Referral marketing, just like any other type of marketing, works against you if your product or service is not up to snuff. Having a good product is necessary (but certainly not sufficient) for referral marketing to work.

On the other hand, there is a danger of falling into the “best product” trap. Far too many entrepreneurs spend all their energy on perfecting the product and not enough on marketing it. It’s not necessary for the product to be “the best”. Your product just has to be “good enough to do the job”.

Referral Marketing Tip #2: Make Every Customer Feel Special

Now, isn’t this a novel idea, to not simply ask for referrals but actually deserve them?

Many referral marketing seminars, books, and courses teach us to always ask for referrals. This idea can be taken too far. Like that birthday card from a realtor that comes full of nice wishes, two of his business cards included to give to your friends, and a P.S. in the end suggesting that he is “never too busy for your referrals”.

Well, how would you feel getting a card like this? Right, I’d want to wash my hands too. There is a time and place to ask for referrals as there is a time and place not to.

How about sending a card to them and making it entirely about them? A card that says “Happy Birthday”, “Happy Thanksgiving”, “Thank you”, “I appreciate you”, etc? The type of card that doesn’t scream, “Gimme, gimme gimme!” The kind they could only get from the person who really, truly cares about them — you!

When you stop worrying about referral gimmicks and start caring about your customers, is when you open referral floodgates. When you are no longer forcing referrals, you are allowing them to happen.

Referral Marketing Tip #3: Give Your Customers Something To Talk About

You start getting more referrals when you give your customers something to talk about. This can be a special event, a specific feature of the product, or simply something out of the ordinary you did for them.

For example, you can link your business to a charitable cause or a community campaign to save a local landmark. When the conversation at the office water cooler turns to the subject of the campaign, with your happy customer present, they will be only too eager to give you a plug.

When it comes to product features, the recent release of the new iPhone comes to mind featuring the messenger app. Given the blackout of the Blackberry network a few weeks ago, everyone wants to talk about the new iPhone. Several of my friends defeced from the Blackberry camp as a result.

And finally, here’s a story of how I made it easy for my accountant Chris to talk about my marketing services. One day, he received a greeting card in the mail from me that had a picture of our Prime Minister “saying” how he was concerned about the Federal Budget since Chris’ clients were paying so little tax. This card, taped to Chris’ desk for every visitor to see, invariably gets a chuckle. The next thing you know, my name is being kicked around.

Alas, nothing can be further from the truth.

Every successful business that I have studied and that generates a lot of referrals, has a systematic, well-thought-out referral process in place. Referrals don’t “just happen”! No matter how great a job you do as a business or a professional, it is never enough to attract a sufficient number of quality referrals.

The sad truth is, people take good service and good experience for granted. They are much more likely to tell their friends about their bad experience than good experience.

There is a psychological reason for that: Most of us humans are preoccupied with negative thoughts. We all like to vent. And given a chance, we do.

Which is confirmed by a customer behavior research company called TARP, based in Arlington, Virginia. Here’s what TARP research has to say on this:

• A happy customer may share their experience with just a few friends;
• These friends will not remember much and will not share that information with anyone at all.

And that’s it. The message stops there (unless you use deliberately designed referral tools to carry it down the channel) and you get no new business.

Now let’s imagine you messed up. Here’s what’s going to happen to you, according to TARP:

• A disgruntled customer will share their bad experience with the average of 12 other people;
• Each of those 12 people will in turn mention it to 6 others

Let’s do the math: We are talking about (1 person who has had bad experience) + (12 people that person has talked to) + (12 groups * 6 people they have contacted) = 85 people will no longer think very highly of your business or service just because of a little mess-up!

Bad news certainly travels fast.

Here’s what this all means to you and your business:

• Doing a good job is still important (as they say, “you can’t brand crap”). However, it’s not enough to attract a reliable stream of referrals.
• To get more referrals, you need to build and implement a referral system that you can control and rely on (the type of the system we teach at the Small Business Referral Seminar).
• When you make a mistake, you need to go out of your way to admit your mistake, apologize, and make it right again for customer. For example, you can send a nice “apology” greeting card to them, possibly with a small gift. Chances are, this person will become one of the most loyal of your customers (sometimes they will become a bigger supporter of your business than those customers who have never seen you make a mistake).

So doing a good job is important to avoid the negative word of mouth. However, doing a good job is never enough to get all the referrals that you need and that you can handle. That task is only accomplished by creating a systematic referral process.

Or at least, referrals are not very likely to happen just because you have sent out a bunch of holiday cards.

Here’s why: Everybody sends out Christmas cards, or “Season’s Greetings” cards, around this time of the year. Your card, when received by your client, will have to compete for their attention with so many other cards from other people.

Does this mean you shouldn’t be sending out holiday cards?

Not at all. You should use any and every occasion to “ping” your network, and the month of December is ripe with oppotunities.

However, if you want to see some really amazing results from holiday cards, pick a different holiday! How about sending a Thanksgiving greeting card? Or an April Fools card? Or some other bizzar holiday cards, be it Mardi Gras or The Groundhog Day?

Be inventive. Take a closer look at the calendar and use all the weird and fun holidays as a reason to contact your network and see your referrals grow as a result.