• by Chad Little , February 9, 2010

I have two questions for you:

1. What are you currently measuring to gauge if you're on target to meet your marketing objectives?

2. How are you using the data you measure? Is it posted around the office, is it part of regular management meetings? Is it front and center for all to see?

Most in our industry have a myopic view on the front-end of the selling process. All focus is on the customer who comes to your Web site for the first time and purchases on that visit.

This is largely driven by the fact that the online world is able to measure so much data about our marketing and advertising efforts, whereas in the offline marketing world, you don't have as much data to back up consumer behavior to your marketing touch points.

It seems as though because we are able to measure so many details, we tend put extreme focus on the conversion ratio. If you combine that focus with that the prevailing thought process that once visitors have converted, they will always be customers, it would appear that, although online marketers have access to mountains of data, they have a very slim view of what creates growth and success over time.

The Harvard Business Review published a piece a few years back (originally done in 2003) that showed, after two years of data analysis, there was one key figure that was a better predictor of growth than any other. What was that metric? Not surprisingly to me, it was the willingness of a customer to refer a company or service to someone else. It wasn't about customer satisfaction or even loyalty campaigns. The key to growth is all about how willing your customers are to speak up to friends and family about your offering.

Today, it is increasingly difficult to slap together a crappy movie, restaurant, or service and make a quick buck. People are connected! Tools like review services and social networking sites are everywhere. The time when one could provide a subpar product or service is gone. On the flip side, if you provide a product or service that is superior, you have viral and word-of-mouth marketing to use to your advantage. (The best part is that they are free!) If you offer something and it's great, people will talk it up and refer it to others.

Not only can your referral rate be a solid indicator of success, but simply asking questions around it can create a cultural shift in your organization. Here are a few examples:

• Restaurant managers have the best intentions when they stop by your table and interrupt your conversation to ask, "Is everything ok?" This question is a customer satisfaction checkpoint, but does it really go far enough? If they're going to interrupt your meal, why not ask something that might elicit a much more meaningful response, such as, "What would it take for you to refer one of your friends to visit us?" I can see myself taking some time to provide solid, meaningful feedback when asked a specific question like that.

• Imagine a Customer Service agent that didn't end the call with the typical "Can I help you with anything else?" but rather said, "So tell me, Mr. Smith, would you refer us to a friend? Why or why not?"

• You have a receptionist that greets all of the customers that comes into your office each day. What if your receptionist asked, "Would you refer us to others? If so, who and why? If not, why is that?" There is much valuable information to gather from your customers; you'll never have access to it if you don't ask for it!

In addition to asking your customers their thoughts about your product, this is also one of the most important questions for you to ask yourself. Yes, you, the marketers out there. Are you willing to refer your own service/company to others? If not, why is that? Are you able to create change so that one day you will be more willing to answer yes?

If your company isn't bold enough to ask the question because it is afraid of the answer, and if there is no hope for change, you need to find someplace else to work. How can you properly market a company and its services that even you wouldn't refer yourself!?

Start asking for referrals, and even more importantly, start posting your referral rate. Strive to improve the rate and make it part of regular discussions at management meetings. The lifetime value of a repeat customer is key -- not that one-time conversion on the front end.