What is Referral Marketing?

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One of the things that I love to do is learn. I swear that I'm a seminar junkie. Live seminars, webinars, teleseminars - you name it and I'm there. I attended one such seminar about a couple of years ago. This particular seminar was called a "Marketing Bootcamp".

I don't know about you but when I think bootcamp, I think army; and when I think army, I think combat, in your face and general discomfort. Don't get me wrong, the army is a good thing; it's just not for me. As a matter of fact, my father was a navy man (err go, I'm a navy brat) and he told me that he didn't think I was cut out for "bootcamp". I think he was right!

This particular marketing bootcamp was a good information session with great suggestions on how to grow your business. It gave you key factors in what you need to do to market your business and the results that you could expect. The presenter knew his stuff and did a good job engaging the audience. All in all I thought the whole thing was pretty darn good and being a bit of a marketing maven myself that's quite a compliment.

So the "seminar" is winding up and I'm thinking I might have been wrong about the bootcamp thing. There was no combat, no one was in my face, and I certainly wasn't feeling any discomfort...AND then it happened. I went up to the speaker to thank him for a great seminar and to talk about the "offer" of a free marketing audit. He took my information and then proceeded to ask me for THREE names of people who I think would be interested in a marketing audit. He said that his business was built on referrals and that he used "referral marketing" to build his business.

I'm not just remembering the bootcamp thing; I'm feeling it. I'm very uncomfortable and feeling like this guy is "in my face". I had never met this person before that day and am not familiar with his company or reputation and he wants me to divulge confidential information about my colleagues so he can call them to get business. He called this "referral marketing". I told him that I would have to think about it and then I high-tailed it out of there.

For the record, this is NOT "referral marketing". This is a high-pressure way to collect names for prospecting with the added value of making it look like a referral. Referral marketing is a carefully crafted system built on relationships and reputation. If done properly, it is one of the best and most cost effective ways to create consistent qualified leads from people who know, like and trust you. I encourage business owners all the time to use referral marketing. It's my area of expertise and I'm proud of it. But this was different and wrong!

Building a referral marketing system is one of the smartest things you could do for your business and here are four steps to help you do it right:

- Define a target market(s) for referrals

- Develop a referral source education system

- Create offers & execution strategy for referral marketing

- Build a referral follow up and conversion strategy

Remember, nurture the relationship with your clients and strategic business partners and you will create a flood of new business without spending a dime on advertising. That's referral marketing!

As an Effective Small Business Marketing Expert and Coach, Brenda understand the value of creating a solid marketing plan without spending a fortune.

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