How Reading The Referral Engine Changed My Business

by on December 27, 2012 · 14 comments

word-of-mouth-referrals

What if you could teach your business to market itself?

What if – instead of relying on expensive paid ad campaigns and direct sales, your business thrived based on referrals from happy customers?

Are You Good at Sales?

In starting my own business, I’ve learned that I’m not a very good sales person. I just don’t have that special instinct that I’ve seen great salespeople have. I’m too worried about inconveniencing people to ask for a sale.

A few months ago I read a book that literally changed my business. I had this book on my shelf for months before finally reading it. Once I finally picked it up, I couldn’t put it down.

The book is The Referral Engine, by John Jantsch.

Why We Refer Our Favorite Businesses

One of the premises of the book, is that people are “wired” to make referrals to family and friends. It feels good to be “in the know” about a great new restaurant, hip new club, or some new product and tell your friends about it.

Think about the last time you were walking down the street and someone stopped and asked you for directions. Didn’t it feel good to help them out and get them pointed in the right direction?

I know I enjoy referring my favorite products and businesses to my family and friends.

Creating a Compelling Experience For Your Customers

In this global economy, just about everything is a commodity that can be purchased cheaper somewhere else.

The way to differentiate your business is to provide real value, and deliver a compelling customer experience. People want to know that you are listening, and that you care about them and are willing to help them.

What if you could construct your “customer experience” in a way that they are truly satisfied and thrilled with your product and support, and are glad to tell people about you? What if you invested your time and money here instead of buying ads and hiring direct sales people?

That’s what The Referral Engine advocates – building your business in a way that provides remarkable products and services. So remarkable that your customers will want to refer you to their friends.

Starting My Business…

Right from the beginning I imagined Expand2Web as a customer service company – one that provides real value and that people are thrilled to work with.

My business role models include Tony Hsieh from Zappos, Jeff Bezos from Amazon, Jason Fried from 37 Signals, and now John Jantsch from Duct Tape Marketing. These companies all provide great products or services, and legendary customer service.

When we started selling our first product – The SmallBiz WordPress Theme – we answered every customer email and question (and still do).

As we scaled up and sold more themes, that meant hiring a full time person to handle the support and build a process around delivering great customer support in a world where many WordPress themes and software providers simply refer customers to a forum where customers help each other out.

We invested heavily in customer support so we could get back to every customer and help them be successful, and drive great new features back into our product.

This meant hiring a highly skilled person to build a customer support process and work directly with customers and answer their questions, and go above and beyond what anyone expects. And highly skilled people aren’t cheap!

But I was still missing something.

Building A Business That People Want To Refer

Reading this book made me realize something. Although we were getting referrals from our customers naturally, we weren’t really leveraging our heavy – and expensive – investment in customer service.

As you’ll see, we weren’t setting expectations about referrals early in the sales process, we weren’t making it easy for people to refer us to others, and we weren’t ASKING for referrals, even though most of our customers were happy to provide them!

So I followed the advice that John Jastsch gives in his book – we mapped out every customer interaction to see how we could provide a truly exceptional experience.

The book gave us a structure to leverage that investment in customer service and provide more value to our customers at the same time.

Customer Interaction Touchpoints

Customer Interaction Touchpoints

You can see from the map above, there are a lot of ways we interact with our customers.

Our Referral Action Plan for Expand2Web:

Here are a few of the things we did to improve our customer experience and encourage referrals:

1) We started setting expectations with potential customers early.

Before a customer even buys our product, we started setting expectations that we would ask them for a referral (when we deliver on our promise). On the sales pages and other pages about our products we explain that our mission is to make them so happy and successful they will want to tell their friends and co-workers about us.

This has the dual purpose of setting expectations that we will deliver real value and do whatever we can to make them happy, and also that we will ask them for a referral once we’ve delivered on that promise.

2) We created a “Customer Welcome Kit” that welcomes every new customer, and helps them succeed.

Another excellent suggestion from the book was to create a customer welcome kit. We followed this and created a customer download area so that each customer could log in and get 24/7 access to the latest version of our software, to our support, and step-by-step training guides.

3) We added some unexpected bonuses for our customers in the customer welcome area.

For example, we found that the biggest issue for many of our SmallBiz customers was learning how to do things in WordPress. So we licensed a series of 19 short WordPress tutorial videos and included that free to our customers.

4) We ASK for referrals at key points in the customer relationship and make it safe and easy for customers to refer us to their friends and family.

We’ve learned the crucial points to ask for referrals, and how to do that in a way that our customers feel safe and want to refer us.

For example, in the book, John Jantsch points out that there are some key times in your customer interactions that are best for asking for referrals.

Strangely, right after a support request is one of them. We’ve been working on ways to politely ask for referrals from our customers in a risk free way, and to make it easy for them.

Benefits, for Us AND Our Customers

This is a process that we are continually refining and improving. But already it has helped our business tremendously in four ways:

  1. Improved customer experience. which leads to more happy customers
  2. Better product. By reaching out to customers in this way, we get better feedback that goes right back into making our product better. We’ve had several new releases with great feedback from customers, and have another one coming out shortly that contains some fantastic new capabilities driven by customer feedback.
  3. Better relationships. With our customers. Not being a natural salesperson, it was hard for me to ASK customers for a referral. But asking for their help has led to many new relationships with my customers that I never would have had before. It turns out many people welcome the discussion, and are very willing to help.
  4. Increased referrals. This has already increased sales for us in a significant way.

Our mission now is to continue improving this process by creating an ever more compelling customer experience, from pre-sales through support, and making it easier for our customers to refer us to their family and friends. This is our primary marketing vehicle and the way we grow our business.

What about you? How do you get new customers? Do you pay for ads? Do SEO? Or are you building a business that your customers will refer to their family and friends?

p.s. When I read a great book, I make a mind map of it because it helps me remember the key things from the book. Here’s a copy of the mind map I made from the Referral Engine in case it is helpful to you.

The Referral Engine Mindmap - thumbnail

My Mindmap of The Referral Engine

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Article by »

Don is an entrepreneur based in Silicon Valley. He founded Expand2Web and is the publisher of the Expand2Web Blog, the SmallBiz WordPress Theme and the GetFiveStars Customer Feedback and Reviews service.

Don has written 264 articles on Expand2Web

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{ 14 comments… read them below or add one }

John Jantsch December 27, 2012 at 2:36 pm

Hey Don – obviously I am grateful for the kind words about my book, but I really love how you’ve created a real world road map that illustrates many of your key takeaways. You’ve given readers an awesome path to follow.

Reply

Don Campbell December 27, 2012 at 5:08 pm

Thanks John. I appreciate you stopping by.

Reply

Vinny O'Hare December 27, 2012 at 5:00 pm

Great post! I just bought the book based on your referral :)

I love the mind map!

Reply

Don Campbell December 27, 2012 at 5:09 pm

Thanks Vinny!
You won’t be disappointed – it’s a fantastic book.

Reply

David Abramson December 27, 2012 at 7:18 pm

Hey Don,

Awesome article…I put the book on my queue…looks like a great read.

Peace,
David

Reply

Don Campbell January 10, 2013 at 11:25 am

Thank you David. You will enjoy that book.

Reply

Matthew Hunt January 10, 2013 at 8:34 am

Don, great post! I think one of the best I’ve read in a while. I think it’s brilliant to start pre-selling the referral before they even buy.

Just put this on my giant white board wall:
know
like
trust
try
buy
repeat
refer

Reply

Don Campbell January 10, 2013 at 11:25 am

Awesome – thanks Matthew.

I was just reading a post on your blog – Which Tools Made Me Part Man Part Machine?

Excellent post.

Reply

Julie Larson January 11, 2013 at 1:48 pm

Thank you for the step-by-step plan, Don! I’m going to run out this afternoon and purchase The Referral Engine by John Jantsch!

I would also like to comment about the above and beyond customer care I receive as an Expand2Web member. You and Thomas always go the extra mile for the members and we appreciate you guys!

Reply

Don Campbell January 12, 2013 at 5:14 pm

Thank you very much Julie – it’s a pleasure having you in the group!

Reply

Andrew Bamford January 12, 2013 at 2:50 pm

Great article Don. The book sounds awesome. Yes, the saying ‘Word of Mouth is the best form of Advertising’ has been around since the beginning of time.

You guys keep me inspired and passionate about what I am doing.

Thanks heaps
Andrew

Reply

Don Campbell January 12, 2013 at 5:15 pm

Thanks Andrew.

Reply

Yvonne Herbst August 1, 2013 at 5:13 pm

Excellent and thoughtful article, Don .. thanks for taking the time to share how you are implementing a referral process in your own business; it was very interesting to me to see what you are doing and how you are doing. The suggestions here can obviously be adapted to and apply to any kind of business.

Reply

Roger Brooks September 13, 2013 at 12:56 pm

Don,

Thanks for sharing your insight and the recommendation of the book. Your write up can change many industries by changing their mind set of customer service.

Reply

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