So, when I heard John Jantsch of Duct Tape Marketing fame was coming out with a new book called The Referral Engine that lays out a step-by-step referral-generating process, I had to learn more. I read it. It rocked. But, as not just an entrepreneur, but a writer, I had more questions.
So, I asked John if he’d mind me grilling him “on the record.”
Here’s what went down when I held his feet to the fire…
JF: You’ve developed a reputation as a thought leader in small business marketing and a huge online audience around your Duct Tape Marketing brand, blog, books and programs. As someone who’s also a blogger and and author, I’m always curious, why write another book, especially with a mainstream publisher, when you have direct access to such a large online community?
JJ: Self publishing might make a lot of sense for many folks when the dollars and cents are the primary consideration. What publishing with someone like Portfolio does for the brand is provide reach and credibility far beyond what I have on my own. For instance, I want to build a global brand and the foreign language rights are being sold as we speak.
Many of the larger organizations that hire me to speak don’t spend their time on Twitter but do pick up books at the new release promotional table in a Barnes and Noble. Taking everything I’m doing with the brand and my lean staff, it makes complete sense.
JF: Referral Engine talks about generating referrals, one of the single most effective, yet often ignored ways to grow a business. Why do you think so little attention has been given to developing a more systematic approach to referral-driven growth?
JJ: I think two things are going on in businesses that don’t focus on referrals: (a) there is a fear of asking and (b) there is an underlying fear that perhaps they don’t provide the kind of value and experience that would warrant a referral. When referrals become a total mindset you go about fixing the gaps and that changes everything, including how you perceive your place in the market.
JF: You talk about something called “premium pricing” and the value equation as being key in generating referrals. In fact, at one point, you say, “I have yet to find a business that relies heavily on referrals and low-price leadership as shared strategies.” Can you explain a bit more about this idea and why it’s so important?
JJ: Referrals come in droves when you create something worth talking about. I suppose that can be low price, but only one person can really claim that and it’s not that much fun from a profit standpoint. When you get people talking because you are doing something amazing, innovative and unique, referred leads come to you actually expecting to pay a premium because someone they trust has explained the value of doing business with you.
JF: You outline 7 stages of referral development: know, like, trust, try, buy, repeat, refer. Sounds pretty straight forward, but when I’ve looked at implementation in a lot of small businesses, many of these steps end up being skipped. I’m wondering, in your experience, are they all really necessary? And, I’m curious, in your own experience working with hundreds of businesses, are there one or two stages that are most consistently missed…and why?
JJ: Yes I really think that they are necessary. Now, you can get buy skipping like and trust, but you often do so at the expense of attracting the ideal customer. Part of the purpose of these steps is to educate the customer, build a relationship and allow them to appreciate how you or your product can get them the greatest result.
As far as skipping – so many businesses attempt to go from know to buy. The “try or trial product or service” step is such a wonderful tool as it can become a nice profit center, but it makes it so much easier to step people up to a much larger sale through trust building.
JF: It seems everyone, at least in the world of social media, is throwing around the word “authenticity” these days. You have an entire chapter devoted to it, in the context of generating referrals, what do you really mean by “authenticity” and why is it so important?
JJ: I guess I’m talking about the entire business mojo here. It’s hard to be something your not, that includes attempting to create a culture that mirrors someone else. If your the cynical, dry witted, pain in the butt, experts in your field then embrace that and make it your brand and referral platform – people are drawn to honesty even if it’s not who they are.
JF: Another big focus of your approach to generating referrals for any kind of business revolves around what you call “Content as a Market Driver.” Why has generating content become so important as an element of the referral engine? And, what if your business is largely offline?
JJ: People have grown accustomed to finding information on anything and anyone. Even a largely offline business (not really sure there is such a thing, but let’s say most of your actual sales come face to face) must be able to be found when people go searching, must be able to build awareness and trust by educating and allowing people to sell themselves on your brilliance.
JF: A lot of the strategies laid out build on the foundation of content to create relationships and networks on a number of different levels. How much easier has social media made this for small businesses?
JJ: I really love social media platforms for small businesses because they provide another layer of engagement. Even those businesses that must rely heavily on face to face selling grab a competitive advantage when use tools like LinkedIn to build deeper relationships with existing customers and prospects. It makes everything happen much faster in my experience.
JF: One of things I enjoyed most about The Referral Engine, as both a former brick and mortar and now largely online entrepreneur, is that it’s not just strategy, it’s filled with tactics, processes and what felt like hundreds of websites in the form of both case-studies and resources. As a marketer, I’m pretty comfortable being fairly methodical with these things, but what do you say to a small business-owner who reads the book, sees a huge amount of value, but then feels a bit “aggressive” when it comes to implementation?
JJ: I don’t know really, mostly I’ve found that business owners are busy doing what that business does and are hungry for people that trust to lay out a step-by-step plans of action. That’s my brand I guess, simple, effective, affordable and always practical. (They can always go read Harvard books if they are looking for theory).
If you’re in business and you’re having trouble figuring how to intelligently structure a systematic referral program, John’s new book, The Referral Engine, is a must read.
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