I recently listened to John Jantsch speak about his new book “The referral engine: Teaching your Business to Market itself“. This post is part of a series of 4 that provide the valuable insights that I drew from his words.
The power of word of mouth
John spends a lot of time out talking to small business owners and found that in contrast to large corporates, most small businesses and entrepreneurial start-ups say the bulk of their customers come from word of mouth. They come because of another customer’s recommendation.
If you run a small business or are an entrepreneur, this then is key. How do you make a business highly referable? How can you create a system so that referrals happen consistently?
John outlines 6 “realities” of the world that we can use to build our referral system:
- People make referrals because they need to. We are wired this way. It builds my social capital if I can share valuable, useful services with friends that need them.
- Referral is a big risk– a referral means that I am loaning trust to your organisation. This level of trust is more important with doctor or lawyer than with a decent local restaurant. Companies can reduce perceived referral risk through consistency of service delivery.
- Nobody talks about boring businesses. Will I talk about your service, people or company at a party or over lunch? What is unique? What is special?
- Consistency builds trust. Steps: 1) Know a person 2) Like the person 3) Trust the person. I have to get to know you, then to like you before I begin to trust you. Any surprises along the path and I will not reach “trust”.
- Marketing is a system. Digital interactivity is at the center of marketing. It is not alone, but cannot be avoided in today’s Web 2.0 world. The marketing concept of the customer funnel is broken and needs replacement.
I will continue this series next week with part 2: “Get your customers to do your best marketing for you Part 2: The marketing funnel is broken“.