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The best customers for any company come through word of mouth.

Imagine owning a bakery, and a customer falls in love with your products.

This enthusiastic customer, impressed by your offerings, shares the experience with friends, family, and colleagues, recommending them to come and try your pastries.

Each person who arrives at your shop through this recommendation is considered a “Referral.”

Referrals are individuals directed to your business through the positive word of mouth from satisfied customers.

It’s a method of acquiring new customers based on the trust and positive reputation your company has built over time.

In the business context, Referrals can be incredibly valuable because they rely on the positive experiences of those who have already tried your products or services and can therefore more easily convince others to become customers.

It is possible to double, triple, or even quadruple a company’s revenue and size simply through Referrals.

Although it is very challenging, and only a few succeed, a company could work to initially acquire some customers and then grow and thrive solely through their Referrals.

The question is: how can a company get Referrals?

The first step is to satisfy customers, keep promises, and work honestly.

Customers must be more than satisfied with the service provided by a company to recommend it to others.

When I say “more than happy,” I mean a complete and positive experience, including clean environments, small gifts, and, most importantly, happy, friendly, and non-invasive employees (which I will explain further in this lesson).

Furthermore – and this is a big, huge issue – Referrals expect to be helped and served in the same impeccable manner described to them by the person who recommended you.

If I have a friend who speaks highly of a business, almost idolizing it, I expect to receive the same 5-star service that was reserved for my friend.

So you need to ALWAYS work honestly and ALWAYS to the best of your abilities.

The second step is to declare how important Referrals are to us.

The company must demonstrate it with concrete actions and encourage customers to speak positively about the company to their acquaintances.

For example, printing and distributing newsletters and video transcripts to customers can be an effective way to encourage them to share information with their acquaintances.

The process is simple:

  • 1. Your customers must impress their acquaintances with their enthusiasm for the business.
  • 2. Customers should then have access to printed informational materials about our company.
  • 3. Finally, Referrals will decide autonomously whether to contact the company.

“Why print materials? Why can’t I just direct Referrals to the company’s blog articles and YouTube videos?”

Because when one person tells another, “Hey, watch this entrepreneur’s videos on YouTube when you have time,” the response is often, “Yes, sure, I’ll do it later,” but then they always forget to do it.

Instead of relying solely on digital media, providing customers with a printed newsletter ensures they won’t forget your company.

Another common question is, “Why can’t I contact Referrals directly via email or phone and have to wait for them to do it?”

Some entrepreneurs request Referrals and then contact them directly via email or phone.

This is not correct because Referrals should initiate the conversation with the company.

Reaching out to Referrals directly, without giving them time to get to know you or without the approval of their acquaintances, makes us resemble annoying telemarketing centers that call at inconvenient times with unwanted services.

Moreover, many people today have call blocking for unknown numbers on their cell phones (๐Ÿ™‹โ€โ™‚๏ธ “Here I’m!”) so even if you call hundreds of times, the person may not see the call.

Printed materials, on the other hand, remain on the Referrals’ desks and furniture, making it difficult for them to forget your company or ignore its existence.

Therefore, it’s better to avoid directly contacting Referrals and let customers do the work of distributing printed materials.

Last but not least, create an incentive plan to show gratitude to every person who brings Referrals to you by offering bonuses, discounts, and promotions.

This will incentivize both the Referral and your customer.

Furthermore, if executed correctly, this Referral marketing system can generate an endless stream of Referrals without additional marketing costs, except for the cost of printing newsletters.

Once a Referral becomes a customer by purchasing your product or service, you just need to repeat the process with this Referral and ask them (giving them multiple copies of your newsletter) to spread the word among their acquaintances.

Why Can’t You Get Referrals?

I’m sure you’ve already tried asking your clients for referrals, but you’ve received very few or none at all.

Don’t worry, it’s normal.

No one is born knowing how to do this.

Many entrepreneurs don’t even ask for referrals, so at least you’ve tried.

But now, I’m here to help you, and below we will discuss the three most common reasons why our clients don’t recommend us to their friends and family.

  • 1. Your clients may not know how important referrals are to you.

Many businesses fail to provide their clients with the necessary resources to refer us to friends and acquaintances, such as printed books and newsletters.

From now on, when your clients purchase your product or service, provide them with copies of printed books or newsletters to share with their friends, family, and acquaintances.

Clearly explain your referral process: what the client should say when talking about you, how to say it, and mention your incentive plan for those who bring in new referrals.

As mentioned earlier, you must be clear with your clients that referrals are important to you.

But you need to communicate this by offering your clients several copies of your printed newsletter; otherwise, people forget everything.

  • 2. Your customer service might be lacking.

This is a vital concept that, unfortunately, many companies around the world overlook (we Italians are world leaders in offering poor and embarrassing customer services).

I often cite Disney in this blog because I believe it is the only company in the world that pays meticulous attention to detail.

Every night in Disney parks, poles are repainted so that the next day’s customers see the park as new.

The poles in the park don’t directly bring in money for Disney, but they offer people the prospect of always seeing something new, and people love novelty.

It’s the details that make the difference.

The question is: how do you “repaint the poles in your park” in your business?

Or, even better, how do you manage the details?

Let me give you the example of Dustin Burleson, a renowned orthodontist.

Who likes going to the dentist?

No one, not even the dentists themselves.

So, how did he differentiate his business to get his clients to speak highly of him?

He made his waiting rooms resemble Starbucks, serving coffee and sweets, so that patients could feel comfortable.

It has been scientifically proven that tense and stressed people can find relief in sugar, which acts on the central nervous system by increasing the release of endorphins, endogenous substances with analgesic and calming effects.

In this way, people can keep their fear under control, especially when they have to sit in front of all those tools, feeling something very similar to a heart attack.

I highly recommend reading a book called Broken Windows, Broken Business by Michael Levin.

I’m quoting Amazon’s description:

“In this vital work, author Michael Levine offers compelling evidence that problems in business, large and small, typically stem from inattention to tiny details. Social psychologists and criminologists agree that if a window in a building is broken and left unrepaired, soon thereafter the rest of the windows will be broken – and the perception will build that crime in that neighborhood is out of control. The same principle applies to business. Drawing on real-world corporate examples, from JetBlue’s decision to give fliers what they really want – leather seats, personal televisions, online ticketing – to Google’s customer-based strategy for breaking out of the pack of Internet search engines, to business-to-business firms’ successes and failures, Levine proves again and again how constant vigilance and an obsession with detail can make or break a business or a brand.”

So, what can you improve in your customer service?

By customer service, I mean anything in your business outside of your product or service.

Your website might be challenging to navigate, and your office might have worn-out carpeting, bad lighting, dirty bathrooms, and old furniture that doesn’t look clean.

There might still be a coffee stain from six years ago on your employee’s desk that has never been cleaned (it’s quite common in Italy): even if you provide exceptional service, help the UN solve world hunger, or create protected national parks in Africa, people will judge you based on that six-year-old coffee stain on your desk.

“Yes, they have talent; they’ve saved eight endangered species… though they could have cleaned that coffee stain on the desk too!”

You’re smiling now, but that’s how people will react.

Leave no stone unturned and ensure that customers don’t leave negative reviews just because of a bit of dust on your desk.

If one person tells another, “That dentist is fantastic. I didn’t feel a thing; it’s as if they barely touched me and they finished quickly. It’s a shame their receptionist never smiles,” the other person won’t remember the excellent service of the dentist, but they’ll remember the receptionist who didn’t smile.

Similarly, they won’t remember the eight species of animals saved but the coffee stain on the desk.

Another very telling example:

Totally nonsensical negative review
Totally nonsensical negative review.
Source: Simone Stori on Google.

Simone Stori is an Italian orthodontist based in Bologna, trained by Dustin Burleson.

Known for his charming personality, which I witnessed firsthand on stage at a marketing event, and as an exceptional entrepreneur, he passionately dedicates himself to orthodontics.

His practice offers a variety of services aimed at helping patients overcome their fear of the dentist, including massages and music therapy.

Simone has produced a promotional video for his practice that rivals Hollywood productions.

However, even someone as dedicated as Simone isn’t immune to receiving irrelevant negative reviews from customers.

For instance, the “kind” Maria Luisa Accascina gave Simone Stori’s practice a one-star rating on Google My Business simply for receiving an email from Simone’s newsletter – an email she had opted to receive!

Can you believe it?

Simone’s response is worth translating:

“Dear Ms. Maria Luisa, I regret that your evaluation of our clinic is based on receiving emails. As dentists, we believe you should judge us on the work we perform in your mouth. Our commitment to professionalism led us to send important communications, like the ones sent to you, to all our patients. I’m sorry if they bothered you to the point of a one-star review. To unsubscribe, just press the button at the top of the email. Once again, I apologize and have personally removed your email from all our databases.”

These are the real challenges entrepreneurs face: people often fixate on trivial details unrelated to the service provided, despite receiving exceptional care.

Browsing through Ms. Maria Luisa’s social profiles, with all due respect, she seems to embody the average Italian.

It’s difficult to describe Italians without sounding offensive.

I believe that if your business is outside Italy, you might find a smarter, less problematic clientele.

However, be aware that some clients might share traits with Italians.

When people talk about your business to others, they should focus solely on your professionalism and expertise.

They should never mention trivialities like a dusty office or an unsmiling employee.

It’s unfair for you to work hard to provide excellent service, only to be criticized for minor imperfections.

If people overlook distractions like dust, malfunctions, burnt-out light bulbs, and unpleasant employees, they will focus solely on your product/service.

The only way to ensure this is to make sure every aspect of your office/shop/center outside of your product/service is impeccable.

When a child visits Dustin Burleson’s office to have their braces removed after months or even years, they are rewarded with a large Smarties cake for their patience (since braces restrict certain food consumption).

Technically removing braces is a task any newly graduated dentist can perform.

Dustin doesn’t say, “I’m the best at removing braces,” but rather, “Choose me, and I’ll gift your child a Smarties cake.”

Why mention the Smarties cake?

Because parents will tell their friends, “Take your child to Dustin because he offers the cake and avoids making them cry like a blaring siren.”

Paying attention to such seemingly insignificant details can make a huge difference, as the great Sherlock Holmes once said.

  • 3. Your employees are unhappy.

If you build a business entirely focused on the customer and their satisfaction, you might overlook the happiness of your employees.

Your employees are human beings, and if they are not treated well, they become unhappy and dissatisfied with their work, which can lead them to vent their frustration on customers.

  • According to Gallup, employees who are not engaged or actively disengaged cost the world $8.8 trillion in lost productivity, which is about 9% of the global GDP. Their research highlights how important employee engagement is for organizational success. Companies with highly engaged teams see significant benefits in terms of customer loyalty, profitability, and productivity, along with reduced employee turnover.
  • ADP reports that the loss of productivity due to unhappy employees costs American businesses billions of dollars, with a specific estimate of $300 billion. An unhappy work environment leads to absenteeism, presenteeism (being physically present but mentally absent), lower productivity, and lower-quality work. Studies show that happy employees are 12% more productive than average.
  • The American Institute of Stress estimates that stress, often stemming from workplace unhappiness, leads to direct productivity loss and increased turnover, which can cost up to $14,492 per employee annually. Moreover, the inverse relationship between stress and happiness suggests that increasing happiness can increase productivity by up to 12%, with an annual benefit per employee equivalent to $7,200 for those with an annual salary of $60,000.

To address this issue, consider conducting an anonymous survey twice a year.

Provide each of your employees with a piece of paper and ask them, “Based on your experience, would you recommend a friend or family member to work for us? If not, why?”

Ask them to submit their responses anonymously to a designated mailbox within a specified timeframe, and then review the feedback.

If you search for cost of poor customer service on Google, you will discover that the figure is approximately $3.7 trillion annually.

This means that American companies lose $3.7 trillion annually in potential revenue every year due to unhappy employees.

According to another study by Fortune magazine (presented by Dustin Burleson at an event I attended and witnessed firsthand, but unfortunately, I do not have the publication link to show you), 70% of Americans have stopped doing business with a company because of the treatment they received from its employees.

It is clear that you need to address this issue if you have unhappy employees.

Identify any problematic areas in your business and determine the root cause of the problem.

If you discover unhappy employees, ask for their reasons and try to understand why they are unhappy.

Do this for the benefit of your customers and to increase future referrals.

Employees who sigh, waste time on their phones, roll their eyes when a customer enters, or can’t wait to leave… do you think people won’t talk about these negative attitudes when they discuss your company with someone they know?

They definitely will, even if they receive 5-star service.