ICS Magazine

Getting Serious About Referral Marketing

December 23, 2009

It is one thing to say it is time to get serious about referral marketing and another to actually do it, and do it consistently. Making a decision is a good thing, but is by no means the whole story.

I am reminded of the story of six frogs sitting on lily pads in a pond. One decided to jump off. How many were still on the lily pads?

The answer is six. The one frog had decided to jump off the lily pad, but he was still sitting there, not yet having turned his decision into action.

I like to think the strategy for effective marketing can be summed up in five steps:
  1. Predict
  2. Plan
  3. Produce
  4. Profit
  5. Play


Determine which market is going to be the most lucrative for you. While they may be similar, geographic locations and service areas differ. Determine what market is going to bring you the best return. Is it present clients? Realtors? Carpet retailers? Interior designers? Plumbers? Condo associations? Dry cleaners? Homeowners associations? Property managers? Tile stores? There may well be other groups you will want to consider.


Now that a market has been selected, determine how that market is going to make the phone ring: Who, what, when, where and how.

Who is going to do the marketing? What will be the sales pitch and what material will be taken for the presentation? When does the marketing begin, and what goals will be established for the marketing? Where are the businesses that will be approached and who will make the route books for the visits? How is this going to be done while still maintaining the other operations of the company?

Make a short description of every market, and then plan as if someone was starting to do the sales work this coming Monday. When the salesperson arrived, what would you have them do? This person may be you or someone you’ve hired, but the point is a detailed plan must be made, written down and implemented.


Plans and strategies are important, but nothing works unless the actual footwork is accomplished. Accountability is essential here, so the salesperson must report on a daily and weekly basis to someone. No matter if that person is the owner or someone else, a detailed account of the number of visits and the results of those visits must be reviewed by someone. That someone could be a coach, a friend or even the owner himself utilizing a goal/ planning sheet.


The result of proper preparation and implementation is profitability. If the preceding strategies are carried out, a rich harvest of profits are very likely to follow. The biggest obstacles to this happening? Lack of persistence and inconsistency.

Many a company has grandiose ideas about referral marketing, but they lack the persistence and consistency to make it happen. Successful accounts that my company has nurtured over the years have been the result of persistent visits followed by consistent marketing.

Referral marketing is all about relationships, and your marketing person must be a good listener and able to take rejection. Once a referral source has been established, consistent visits (involving food, somehow and someway) are essential to maintaining a great relationship. Probably the No. 1 reason why referral marketing does not work for some companies is their refusal to continue to visit and build relationships over time.

Referral marketing is quite profitable because large advertising costs are not necessary and, when a company relies on referral marketing, they can charge higher prices because the client really wants that company to do the job. The client has heard good things about them, not just what they read in an ad.

In a down economy, referral marketing thrives because people are more selective with their spending and they want to use someone they can trust.


Referral marketing works and, once a successful program has been implemented, the owner can then start living his or her dreams. Notice, though, that the play comes at the end of this concept and not at the beginning. The old saying is so true: play now, pay later or pay now, play later.

Life is all about choices, and one must determine which pain they would like to experience: the pain of never seeing their company grow and knowing that they really should start marketing to referral sources or the pain of implementing a program and getting out there and visiting the referral sources on a consistent basis.

There is pain involved with either decision and it is up to the owner to choose one over the other. The choice is clear: short-term or long-term pain. Which will it be?

Make your decision and jump off the lily pad.