The objective of this presentation is to introduce you to referral marketing- a systematic referral-generating system that can be adopted, cost effectively, by any developing enterprise.
1. A Step by Step Introduction
to
REFERRAL MARKETING
Brought to you by 5wh
2. OBJECTIVE
The objective of this presentation
is to introduce you to referral
marketing- a systematic referral-
generating system that can be
adopted, cost effectively, by any
developing enterprise
February 2011 5wh Marketing 2
3. ACKNOWLEDGEMENT
ACKNOWLEDGEMENT
This work is not for sale. It was
adapted from the book “Business
“Business To know more about our
by Referral” by Ivan R Misner,
Referral” company and our
Ph.D. and Robert Davis products & services and to
start a relationship, here is
Adapted into this presentation by Caleb:-
Caleb:-
Caleb Mutsumba, founder Five WH Cell:
Corporate Services (Pvt) Limited +263 712 620 287
(“5wh”), Harare.
(“5wh”), +263 772 466 540
Email:
5wh is a relationship-based
relationship-based caleb@zol.co.zw
Business Services company which
specializes in Internal Audits, Other:
Forensic Audits and Business P.O. Box 1361 Harare
P.O. Box 1361 Harare
Systems Consultancy.
February 2011 5wh Marketing 3
4. DEFINITIONS
v RMC - Referral Marketing Campaign
v Prospect - Prospective buyer
v Referral – Name of a prospect (the person
referred to you by your source)
v Source - Referral Source (the person who
provides you with a referral)
v Network – A systematically selected group of people
(contacts) that you can call on when the need arises
v BNI – Business Network International
v NSA – National Speakers Association (USA)
February 2011 5wh Marketing 4
5. DEFINITIONS
You Source
Prospect
February 2011 5wh Marketing 5
6. BNI/NSA SURVEY
Most Effective Method of Generating
Referrals
Referral Service
Internet
Recognition
Mothod
Seminars
Incentives
Ask in Writing
Ask Orally
Networking Groups
0 20 40 60 80 100
Percent of Respondents
February 2011 5wh Marketing 6
7. IT’S ALL ABOUT RELATIONSHIPS
IT’S
v The key concept in referral marketing
is relationships
v A relationship benefits both parties
v Relationships must be nurtured so
they can grow from VISIBILITY
through CREDIBILITY to
PROFITABILITY (VCB)
February 2011 5wh Marketing 7
8. VCP: THE THREE PHASES OF
GETTING ACQUAINTED
1. Visibility
üYou and the other guy become
aware of each other
üThe greater your visibility, the
more widely known you will be
üMust be actively maintained and
developed
February 2011 5wh Marketing 8
9. VCP: THE THREE PHASES OF
GETTING ACQUAINTED
2. Credibility
üThe quality of being reliable,
worthy of confidence
üWill a third party vouch for your
credibility
February 2011 5wh Marketing 9
10. VCP: THE THREE PHASES OF
GETTING ACQUAINTED
3. Profitability
üMature relationship; mutually
rewarding
üMust be cultivated
February 2011 5wh Marketing 10
11. FINDING YOUR STARTING
POINT
The ability to clearly communicate
your business mission, the nature of
your products and services, your
target market and your competition
will be invaluable as you begin to
build your Network
February 2011 5wh Marketing 11
12. FINDING YOUR STARTING POINT
WHAT DO YOU SELL?
Know by Heart - Your Products and Services
v What is the purpose of your
Product/Service?
v What needs/wants does it satisfy?
v How would you describe it?
v What are its benefits, functions, features?
v How is it delivered to the customer?
v How much does it cost?
February 2011 5wh Marketing 12
13. FINDING YOUR STARTING POINT
WHAT DO YOU SELL?
Know by Heart - Your Target Market
v Who are your most likely customers?
v Why do they come to you?
v What is your area of expertise?
v What area of your business gives you the
most pleasure and the most profit?
v Where should you concentrate your referral
gathering efforts?
February 2011 5wh Marketing 13
14. FINDING YOUR STARTING POINT
HOW WELL DO YOU COMPETE?
Know by Heart - your Competitive
Position
v Are you cost competitive?
v Are you price competitive?
v Are you quality competitive?
v Are you seen as the supplier of choice?
v Is your market share growing or not?
February 2011 5wh Marketing 14
15. HOW YOUR NETWORK CAN
HELP
They can:
v Display your literature and products
v Distribute your marketing information
and materials
v Make promotional announcements for
you
v Invite you to attend events
v Endorse your products and services
February 2011 5wh Marketing 15
16. HOW YOUR NETWORK CAN
HELP
They can:
v Nominate you for recognition and
awards
v Provide you with leads
v Provide you with referrals
v Make initial contacts with prospects
and sources
v Introduce you to prospects
February 2011 5wh Marketing 16
17. HOW YOUR NETWORK CAN
HELP
They can:
v Arrange meetings on your behalf
v Follow-up with referrals they have given
you
v Publish information for you
v Serve as a program or event sponsor
v Sell your products and services
v Share information and knowledge with you
February 2011 5wh Marketing 17
18. HOW YOUR NETWORK CAN
HELP
Remember:
v Keep a list of your needs with you at
all times
v Knowing how to match your needs
with the right sources is key to
obtaining the types of help you need
February 2011 5wh Marketing 18
19. THE NETWORK ARCHITECTURE
Three Function-based Components:
v Information Network
v Support Network
v Referral Network
February 2011 5wh Marketing 19
20. THE NETWORK ARCHITECTURE
How do you Build a Network:
v Categorize your Network members
into each of the 3 components
v Identify as may prospective Network
members as possible; i.e. the most
qualified or experienced people you
know or know of
February 2011 5wh Marketing 20
21. THE INFORMATION NETWORK
Categorizing your Network members:
v People like you
v People who are in your profession
v People who were in your profession
v Authors in your industry/sector
v Regulators in your industry/sector
v Trainers in your industry/sector
v Consultants in your industry/sector
v Members of professional organisations
February 2011 5wh Marketing 21
22. THE SUPPORT NETWORK
Categorizing your Network members:
v Your mentors
v People you have mentored or taught
v People you have helped
v Co-workers, associates, classmates
v Family and friends
v Members of non-business groups
v Former managers, supervisors,
instructors
v Church leaders, members, groups
February 2011 5wh Marketing 22
23. THE REFERRAL NETWORK
Categorizing your Network members:
v People in your contact sphere (those who
complement rather than compete with you)
v Satisfied clients
v People whose business benefits from yours
v Others with whom you do business
v Staff members
v People to whom you give referrals
v Anyone who has given you referrals
v Members of business referral groups
February 2011 5wh Marketing 23
24. STRNGTHENING YOUR
NETWORK
v Customize your network (create other
components and categories as
appropriate)
v Identify at least three individuals per
category
v See it as creating your own Yellow Pages –
i.e. a list of experts and contacts for you to
get acquainted with before you need them
v Spot the voids (categories with less than 3
people) and strive to fill them
February 2011 5wh Marketing 24
25. GETTING TO KNOW YOUR
NETWORK MAMBERS
GAINS – The least you should know about
yourself and anyone you wish to establish a
relationship with:
vGoals
vAccomplishments
vInterests
vNetworks
vSkills
February 2011 5wh Marketing 25
26. GETTING TO KNOW YOUR
NETWORK MAMBERS
Goals
ØShort-, medium- or long-term
personal, business, etc. objectives
ØDefine goals clearly, i.e. SMART
ØShare your goals with your Network;
that way you will be most helpful to
each other
ØKnow what you want and need
February 2011 5wh Marketing 26
27. GETTING TO KNOW YOUR
NETWORK MAMBERS
Goals
ØShort-, medium- or long-term
personal, business, etc. objectives
ØDefine goals clearly, i.e. SMART
ØShare your goals with your Network;
that way you will be most helpful to
each other
ØKnow what you want and need
February 2011 5wh Marketing 27
28. GETTING TO KNOW YOUR
NETWORK MAMBERS
Accomplishments
ØGoals that have been achieved
ØMay be modest, but satisfying, e.g.
creating a marketing plan
ØIn conversation, encourage people to
talk about their accomplishments
ØShare your accomplishments with
others
February 2011 5wh Marketing 28
29. GETTING TO KNOW YOUR
NETWORK MAMBERS
Interests
ØThe things you enjoy doing, talking about,
listening to or collecting
ØShare your interests with others, the more
you have in common the stronger the
relationship
ØMatching gifts, information, etc. to
someone’s desires comes from knowing
their interests
February 2011 5wh Marketing 29
30. GETTING TO KNOW YOUR
NETWORK MAMBERS
Networks
ØMay be formal or informal, e.g. ex-schools
ØTo the saying’ “It’s not what you know but
whom you know” can be added “and whom
the people in your Network know”
ØEach Network member is part of several
other networks
ØKnow their networks and let others know of
your networks
February 2011 5wh Marketing 30
31. GETTING TO KNOW YOUR
NETWORK MAMBERS
Skills
ØTalents, abilities, gifts
ØMany of us are unaware of the skills
we possess
ØInventory your skills reliably
ØLet others know of your skills
February 2011 5wh Marketing 31
32. GETTING TO KNOW YOUR
NETWORK MAMBERS
Discovering Others’ GAINS
ØListen
ØObserve
ØAsk questions
ØReview written materials
ØAsk others
ØShare your GAINS (“Givers gain”)
February 2011 5wh Marketing 32
33. GETTING TO KNOW YOUR
NETWORK MAMBERS
Recording the GAINS
ØKeep a record of the GAINS of your
contacts
ØContinually update the GAINS records
ØLabel each item G, A, I, N or S for easy
reference
GAINS is the minimum you have to
know of your contacts
February 2011 5wh Marketing 33
34. GETTING TO KNOW YOUR
NETWORK MAMBERS
Quality Time
ØSpend some time with your contacts
ØBe prepared to discover more GAINS
(yours and theirs) and other attributes
ØThe more someone knows about you
the closer you are to their mind
February 2011 5wh Marketing 34
35. GETTING TO KNOW YOUR
NETWORK MAMBERS
Matching Needs with Sources
ØDetermine type of help you prefer
from each contact
ØA good match takes into account the
source’s availability, flexibility,
interest and accurate GAINS
February 2011 5wh Marketing 35
36. EIGHTEEN WAYS TO
MOTIVATE YOUR SOURCES
1. Volunteering – help a source achieve a
goal
2. Recruiting – offer a source a function or
task on your business
3. Researching – e.g. survey participation
4. Reporting – e.g. interview source for article
5. Source Seeking – ask source to name
someone who can do something for you,
inform you, etc.
February 2011 5wh Marketing 36
37. EIGHTEEN WAYS TO
MOTIVATE YOUR SOURCES
6. Advice Seeking – not the kind they would
charge you for
7. Advising - not the kind you would charge
for
8. Announcing – forthcoming events,
opportunities, etc
9. Shopping – pre-purchase activities or
enquiries
10. Purchasing – becoming your sources
customer
February 2011 5wh Marketing 37
38. EIGHTEEN WAYS TO
MOTIVATE YOUR SOURCES
11. Connecting – help sources expand their
Networks
12. Inviting – invite ‘em (remember their
GAINS!)
13. Recognizing – rewards, awards, etc.
14. Horn Tooting – not of the bragging type
15. Collaborating – informal partnering for
mutual benefit
February 2011 5wh Marketing 38
39. EIGHTEEN WAYS TO
MOTIVATE YOUR SOURCES
16. Sponsoring – backing for projects or
programs
17. Promoting – “Do unto others as you …..”
18. Auditing – client feedback for testimonials
Offer any other kind of help as appropriate, e.g.
help sources implement this referral-
generating system
February 2011 5wh Marketing 39
40. ACTIVATING YOUR REFERRAL
NETWORK
The Five Phases:
1. Recruiting referral source
2. Briefing referral source
3. Priming the prospect (by referral
source)
4. Initiating contact with prospect
5. Rewarding referral source
February 2011 5wh Marketing 40
41. RECRUITING REFERRAL
SOURCES
v Plan your agenda and call them
v Purpose of contacting them is to-
i. ask for referral generating support
ii. give them a brief overview of your plans
iii. schedule an appointment to detail the plans
v A few guidelines -
February 2011 5wh Marketing 41
42. RECRUITING REFERRAL
SOURCES
Ø Start with appropriate greeting and small-talk
Ø State purpose of call and time you need
Ø Ask whether it’s good time to talk
Ø Talk in terms of your source’s interests - how
does your proposal benefit him/her
Ø Schedule a meeting or tele-meeting
Ø Advise him/her you have information for
him/her to review
February 2011 5wh Marketing 42
43. BRIEFING YOUR REFERRAL
SOURCE
Objective: you want the referral source to:
ØMake initial contact with prospect
ØSend background information to prospect
(and to you)
ØLet prospect know of your relationship with
source
ØBriefly introduce your services to prospect
ØIntroduce prospect to you
ØFollow-up with prospect afterwards
February 2011 5wh Marketing 43
44. BRIEFING YOUR REFERRAL
SOURCE
Planning:
ØShow them how they can help you
ØDevelop literature for them
ØPrepare material that they can use
ØGive them clear instructions of what they
should do for you
ØProvide administrative and other support
ØPay their consequential expenses
February 2011 5wh Marketing 44
45. BRIEFING YOUR REFERRAL
SOURCE
The Short Course:
ØThe more your referral sources know
about your products/services the better
they can articulate them to prospects and
the better they can select appropriate
prospects
ØKnowing each other is a two-way street.
Remember GAINS!
February 2011 5wh Marketing 45
46. BRIEFING YOUR REFERRAL
SOURCE
The Short Course:
ØSome ways to help sources get to know
your services/products better:
ü Let them sample your products/services
üAsk them to critique your marketing material
üSend them your newsletter
üAsk them to introduce you when you do
presentations
üTell them you want to know them better, ask
about their GAINS
February 2011 5wh Marketing 46
47. BRIEFING YOUR REFERRAL
SOURCE
The Short Course:
ØSome ways to help sources get to know
your services/products better:
ü Invite them to events where you can learn more
about each other
üRecord information about your services/products
in your answering machine or switchboard
üInvite them to speak to your groups
üInvite them to visit your web page
February 2011 5wh Marketing 47
48. PRIMING YOUR REFERRAL
SOURCE
The Short Course:
ØSome ways to help sources get to know
your services/products better:
üInclude information about you on the “sig” file
of your email
üAsk them for advice
February 2011 5wh Marketing 48
49. PRIMING YOUR REFERRAL
SOURCE
This is the only action within the five-phase
cycle which is not ours to take – the ball is
in the sources court. The aforementioned
briefing (i.e. training and educating)
sessions are therefore crucial.
It’s all to do with trust:
Prospect trusts source. … .source trusts
you. You want prospect to trust you!
February 2011 5wh Marketing 49
50. PRIMING YOUR REFERRAL
SOURCE
The Referral source will have to:
ØPrepare the ground for you to know how best
to approach prospect when your time comes
ØFollow-through and arrange for either
prospect to be ready to hear from you or
introduce you physically
ØGive you the feedback, so you can take over
direct contact with prospect in due course
February 2011 5wh Marketing 50
51. CONTACTING YOUR
PROSPECT
Remember the 3P’s: Planning. Planning. Planning
üBefore making contact, do your homework
üKnow exactly what material and
correspondence has changed hands
between source and prospect; have copies
üFind out from source the best way to
make initial contact, phone, fax, email?
February 2011 5wh Marketing 51
52. CONTACTING YOUR
PROSPECT
ØPurpose of first contact is not to make a sale.
The purpose is to:
üGet to know the prospect better
üHelp prospect to get to know you better
üBegin to build a relationship
üPosition yourself to make the next
contact
üSee if prospect fits source’s description
February 2011 5wh Marketing 52
53. CONTACTING YOUR
PROSPECT
ØMeet the Face
üMeet the prospect within 72 hours of
getting the green light from source
üIf your source can be present, so much
the better for s/he will do the
introductions
üIf not present, aptly structure your
opening by mentioning the source
February 2011 5wh Marketing 53
54. CONTACTING YOUR
PROSPECT
ØMeet the Face
üProspect may decide to do business with
you at the onset
üLet the prospect lead you onto when/how
s/he will be ready to do business. Listen
for hints to that effect
üRemember to talk about his/her interests,
not yours
üSchedule the next meet
February 2011 5wh Marketing 54
55. CONTACTING YOUR
PROSPECT
ØFollow-up
üSend a note of thanks a.s.a.p., not
later than 48 hours
üDon’t sell: Prospect will buy when
the time comes; s/he knows your
products/services
üNurture the relationship….GAINS,
VCP!
February 2011 5wh Marketing 55
56. RECOGNIZING & REWARDING
YOUR SOURCES
v Keep your referral source apprised
throughout
v Share what you plan to do next
v Promise to keep him/her informed
and keep him/her informed
v Nurturing a relationship is ongoing
February 2011 5wh Marketing 56
57. RECOGNIZING & REWARDING
YOUR SOURCES
Questions to consider before creating
a reward programme :
ØWhen to reward the source
ØWhat kind of reward
ØHow much
ØWhat kind
ØWhen/how reward will be presented
ØHow to keep track of the reward activity
February 2011 5wh Marketing 57
58. RECOGNIZING & REWARDING
YOUR SOURCES
vDifferentpeople may require different
rewarding ways
vDistinguish between tangible (e.g.
cash) and intangible (e.g. a public
“thank you”) rewards
vBe consistent; promise what you do
and do what you promise
vBudget for the programme
February 2011 5wh Marketing 58
59. BUDGETING AND ALLOCATING
YOUR TIME
You want to avoid:
vSpending too much or too little on a
task
vLoosing control of your time
vChasing wild geese
vAbandoning your efforts too soon
February 2011 5wh Marketing 59
60. BUDGETING AND ALLOCATING
YOUR TIME
Seven Steps to Budgeting Time:
1. Estimate total time available
2. Estimate total time available per
period
3. Allocate time per source
4. Determine the number of contacts
per source
February 2011 5wh Marketing 60
61. BUDGETING AND ALLOCATING
YOUR TIME
Seven Steps to Budgeting Time:
5. Determine the length of each
contact
6. Determine the time per activity
7. Set up your calendar
February 2011 5wh Marketing 61
62. BUDGETING AND ALLOCATING
YOUR COSTS
Six Steps to Budgeting Costs:
1. Estimate total funds available
2. Estimate total funds available per
period
3. Determine funding amount per
source
February 2011 5wh Marketing 62
63. BUDGETING AND ALLOCATING
YOUR COSTS
Six Steps to Budgeting Costs:
4. Determine the number of contacts per
source
5. Determine the funding of each contact
6. Determine the funding per activity or
expense category, e.g. lunches, travel, phone,
gifts, research, printing, etc.
February 2011 5wh Marketing 63
64. FORECASTING SALES FROM
REFERRALS
Forecasting should be based on:
v Expected number of referrals
v Expected dollar value of the expectation
v Percentage of referral to whole business
v Number of sources required to meet the
expectations
Analyze these four factors over your reference
period, i.e. a recent period, e.g. a year
February 2011 5wh Marketing 64
65. TRACKING AND EVALUATING
RESULTS
You have to use your sources and resources
wisely. you need to know:
v Whether and how well your RMC is working
v How you can improve future results
v How much your money and time investments
are earning
Besides money and time, you also need to track
activities, by source.
February 2011 5wh Marketing 65
66. IN SUMMARY
v Use referral prospecting to build your business
v Have a referral mindset
v Turn your happy clients into referral sources
v Your clients benefit when you ask for referrals. It’s in
their interest for you to reach your vision of success.
Let your clients know that you value their help.
v Practice the golden rule of referral giving: To get great
referrals give great referrals
v It’s all about trust: Credibility is essential.
February 2011 5wh Marketing 66
67. Thank You!
To know more about our company
and our products & services
and to start a relationship, here
is Caleb:-
Cell:
+263 712 620 287
+263 772 466 540
Email:
caleb@zol.co.zw
Other:
P.O. Box 1361 Harare
February 2011 5wh Marketing 67