Agent to Agent: Is Referral Marketing Dead in a Digital World?
By Shaun Irwin
Yogi Berra is well-known as a Hall of Fame baseball player, but is perhaps more famously known for being one of the most quoted people in sports. And some lines he actually said!
One quote Yogi is known for — whether he said it or not — is, “Nobody ever goes there anymore. It’s too crowded!”
Yogi’s short-sighted wisdom is relevant here because when you check in on the marketing strategies and success stories from top sales organizations, and more specifically, their top sales people, it turns out what worked before still works.
A digital world can and should expand your referral marketing capabilities. In fact, social media is a little like having a lot of money; it magnifies both your good qualities and your weaknesses. The time-tested and true remaining facets of referral marketing are still Know, Like, and Trust!
Referral marketing has always been about giving. Digital connectivity only increases your capacity for channeling your efforts. In his phenomenal book Give and Take, Adam Grant, the youngest tenured professor ever at the Wharton School of Business and exhaustive researcher, shares great stories from all walks of life and careers built from the old models of meet, greet, shake, help and mold, to the increased capacity of givers to reach more and more people than ever. I highly recommend you follow Grant and pay attention to his seminal work. A giving mindset is an abundance mindset which leads to greater capacity for growth in all of us.
You can use digital processes along with other media to open doors to Know, Like and Trust, and produce results. When meeting with business professionals or sales people, I’ll ask them to list their lead sources. In professional service organizations, referrals almost always land in the top three. In more varied industries, referrals occasionally land in the top five but are still counted as an important element of their success.
The next question is the one that leads to ummms and ahhhs:
What is your process for attracting and converting more referrals?
Not that sales people don’t do a lot of things which they are perfectly willing to shout out and share — they’ll send a thank you note, give the referring party a call (not as often as they should), reply right away (“right away” having a different meaning, depending who you ask), send a thank you gift, immediately add them to their digital newsletter or blog mailing (maybe a little too immediately), and the list goes on — it’s just that it’s not written down. Anywhere! Over and over, it’s completely in their head. What specifically happens when a referral hits their universe is mostly left to their gut at the moment they get it. If they happen to be on vacation, sick, or busy working on another project, well then, oops, sorry about that, we missed it.
The tools that we have now can make this process so much more robust and effective if we’ll take a miniscule amount of time to work on them (compared to the gigantic payoff).
Getting your head around how much better your referral machine can be with a replicable process is a key to making it worth it. Start with math.
Are you any good at math or do you have any desire to be? There’s not a right or wrong answer, there’s just an honesty you need to assess with yourself before you move on. If you’re good at math, break apart how much an ideal referral is worth, both on an annual basis and from a lifetime value perspective. Your lifetime value is the annual revenue times the length of time your clients normally stick with you.
If you’re not good at math or aren’t motivated by it, and your eyes are already starting to glaze over from the mere description of lifetime value of a client, ask for a volunteer from your team who loves math. Go ahead, send out an email and ask for one. You have one nearby and maybe you just don’t know that Sudoku-playing maniac is in the office next door.
How often does an ideal referral convert into a client? Almost universally, I’m told, “at a much higher percentage than anyone else,” but very few measure what that means. The more you like to help others succeed, the better you’ll be at giving and getting referrals.
You can do this and when you do, it will illuminate all that can be awesome about referral marketing and can be amplified by digital marketing. Your world of who and what you know has been greatly expanded by digital connectivity, and will continue to grow each and every day.
Digital media and technology should expand your referral marketing, not detract from it. When people know, like and trust you, now they can tell people that much faster!
Shaun Irwin is a multi-million dollar producer, national award winning marketer, and author of Convertible Referrals: How to Get More Referrals and More Clients. You can subscribe to his free selling tips and ask your sales questions at www.convertiblereferrals.com.