Do you want to SERIOUSLY grow your business, income and referrals in 2011? Then study this referral marketing photo. I mention it a lot.

Today, people are busier than ever, with more points of communication in our lifetime. Look at what the average business person might come in contact with during their day:

• Google, Yahoo, Bing, Facebook, Android, iPhone, Outlook, Word, Excel, Project, Photoshop, Dreamweaver, Frontpage, Blackberry, Sirius, FM radio, AM radio, DirecTV, Comcast, TimeWarner, etc. etc.

You kiddin’ me?

How in the world do you think YOUR marketing is ever going to influence them to want to SEEK you out, and do business with you? How do you break through?

There are three things I recommend.

Now, I’m not going to harp on old-school conventional marketing and advertising. It serves a need. But for most people like you, the question you’re really asking as you start another year, is:

• How do I cut what I’ve spent on my marketing, and re-use it so more people can be referred to me? After all, referrals are always the best clients for me since they’re already sold and ready to do business.

As we enter a new year, I’d like to suggest the following:

1. Shift your marketing spend dramatically from last year. By dramatically, I mean radically. Don’t flame me. I realize you might have to do it slowly so you don’t take a sales hit. But you need to have a RADICAL epiphany.

Go look at this referral marketing photo again.

For example, let’s say your marketing spend typically looks something like this:

• 80% – traditional marketing (Mailers, Yellow Pages, PPC, etc.)
• 20% – referral based marketing

I suggest you turn that upside down (like the photo shows you) and MOVE to this spend-based equation:

• 80% – referral based marketing
• 20% – traditional marketing

Ask: What would my income and client roster look like, if I was spending 80% of my marketing dollars on referral-generating activities.

2. If you’re not spending ANY money on referral marketing, you’re wasting a ton of your time and money.

And from the above, watch how powerful the 80% break down would become, if you followed, say this model:

• 40% – spend on current customers and clients
• 40% – spend on referral sources (COI – centers of influence, SA – Strategic Alliances)

Could you imagine spending 1/3 of all marketing dollars you have, on your current clients?

Imagine what impact that would have on their word-of-mouth about you. Imagine what impact that would have on your INCOME!

3. There are tons of ideas that will help you accomplish #2, very easily. I don’t have time to go into a slew of them here, but how about using referral letter drip campaigns, client/customer appreciation events (Birthday parties, Chef’s Tables, Golf Outings, Museum Lunch-n-Learn), or private seminars, just to name a few?

Start thinking new… as you start a new year. Otherwise your income and earnings will be exactly the same as last year.

Fact: Referrals and referral marketing are the fastest, easiest way for you to get to the next level with your business and income, and build an army of loyal clients and customers.

Nothing else comes close.

Period.

What does G.L.U.E. have to do with getting more referrals from clients and introductions.

Click below to hear this short audio lesson today, as I explain my referral acronym…

G.L.U.E.®

This advice will help you understand the process of generating more qualified, affluent referrals and introductions.

Do referrals come when you network? Or does your ability to network help you increase your referrals.

Both, obviously.

It amazes me, though, how most professionals see each as a separate marketing task. I heard it said that if you want to learn how to ask for more referrals, just become a better networker. That’s true to an extent.

At the heart of people who get a TON of referrals and referred-business–consistently-you’ll find this one common trait.

That trait is someone who networks well.

Whether it be in building their own close social circles, or being out in the community, chances are their business is thriving because of the networking they’ve invested in.

Here’s a great article by Michael Taylor that gives you further takeaway.

—————————————————–

“Professional Networking is the Key to Business Success”
by Michael Taylor

Networking itself is the term given to the building of contacts in a professional manner which will ultimately help you have the support group which you need for success. Networking can refer to cultivating friendships with professionals in many different fields, giving you the best chance for finding additional contacts or sources for business transactions.

It can also refer to the way in which you go out and find potential clients. Ultimately, it’s a way for you to reach out and start making a difference in the impression that you make on the way that you do business. A B2B directory can be a great first step in helping you to make that impression.

You will find that, after you have joined a B2B directory, that you’ll have a wealth of knowledge immediately made available to you. One of these directories has a wide array of professionals listed within, helping you to find someone who is going to give you the resources that you need when you need them the most.

If you are looking for a professional in a certain area of business, you can look in the directory to find someone who fulfills those conditions. This will help you develop your professional networking skills, giving you the best opportunity for making long lasting contacts who you can develop a business relationship with.

Professional networking is one area of business which cannot be given enough attention. People want to do business with individuals who they feel they can trust, which is why you will want to put plenty of time into the manner that you craft relationships with those individuals.

When you are able to join a B2B directory and offer your services to people all around the world, you’ll find that it becomes easier for you to get the assistance which you need in return.

The more people who you meet through professional networking, the more valuable you will become in a business setting. Considering that so much success of business is related to knowing the right people, when you have the necessary contacts, you will be able to make calls when they are needed the most.

That will help you to push business deals through and give you more of a likelihood of completing all of your goals on time and on budget. A B2B directory could ultimately give you all of these contacts in one simple place.

Professional networking will require you to more than simply join a B2B directory, however.

Once you are a member of the directory, you are going to need to take the time to build relationships with the members inside of the directory who you feel will give you the better chance of professional success. This can take time, so you will always want to be working on the way in which you cultivate your professional relationships. Time will need to be spent on the personal interactions that you have with these individuals so that, in the end, you are able to turn to them when you need something.

Figuring out how to use a B2B directory can benefit you greatly as you get the necessary edge with professional networking. Turn to Madison Whos Who for the tools you need toward promoting yourself in a lasting manner.

This includes getting referrals from strategic alliances (ex: CPAs, Attorneys, Investment Advisors, Realtors, Insurance Agents, Mtg. Brokers, etc.)

If your plan this year includes increasing your referral flow, don’t overlook the advice today.

[This article is a guest article, contributed by guest contributor Darek Daniel]

“The Words a Picture Cannot Say to Your Customers”

We’ve all heard of the saying that a picture is worth a 1,000 words, but business owners beware. Don’t take this saying literally when it comes to your advertising. Too many times business owners make the mistake of trying to be too clever or creative with their marketing pieces that their message becomes muddled or unclear to their target market.

Although you probably don’t want to use 1,000 words in your advertising, words are an important piece to your marketing and should complement your graphics and help get the message across. There’s nothing worse than spending the time and money on an advertising piece only to find in the end that no one gets it. Sure it may look great, but is it effective? Remember, there are several important messages your clients should get when they read your advertising piece.

1.  
   1. Who are you? You spent all that time on your advertising, but can your client immediately identify what your company name is? If your logo and company name aren’t immediately apparent in the design, than you have no branding value to your marketing piece and it’s time to rethink your creative.
   2. What do you do? I can’t tell you how many times this happens. Business owners get so involved in the aesthetics and the cool factor of the design that they forget the entire purpose of the piece. If you can’t tell from looking at your design exactly what your company does, why bother spending the money?!
   3. What do you want your clients to do? Ok, so you’ve sent them this great advertising piece. It has your company name on it, and it clearly states what your company does. Great. Now what? What should your clients do about it? Should they call you? Should they visit your website? Set the expectations for what you want to happen by including what’s called a call to action. This is marketing speak for tell your clients exactly what you want them to do. Literally use the words, “Call 555-5555 now for an appointment,” or “Visit our website today at www.prova.fm.” Remember to keep it simple!
   4. Why should your clients follow through? Now that you’ve told your clients what you want them to do, give them a reason to do it. Offer them an incentive to pick up the phone and call your business. Whether it’s 10 percent off or buy one get one free, it doesn’t matter as long as it’s an attractive enough offer to entice people to use your products or services.

Offering incentives also gives you another great benefit besides bringing in new customers. Incentives allow you to track your marketing efforts. Not following me? If you offer a 20 percent discount only to people who have received a certain advertising piece, then when they call asking about it, you will know where they found your number and ultimately you can track the effectiveness of your marketing campaigns. Try to make sure each marketing effort you employ gets a different incentive. This will make it possible to track your efforts.

Creating great advertising pieces that draw your clients’ attention with attractive graphic design is just the beginning of a successful marketing campaign. By keeping these rules in mind when you create your pieces, you will ensure that your advertising efforts will not be in vain.

Darek Daniel is a marketing writer and branding professional for Firefly Writing, & offers weekly advertising help for small businesses at Prova.fm. For more information on how your small business can benefit from the design services mentioned in this article, you can visit http://www.prova.fm. For more resources on this topic, visit our blog at http://advertisinghelp.wordpress.com/.

They’ll quickly tell you whether you will enjoy great success with your referral marketing efforts or… get the same ol’ results in your business that you’ve been experiencing.

The first diagram below is based on the  “80/20 Rule,” called the Pareto Principle.

Basically that universal Rule states that 80 percent of your effects (ex: results in your business) come from 20 percent of your causes (ex: your efforts).

Or, said another way: 80 percent of your income comes from your 20 percent of your clients… or… 80 percent of your success comes from 20 percent of your marketing activities… and, so on.

In my 20 years of experience, the same can be said of building your business by referrals and word-of-mouth.

But let’s relate this to something else, shall we?

THE DOLLARS YOU SPEND

For example, the typical person running their own marketing budget is likely gonna spend 80 percent of their dollars on traditional marketing (advertising, branding, online marketing, public relations, direct mail, etc.)

The remaining 20%, they toss at referral marketing (if they’re lucky).

Note: I’m being over generous when I say 20 percent is spent on referral marketing. Most professionals spend way less than 20 percent of their marketing bucks on referral marketing (if they spend any money at all.)

So visually speaking, our marketing-spend looks like this:

You probably can relate to that diagram in your business, agreed?

Lessons: a) Start viewing your referral marketing activities (the red area above) as a legitimate marketing line item. b) Make a commitment to expand the red area. c) Begin allocating more of your marketing budget towards referral marketing activities.

But before you do that, let’s flip the diagram upside down to see if this makes most business sense for you now, shall we? Let’s re-focus on the green area:

So what just happened here?

First of all, you’ve re-allocated 80 percent of every dollar you spend going foward on the highest possible payback activity, giving you the fastest return on your investment of cash and time: Spending your dollars on your existing clients and your colleagues.

This creates freedom and peace of mind in your life. And it makes things in your business much more enjoyable for you.

I won’t go in to all the reasons for this. I’m sure you understand it already (established credibility, known relationships, proven work, minimal risk, etc.)

Secondly, you can reasonably project an average ROI scenario. And one that is larger, too.

Right now, you pretty much know that for each client or colleague you engage, you’ll have a certain closing ratio and earned-revenue scenario. Maybe it’s 30-50 percent, let’s say. 

You can say with certainty that those ROIs are a much higher percentage because you are marketing to established relationships rather than complete strangers.

Said another way: Would you rather enjoy a 3% success rate on your client acquisition efforts (direct mail/newspaper ads), or a 30, 50, 70, or 90 percent success rate (introductions and referrals).

But something else even more powerful is going on here.

Let’s look at the diagram again now:

What if you took 80 percent of those new referral marketing dollars you are using for acquisition, and split them equally (for arguments sake) into two separate line items (buckets):

Spend 40 percent of your dollars on your current clients; spend 40 percent on your Centers of Influences (COIs) & Strategic Alliances (SAs)?

What could that yield you in terms of ROI? 

Have you ever thought seriously about this?

Have you ever run some numbers that would tell you how much more money you’d be making?

Here’s a free tool that can do just that for you: The Referral Multiplier Tool.

I’ll bet the ROI is a lot more than throwing away 80 percent of your money on the same old traditional marketing and advertising that you’ve been doing.

“So what types of referral marketing activities should I do with 80 percent of my budget reallocated to referral marketing activities?”

That’s a topic for another time. But I will say that you’re only limited by your imagination and some basic organization skills.

Here’s just a few that I threw together quickly:

40% Referral Spend – Clients

1. Appreciation Dinners
2. Private Wine-Tasting Event
3. Museum Luncheon Tours
4. Orchestra Recital
5. Appreciation Drawing Twice Yearly – Caribbean Cruises, Broadway Tickets, etc.
6. Spa Day/Tennis Day/Golf Pro Day

40% Referral Spend – Centers of Influence (COI) & SAs (Strategic Alliances)

1. Incentives for Referrals (referral rewards)
2. Spa Day/Tennis Day/Golf Pro Day
3. Joint Event – Speaking, Radio, Television
4. Chef’s Table and Joint Networking Mixer
5. Tour of Facilities and Catered Dinner

Obviously such a radical shift in your marketing spend–from 80 percent of your budget going toward traditional marketing/advertising… cut down to 20 percent–is a serious move. And you have to balance the impact on your cash-flow and operations. I respect that.

You might even have to take a step back for the next 3 to 6 months.

But serious times often call for serious measures. And at a minimum, it will cause you to consider some serious thinking… especially if you want to get to the next level in your business.

As they say, keep doing what you’ve always done, and you’ll always get the same results.

So start thinking 40/40/20, not 80/20!

Again, it might not be something you are able to do immediately; but over the course of the next 6 to 12 to 18 months, it may be quite doable to move yourself and your business in that direction.

The choice is yours.

I say go for it.

Nice photo, right? Actually, the NY Post is something else. A case study in good copywriting, for sure. (Best headlines besides the National Enquirer!)

All the chatter about Wall Street sure has a lot of people freaked out… including, probably your clients. The media sure isn’t helping either, rattling everyone’s cages with every form of negativity.

For many of you, I feel your pain. So I went ahead a put together a professional, calming and reassuring sample letter to use with clients, which can also encourage client referrals.

Here’s where you can download this sample letter. (MS Word doc)

The goal of this letter is not to generate referrals; rather, it’s ongoing communication. And good communication always fosters experiences – which is what we, as social creatures, share with others during the course of our week and month. Communicating now isn’t always easy to do, especially when the economy and market conditions suck.

So this letter may help you take the first step, before your competitors do.

Remember, as with any personal communication, edit it and adapt it to your own style and make sure it passes your own compliance and ethical standards.