Marketing is more art than science and, as such, provides marketers a lot of latitude in what they can do. In all cases, however, what’s important is focusing resources on those things that will effectively support the sales process and help create greater corporate success.

Traditional marketing approaches are, well, obvious. Many non-traditional approaches have been tried and discarded for good reason. There are, however, some innovative approaches that failed to win popularity simply because they were either too new or too complex for successful implementation. One of these too-complicated approaches warrants another look.

Because people know that every form of corporate marketing is biased, they are naturally reluctant to readily accept corporate marketing messages. It is well-documented that product claims achieve a higher level of credibility when they are delivered not as “pitches,” but rather as endorsements from trusted corporate spokespeople. Celebrity endorsements have proven an effective—although extremely costly—approach for companies of all types. The next challenge is to find a better, readily accessible and much more cost-effective way to secure that same kind of endorsement credibility.

We believe that satisfied clients can provide powerful third-party endorsement for a financial services organization. The key to launching this potent “salesforce” is a focused referral program. Properly schooled and incented, satisfied clients can positively influence prospects and produce significant incremental business. However, implementing a truly effective referral program can be a complex and rather involved process.

What Makes A Successful Referral Program

The Ability to Influence Decision-Making. The goal of a referral program is to accelerate a prospect’s decision-making process. Research has proven that the product with the better decision support system—rather than the better product—very often enjoys the competitive advantage. When prospects have the necessary information, they can shorten the sales cycle by making decisions more rapidly and with more confidence.

Therefore, the first step in the development of an effective referral program is focused market research to gain understanding of the decision-making process. The goal of the research initiative is to

  • map the series of critical steps in the decision cycle that motivates a prospect to choose a financial product or service
  • identify the targeted market’s values and priorities
  • determine the messages and brand attributes that will appeal to the target market.

Tools and Materials that Motivate the Referral Network. It is important to equip endorsers with material—whether based on word of mouth and/or word of mouse—that is designed specifically to facilitate communications with their colleagues. Successful programs provide easy-to-use referral tools that

  • provide the information prospects need to make an informed decision
  • leverage the relationship between referrers and prospects
  • enable referrers to transfer to prospects a feeling of their positive experiences with the firm.

Finding the Right Voice. Successful marketing initiatives adapt their messages to reflect the unique characteristics of the chosen communications vehicle. For example:

  • Salespeople interactively provide their most compelling case to convince and close their prospects
  • Advertising focuses on reaching a large number of prospects and communicating important benefits
  • Public relations emphasizes the most newsworthy aspects that will attract the attention of the target audience
  • A referral program needs a “story” to make its messaging effective.

The development of an effective referral “story” begins with an analysis of the decision-making research. Where do prospects generally encounter obstacles in the decision-making process? What arguments will successfully overcome marketplace objections?

The resulting story must contain compelling claims, credible promises and benefits that resonate with the target markets. It must also engage endorsers and be short, interesting, convincing and easy to communicate. Above all, since—as with every other aspect of good marketing—success follows truth, an effective story must appropriately manage expectations.

The Bottom Line

A well structured referral program can help an organization cut through marketplace clutter and accelerate prospects’ decision-making. By turning satisfied clients into endorsers, a company can create a genuine “salesforce”—beyond a size ever imagined. Given the proper time and attention, a referral program can not only deliver spectacular results, but also become a responsible and lasting means of increasing sales.