Marketing Myths

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Six referral killing myths
by Joe Gracia


People won't refer their associates and friends to your business 'because' you offer them a free gift, like a free lunch, movie tickets, cash, etc.

They refer others to your business because they feel that their associate or friend will really benefit from your product or service. They refer others so that they can 'help' them experience a very positive result.

They also refer businesses to their friends because they want to feel important. They feel important when they are in possession of valuable resources that they can share with their friends and associates.

Ask yourself why you would recommend a restaurant to a friend, and you'll see what we mean. If you had a delightful experience, you would want your friend to enjoy the same experience, and so you may recommend the restaurant to him or her. If they have an equally good experience they will be appreciative of your good taste.

You probably wouldn't refer friends to a restaurant or any business for that matter, just because you might receive a modest gift from the restaurant for doing so.

We're not implying that your service may be mediocre, we're just pointing out that excellent service is one of the most influencing factors in generating referrals, not gifts.

This doesn't mean that you shouldn't show your appreciation with a sincere Thank You note or gift. But don't make the referral process contingent on a gift.

Bonuses or free gifts have little or no influence on your clients' desire to recommend your services to others.

Their excellent experience with you and your business is the greatest influence.


Usually, they don't. You may be fully aware of the many services you provide and how those services can benefit your clients' associates, but never assume that they do.

You may be surprised at how little your clients know about what services you offer. They are inundated with information to the point of overload. It's difficult enough for your clients to remember all of the details involved with their own businesses and lives, let alone the details of your business.

They rarely know exactly how your services can benefit their friends or associates or even if your services are appropriate for others.

If your clients are confused about which services you offer and which ones would benefit their associates, they probably won't refer you.

This problem is compounded when professionals use their industry's jargon rather than simple terms to describe what they do. Jargon just confuses people, and confused people won't refer others.

This is why it's so important to simplify your services and describe them in easy to understand terms that everyone can understand.

It's also important to focus on just one or two of your services when you follow up with your clients. Make it easy for your clients to refer you.


Once you leave your clients, chances are they rarely think about your business and your services. They have a million more pressing matters that they must address.

If you want to bring your business to the top of your clients' minds, then you must follow-up with them on a consistent basis, with helpful information and special offers.


Have you ever had a business owner hand you a stack of his or her business cards and then say, 'If you come across anyone who you think might be able to use my services, please pass along one of my cards.'?

And then what did you do with those business cards?

If you're like most people, you either put the cards in a drawer, never to be seen again, or you discarded them.

No one keeps your business cards in their pocket just waiting for an opportunity to promote your business.

Usually, it's only when someone asks them for advice concerning your particular field that they will think about referring you.

'Jim, I'm having a difficult time finding the right person for our new sales position. How do you find people for your business?'

That's an example of an ideal referral opportunity.

If your client, Jim, is a happy customer and loves your service, there is a good chance that he will now refer your business.

But, how many clear cut referral opportunities like that come along each month? Not many.


If you don't explain the full value of your services to your clients, then they probably won't understand them.

Here's what I mean. We had a client that we helped to grow her business through more effective marketing.

One of the most powerful methods we taught her was risk reversal. We simply had her offer a 'no-questions asked,' money-back guarantee on her services.

Such a guarantee was unheard of in her industry. None of her competitors would dare make such an offer.

She took our advice and in the first month after implementing her new offer, her sales increased by over $30,000!

She was thrilled with the results she received, but we didn't stop there. $30,000 is nice, but the real value of the system we created for her was much, much more valuable.

We then provided her with the total value of her new system over a 10 year period. An average of $30,000 in additional sales per month, times 12 months comes to $360,000 in additional sales annually, times 10 years comes to $3,600,000 in additional sales over 10 years.

Why did we take the time and effort to spell out the full value of our service? Because we knew that she probably wouldn't think about the overall value over time.

If she was pleased with the initial windfall of $30,000 in the first month, just think how pleased she was when she recognized the total value. Needless to say, we received quite a few referrals from this one client in particular.

If you want your clients to appreciate the full value of your services, don't be afraid to spell out what your service will make or save them over time.

When clients are impressed with the results you have achieved for them, they will be much more likely to refer others to your business.


This is probably the biggest misconception of all.

The ideal referral is one that has been pre-sold by your client before they call you. They are hot and ready to sign up. Yes, those kinds of referrals are wonderful -- but they are also very limited.

Your clients may feel uncomfortable recommending your full services -- perhaps your services may be perceived as expensive, or their associate won't be happy with the result. Then how would they feel?

Perhaps their associate is not quite ready to make a buying decision.

If you can relieve your clients' concerns, you will get a lot more referrals.

Instead of asking your clients to refer customers to your full service, which could be putting them in an awkward position, how about asking them to let you know if any of their associates would like to receive a free Hiring Idea-Kit filled with tips on hiring, or a free Employee Motivation Idea-Kit?

Now your clients aren't in a position of recommending a potentially expensive service that they may not be happy with. Instead they are simply providing their associates with a valuable resource, that comes free, without obligation and without pressure.

Between the two types of referrals, which do you think your clients would be more willing to provide?

With this referral method you have removed all of the concerns and obstacles between your client and his associates, and opened the doors to unlimited opportunities for converting those referred prospects into future customers.

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