A former marketing client of mine in the iron manufacturing business referred me to a hair salon owner. When I met with the hair salon owner, I asked how the CEO of an iron business knew a hair salon owner.
I couldn't picture them sitting together at a Vistage group, as the hair salon does less than $500,000 per year, and the iron business does 8 figures.
The hair salon owner said he cut my client’s hair. He also cuts my client’s father’s hair, and cut my client’s grandfather’s hair before him. That family has been coming there for over 60 years.
That’s what Dan Kennedy would call a “lifer.” My former client lives on the same street as me, and the hair salon is at least a 20 minute drive. In Buffalo, 20 minutes is a long commute for us suburbanites, lol. There is a much cheaper hair cut place literally 3 minutes from both our houses. There are dozens between our neighborhood and the place my former client goes to. He’s never going anywhere else. That’s the type of generational marketing you want, and we are going to talk about how to get that in just a minute.
Another way to look at generational marketing is to track your generations of referrals. How far down the tree do you track?
A number of years ago, a colleague of mine from a BNI group told me that Shark Tank’s Kevin Harrington was coming to Buffalo to speak. Nobody comes to Buffalo to speak.
I rescheduled 8 meetings and bought a $300 ticket to go see Kevin speak. I have always been a HUGE Shark Tank fan, and Kevin was a DREAM client of mine. My 10 seconds of facetime with Kevin at the event (in the book signing line), led to me giving him a 20 minute ride to the airport (pre-Uber).
That led to sending him a Shock & Awe Box, which led to my firm doing marketing consulting for him, then him being my podcast co-host and my business partner. Dream client acquired!
My connection with Kevin led to partnering with him in another business he owns, Angel Investors Network. That led to a spot as a celebrity guest judge at Kevin’s live Pitch Tank event every year. I can trace dozens of active clients to that relationship, and track the referrals those clients gave me, and so on.
For example - Pitch Tank led to a speaking engagement at Kevin’s mastermind group, which led to a referral to a woman with portable pet door product. She referred me to her husband, who referred me to a business partner of his, who is hiring us to create a shock and awe box for him. That’s three generations of referrals right there. When his check clears, I will send a commission check (whether they are expecting it or not, whether they are aware of the chain or not) to everyone involved. You can bet that will prompt some happy phone calls, and even more referrals.
So how do you build endless chains of referrals? How do you get multiple generations of clients in your business?
I will give you an amazing example of an awesome marketing strategy that another business is using, and then we will discuss how to do it for you.
Kyle Porter owns a kid's karate school a little bit north of Atlanta (http://www.samplesdojo.com/). He opened about two years ago and has a great growth rate for a Karate school. It’s how he did it that is very, very unique and should be used in your business.
The first thing that is really unique is that his school only teaches elementary school kids. No adult classes at all.
He has essentially a five mile radius around his building that is basically the only place that he is going to get any members from. Part of that is the density of karate schools in the area. And part of it is just the fact of logistically, people aren't going to drive 10 to 15 miles for their kids to take karate classes. He has three elementary schools within two miles of his building, and he’s got 1000 kids sitting in each one of these elementary schools, and that's his entire market.
He goes into the schools and actually replaces the gym teacher for a week. He teaches all the PE classes at these schools, K through five, kindergarten through fifth grade, and they do a karate class. They keep them focused. They keep them busy, moving, and having fun.
Here's the exact funnel. When they go into the schools, they see each kid two times. The first time they give them a sheet that they take home to their parents, and it's basically a chore list. It's five things that they do at home without anybody having to ask them. What the parents are experiencing is the kid comes home and says, "Mr. Kyle from the Dojo's come in. I had a great time in PE today. He gave me this sheet. Now I've got to go clean my room and I've got to go vacuum the living room, and I've got to feed the dog, and I've got to do all these things."
The parents are thinking, "This is great!" And then if the kid does those things, the second time they see them in class, if they bring that sheet back, then they get to break a board.
Then there's also a spot on the sheet that says, "Hey parents, we hope you've enjoyed your kid coming home and doing all these chores without you having to ask them. If your kid has done it and you want a video of your child breaking their board, then write your name and phone number right here."
They send a video to the parents. They film every single kid breaking their board. They text the video. And then there's a call to action for them to come in to an event that Saturday where they can come in and it's a celebration. It's a pizza party, and the kid gets their white belt and they get their uniform. So it kind of gives them the next step after they've broken a board.
How well does it work? At one of the elementary schools, they get 80% of the sheets back that have names and phone numbers of the parents that they treat as warm leads. That’s basically an 80% opt in rate. When was the last time your website got an 80% opt in rate? Has it ever? After the week of karate / pe classes, they call the parents, and say, "Hey is this something you guys want to continue with?" It works pretty quick with a great conversion rate.
Isn’t that brilliant? Talk about outside the box thinking!
They also have an after school program where they pick up the kids in a school bus that they bought and wrapped with their logos. They pick up kids the kids, bring them back to the dojo and they have a combined karate and day care / after school program.
That’s how they get the kids in the door, here’s how they generate referrals. One of their referral events is called “Laser Tag Showdown, Parents' Night Out.” What that looks like is for 50 bucks, you can drop your kid off at five o'clock in the evening. The windows are blacked out. They’ve got black lights hung up, fog machines, strobe lights, and they've got a bunch of laser tag sets. They wrap dodge balls in black light tape. The kids say it’s like playing dodge ball in space, and they're having a great time. All the kids bring friends with them to come play. They also have them running around and kicking bags, and that kind of stuff, so they do experience some karate. So it gives them that first experience of like, "Oh wow. This is really fun," but it's not a, "Parents, sign your kid up for this long term commitment," kind of thing. It works like a charm, and brings in new families as members every time they do it.
They even managed to make their billing unique. Unlike most karate schools where you have to sign a one year contract, or join a Black Belt club and sign a five year commitment, they have no contracts and their billing is month-to-month. Then the burden is on them to provide an exceptional experience because the kids could quit at any time.
So that is what’s possible if you do this right. That elementary school is essentially an endless chain of referrals into the karate school.
My relationship with Kevin Harrington and Angel Investors Network is another endless referral chain. Kevin gets pitched about 10,000 business a year, so we can cherry pick the best ones to help with their marketing. The Angel Investors Network is always bringing in new investors who want to fund these companies. Recently we even had one investor offer to “donate” the money to us to fund our marketing for one of the companies he was involved in, because they couldn’t afford us (in case you are wondering, we are reassuringly expensive).
Michael Griffiths is the founder of Referral Marketing Guru, the #1 Referral Marketing Training organization around the globe and he had this to say about starting a referral chain in your business, “The first thing you want to do is work out who also sells to the same clients that you sell to and you don’t compete with one another. Or ask yourself, “Where else do my clients spend money?” All of those people have the potential to be referral partners. The second step is simple, start asking people if they are interested in being referral partners.”
Michael says don’t lead with offering to pay people for referrals. “The money will never be the reason why someone finds you referrals. The money, if there is any, should be an unexpected pleasant surprise.”
One of the biggest mistakes business owners make when trying to generate generational referrals is that they don’t train their referral partners. You have to teach them how to refer you. They need to know what to say, how to bring you up in conversation, etc.” You can’t leave it up to chance, or assume your referral partner has any idea how to sell your services.
Michael’s top three referral tips are:
Communicate as often as possible with your referral partners, networks and the people that are in just circles. The more you communicate, the more you are remembered and the more opportunities that are created for you.
TRUST, TRUST, TRUST…. People will never help you unless they trust you. Start with getting to a personal level (not business level) and look at the difference it makes to the relationship.
Follow a process and don’t rely on hope and luck. If you want to learn how Michael does this, he has some great resources at www.referralmarketingguru.com.au/resources
Good luck and let me know how building your referral marketing chain goes!
Seth is a Nationally Recognized Direct Response Marketing Expert. Seth Greene is the author of five best-selling marketing books, and his latest book, Market Domination for Podcasting hits Barnes & Noble in January. He is the only person in history that Dan Kennedy has nominated for marketer of the year three years in a row.