welcome customer complaints

3. Create a Strategic Partner Network: The idea here is to find businesses similar to yours – companies that share your values and are also exceptional and worthy of referrals. Then begin to do some work together, some joint projects. Maybe they can offer free samples of your products, and vice versa. Or do some webinars together. Create a group blog. Have a joint sale.

Because once you do that, once you create a valuable strategic partnership, all of a sudden you will have this other company singing your praises to their customers. A whole new group of people will be exposed to your business in a very positive way.

Want proof that this works? Let me refer you to The Referral Engine.

About the Author(s)

Steve Strauss

Steve Strauss is one of the world’s leading entrepreneurship and small business experts. He has been seen on CNN, CNBC, The O’Reilly Factor, and his column, Ask an Expert, appears weekly on

USA TODAY Senior Small Business Columnist and Best-Selling Author