This is part one of a two part post – today is Design the System – next is Operate the System.

For most, referrals happen accidentally as a result of doing good work or being in the right place at the right time. What if those valuable referrals could happen intentionally, as a result of doing work and putting yourself in the right place, with the right source, always at the right time.

Marketing is the most important system in any business and referral generation is simply one component of the lead generation cog, and as such, needs its own documented system as well.

I could write an entire book on this subject, oh wait, I am writing an entire book on this subject, and for my money, here are the referral generation system parts that must go into your design.

• Become more referable – before you pass go you must analyze every way that your business interacts with customers and prospects – marketing related or not – and inject positive, brand supporting elements into the each interaction – many referrals are lost because shipping or finance roughed up the relationship.
• Target your sources – 1) look at your customers under a microscope – what’s the profile of a customer that’s already referring business? Find that out and focus most of your attention on that kind of customer by making it easier for them to refer. 2) who else has your ideal customer as a target? Strategic partners should be a major focus of attention. This is the place where you need to look long and hard at your ability to make referrals to others – give and you shall receive!* In a recent survey I conducted on referrals respondents felt that less than 30% of their referrals came from strategic partners – I think that should be more like 60%
• Educate your sources – ever get a bad referral? It was probably your fault. We can’t or shouldn’t ask for referrals until we tell our referral sources in great detail – how they would spot our ideal customers, the kinds of things our ideal customer might say to signal them as a lead, and the exact way/words to use when telling a prospect about us.
• Motivate your sources – money for referrals is usually a crummy motivation, but a creative, on message kind of offer that turns referring business to you into a game is a great way to motivate your referral sources and shine a light on the subject of referrals for all. Of course, saying thank you never hurts either.
• Follow-up with all – a referred lead is different, you’ve got to be prepared to follow-up in a different manner – in all likelihood the sales cycle will be different as well, plan on it. Follow-up also includes your referral sources. Build feedback loops so that your referral sources get to know how much good that are doing by referring your business. Create key indicators of referral success and make them part of your marketing measurement dashboard.

Each of these parts needs to be thought out, documented and baked into your day to day marketing efforts. Plan to change, expand and moderate your system parts as you take them out into the real world.

Now that you have a system, you’re almost half way there – a system design is an academic exercise until you put the process into action – tomorrow I’ll delve into operation your referral generation system.