Referral Marketing - it's more than 'word of mouth'

For those unfamiliar with the term referral marketing, I encourage you think about how useful it would be to turn your existing clients into your very own sales force. Freelancers often have limited resources to promote their services, Freelance Directory is ideal, but previous and existing clients also form a list of people that are familiar with you, know what you can do and may be willing to tell others. There's much more to it than just 'word of mouth' however. I term referral marketing as "a structured and systematic process that encourages, informs, promotes and awards your client and contact base to talk as much as possible about you, your company, your product and your service."

If word of mouth business is important to you, then consider the value of all the contacts you make in business.

Every customer or contact is important, but some may have a greater "referral value" to you than others. What does this mean? It simply means that some people have a much greater potential to make large numbers of referrals than others.

We all know people who are introverted or perhaps even "loners." That's not a bad thing. Some people just like to stick to themselves and lead a quite life, or maintain a small, close circle of friends.

But other people are "people's people." They are gregarious. They enjoy being with other people. They belong to clubs, organisations, professional groups, and they attend a lot of social gatherings and events. Some people have vast networks of friends and acquaintances, both personally and in business.

They may also have hobbies which put them in touch with dozens or hundreds of people with similar interests.

When you learn to recognise that some of your customers and contacts naturally have higher referral value than others, you can focus your energy on those people and bolster your referral effort by developing the best relationship with them and "qualifying" for their referrals.

You should also consider developing relationships with people who would know contacts in your target market i.e. if your preferred customer market are builders, then you could get to know architects, tradesman, or if you are a marketing consultant then contacts with graphic designers, copy writers, printers, accountants, web developers etc. would be good for you. Your "Third Party Contacts" may never do business with you, but their referral value would still be priceless.

Many business people recognise that certain customers and contacts are virtual "referral gold mines." When you also have a referral mindset, you increase your chances of finding such people more often, and will reap the benefits.

And as for those people with "low referral value" well, never freeze them out. Never forget a contact. That's because people can change. Circumstances change. A low referral value customer today may be elected president of a local civic club or professional organisation tomorrow! Great referral marketers know that every customer or contact is valuable, and has the potential to become more valuable in the future.

Case Study: I remember once I invited a client to a networking meeting (he was the MD of a large copier retail company whose preferred customers were companies with a minimum of 25 employees). He was always very negative about networking stating it was just for "one man band" businesses and professionals and he never got any business out of them, so he declined the invitation very bluntly.

The next day I attended the meeting which had approximately 25 business owners present (all freelancers). When it came to the normal 60 second presentations I did not talk about myself, instead I asked the following questions to the people gathered: "As a matter of interest how many of you currently have a client who has at least 25 employees?" everyone put their hands up, I then asked: "How many of you work with at least two clients with over 25 employees?" Guess what they ALL put their hands up again.

I went on to explain to them about how my client had turned down my invitation to come to the event to meet them and I told them why. Several of the attendees came up to me later and thanked me for making them understand the value of all contacts.

In reality my client had turned down the opportunity to meet up with 25 highly receptive and like minded business contacts, all of whom collectively had at least 50 contacts with the ideal type of prospects he was looking for!

I knew my client did not have the best personality for networking, developing relationships or referral mindset, so I was not surprised he had a problem getting referrals from previous networking events.

So instead of sitting in his office that morning, my client could have been meeting exciting new powerful contacts who could have been introducers to future clients.

Who lost out then!

Remember: every contact is a potential gateway to many future contacts.

This article is based from an excerpt from Vince's book "The Power of Referral Marketing for Freelancers", available through

Vince Golder

Goldnet Referral Marketing




13th June 2008

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