• by Neil Berman , July 14, 2010

Every company likes to get referrals.  When a customer or friend recommends your product or service, the sales process is streamlined and the close ratio goes way up.  Referrals lead to longer term customers that have a higher lifetime customer value.

I just finished reading "The Referral Engine" by John Jantsch, also author of "Duct Tape Marketing."  In the first book, Jantsch discusses how referring is instinctive for most people and shows businesses how to tap into this desire. 

This got me thinking about my own company's referrals.  I was surprised to learn that half of our new business comes from referrals.  In fact, referrals outperform by a wide margin marketing leads from trade shows, cold calling, our website and other efforts.

Our leads come from a wide variety of sources.  They come from our customers, of course, but they also come from former customers, friends, family, business partners and vendors.

We are doing many things right.  We are good at asking for referrals, we ask prospects where they heard about us so we can recognize referral sources, and we reward people who refer a lead to us.

All of this is very manual, which made me think: if there is a process to automatically generate referrals, a business could exponentially grow its customer base with little additional effort.

Could email marketing be the engine that makes this possible?

Email marketing makes perfect sense as a referral engine because email touches so many referral sources, and many other sources as well. Also, the technology infrastructure is already built to automatically capture and feed referrals into tracking systems, such as CRM systems.

A few ways to incorporate referrals into email marketing include:

•   Ask for referrals with every email communication you send to customers.

•   In e-Newsletters, include a referral link in a sidebar or footer.

•   Provide links so recipients can share the email, including Forward to a Friend and a refer link that leads to an easy to fill-out form.

•   Mirror referral requests on blogs, websites and in social media.

•   Include a referral link in the footer of press releases and other marketing efforts.

Remember to ask for a referral so it doesn't actually sound like you're asking.  Instead of saying "Refer a Friend," ask "Know someone who will benefit?"  No one likes "in your face" marketing. 

If you do not already have a referral program, why not start one right away.  The cost to you is minimal and the potential is great.