Education is the key to effective referral marketing.

By John Jantsch

One of the few complaints I hear from small business owners when it comes to generating business or leads by way of referral is that too many of the referrals they are offered aren’t a fit for the business. The referrals are either unqualified, don’t need the firm’s offerings, can’t afford the product or just don’t fit the typical profile of an ideal client for the receiving firm.

If this is your referral reality, then you know that chasing leads that don’t fit your target client can be a grand waste of everyone’s time and energy. The primary reason for this problem: Most small business owners and independent professionals don’t take the time to educate their referral sources.

The solution is really quite simple. I’ve created a tool I call the Perfect Introduction, as part of my Referral Flood program. The Perfect Introduction is a document (although it can take many forms including a web page) that helps educate your referral sources and contains answers to the following questions:

• How would I spot your ideal client?
  Describe, in great detail, the type of clients you work best with. This step will help assure that you get highly qualified leads and make it easier for your lead source to think of prospects that fit a narrow description.
• What I would say to best position your business?
  Give your referral source the exact words you would like them to use when introducing your products and services to prospective referrals. Give them a simple, memorable way to explain the benefits you have to offer.
• How do you add value tomy relationship with a referred lead?
  This is amulti-answer question. Show your prospective referral source what you do to make them look good and outline any offer you might have cooked up to reward and motivate your referral sources. By the way, money isn’t always the best referral motivator.
• What you do with the leads you receive by way of referral?
  Outline the exact steps you take when you receive a name or introduction. This step allows the referral source to get comfortable with your marketing process. Everyone has some fear that the referred party may abuse the relationship by hard selling or calling every night at dinner time.

Now that you have your Perfect Introduction document in hand you can go out there and confidently let the world know that you are someone they can feel great about referring.

Another very powerful aspect of this tool is that often, even if you don’t realize it, you are in competition with others who are seeking referrals. Service professionals seeking referrals, for instance, heavily target CPAs. With your referral process outlined in a very professional manner, you will stand out in the referral competition for some of the best potential referral sources.

John Jantsch is a veteran marketing coach, award-winning blogger and author of Duct Tape Marketing: The World’s Most Practical Small BusinessMarketing Guide. He is the creator of the Duct Tape Marketing small business marketing system. You can find more information by visiting www.ducttapemarketing.com.