Inbound Now #29 - Generating referrals & finding strategic business partners with John Jantsch

John Jantsch joins us for another exciting episode of Inbound Now!

John is creator of the Duct Tape Marketing podcast, which was named a “must-listen” by FastCompany.

John also owns his own marketing agency, he’s the author of [Duct Tape Marketing]( and his latest book, [The Referral Engine](

In this episode, we chat about:

  • How to get more referrals for your business
  • Finding out and Identifying what makes your company stand out
  • How to identify and attract Strategic partners and referrals
  • Educating referral sources on your ideal customer
  • Regular leads vs. referred leads
  • Podcasting tips from his years of experience
  • John’s number one tip for marketers


David: Hey everybody, welcome to another episode of HubSpot’s Inbound Now. I’m your host, David Wells, and joining me today is Mr. John Jantsch.

John: Hey David, thanks for having me. It’s so funny to do these video interviews because I’m watching you speak and it’s like the Japanese movies with subtitles, what you’re saying and what you’re lips are saying aren’t the same thing.

David: We’ll sync it up in post production, don’t worry about that. You do an audio podcast that’s awesome, Duct Tape Marketing. It was actually named by Fast Company as a “must- listen.” John also owns his own marketing agency, and has done so the past 25 years. He’s the author of “Duct Tape Marketing,” and his latest book, “The Referral Engine.” He’s a contributor on the AMEX OPEN Forum, and a ton of other stuff. His blog is awesome as well. I’m really happy to get you on the show here.

John: My pleasure. You guys are doing, and have done for years, some great stuff. I think I’m really in tune with what you’re doing to the idea of content and building trust. It’s something you guys probably do as well as anybody.

David: Absolutely. I wanted to get you on the show here today to talk about a lot of the stuff from your latest book, “The Referral Engine,” about creating a systematic approach for companies to create more referrals and forming strategic referral partnerships. And if we have a little bit of time, I’d really like to dive into what you’ve been doing with your podcast over the years. Sound good?

John: Sure, sounds great.

David: Awesome. You talk a lot in the book about having a systematic approach to generating more leads and referrals. Why is it so critical that companies have a system in place?

John: Well, it’s pretty simple. It goes back to really anything you [inaudible 01:53] all the stuff they do in their business, hiring people, firing people, paying the bills. But then when it comes down to marketing, and certainly this idea of referrals, it just sort of happened accidentally, organically. We don’t do anything to make them happen, or “Gosh, that’s a good idea, maybe we should do that.” So this idea of applying that same systems thinking to the idea of referral generation as an important and proactive part of your marketing is just essential. It makes life easier, and the fact that you deserve referrals will allow you to really amplify that.

David: Right. And you did a huge study for the book asking business owners, ‘“How do you get most of your business?” The overwhelming answer was referrals, right? But they didn’t have that system in place. How can you go about setting up those processes so you can start generating those on an ongoing basis?

John: Well, the first step is, quite frankly, probably the hardest one. When I started to write this book, my intent was to document what businesses with lots of referrals do and tell everybody how they’re doing it.

What it really came down to was – and this is the secret part I’m going to share with you, I haven’t shared this with too many people – if you’re looking for that one thing to do, the companies that receive more referrals are simply more referable. Sorry if that’s disappointing, but that’s the secret. I think that that’s the part that a lot of people really underestimate. There are a lot of companies that get referrals just out of sheer market momentum. “I don’t know anybody else to call” or “I used these guys, they seem okay.” But the companies that really get lots of referrals – 60%, 70%, 80% of their business – it’s because they focus as much attention on creating a tremendous customer experience as they do on focusing on generating referrals or generating leads of any kind. To some degree, what happens with people that really do that is that the customer experience, or that happy customer, becomes their lead generation machine. I think that’s the part that we can’t underestimate. You have to fix the gaps in your referability as step number one.

David: Right. You quote Seth Godin in the book saying, “If the marketplace isn’t talking about you, there’s a reason, and that reason is because you’re boring,” right? And I think it ties in well with a concept in the book, having a core talkable difference. How can companies identify their unique differences? And how critical is that for them to do?

John: Well I think it’s probably, I may say this again about some other point, but I think it’s probably the most important thing that a small business can do. When is the last time you raved about a perfectly adequate or satisfactory experience? And that’s the point I think that Seth is really making. Nobody talks about boring businesses. That doesn’t mean that you have to go out and do some stunt that gets everybody talking. But it does mean that you have to realize that pretty much everyone in your industry, in your town, that you compete with is probably saying the exact same thing about the features and benefits and great service that they have. And so you actually should go to those ideal customers, those customers that you can say, “Hey, I’ve got eight or ten of these [inaudible 05:43].”

David: All right. So we were just talking about identifying the differences, and you’re talking about narrowing down the unique customer, right? Your ideal customer.

John: Yeah. Actually what I think is the most important aspect is that you find a way to differentiate your business from everybody else that says they do what you do. The market needs a difference, and I’m telling you right now, my experience is that everybody in your town, everybody in your industry is saying the same thing. You have to find a way to really get above that, or you’re going to be doomed to compete on price.

What I often tell people is that the best source for figuring out what it is that you do that’s remarkable is to go to your best customers and ask them, “Why did you hire us in the first place? What do we do that others don’t? What are some things we could improve?” This kind of conversation, I’m not talking about sending out a survey. I’m talking about sitting down in front of them, or doing something like this, and asking them those questions. And push them a little. Don’t let them say, “Well, you provide good service,” because I guarantee you everybody else says that as well. Ask them, “So what does good service look like to you? Tell me a story about a time that we provided good service.”

If you do this exercise, I guarantee you’re going to start hearing, or at least I hope you’ll start hearing, some common threads or some common themes about what it is that you do that’s unique. My experience tells me it’s probably not what you’re communicating. It’s probably not what you think it is. Quite often, it’s the little things that we just assume everybody in our industry is doing as well. That’s what you need to tap and start maybe making your central core message about how you’re different.

David: Okay. So once you glean that wisdom from your existing customers, what would you then do with it? Bake it into your existing messaging or …

John: Yeah. You’ve got to find a way to communicate that in a way that clearly comes through in simple terms. I’ll give you an example.

I had an architect that I worked with years ago that said, like all architects say, “We design good buildings.” We went out and talked to their customers, and about the third time we heard this, we said, “Okay, stop. We have to figure out what this means.” What they said was, “Well yeah, they do design good buildings and they have those letters after their names so we expected them to do that, but what they really do is they help us get paid faster.” As I said, about the third time we heard that we said, “We’ve got to get to the bottom of that. What does that mean?”

Well, apparently what this firm did was they were really good at all the zoning stuff and cutting through the red tape and getting plans approved, so that the contractor got paid because the project moved forward and they were able to get that first draft so they could start the work. So we went back to them and said, “Tell us about this,” and it turned out they had a couple city councilmen as architects, little small suburbs and things. They just were really good at the whole zoning part. So we turned that around to be their core message, “We help you get paid faster” became what they did for a living, and they became the contractor’s architect. Just that little change and that shift when everybody else was saying “We design good buildings” was what really made a difference to their ideal customer. Just that little change in their message, and building all their processes, they even created some zoning and compliance products that people could buy for $5.99, and those kinds of things. It changed everything about their business.

David: Gotcha. So the idea of referrals is adding value far outside of your own business, and you talk a little bit in the book about forming those strategic partnerships. What approaches would you take that would effectively increase others referring your business?

John: I think it actually might be the most powerful and underutilized tool. Most people think of their own customers when they think of referrals, and they appreciate how brilliant you are. I get that. But probably a greater opportunity is this idea of creating your own strategic team or strategic partners. What I mean by that is a whole team of non-competing businesses that also supply best-of-class service or products to target your same ideal customer. The idea behind that is if you can develop relationships with a group of folks like that they could potentially introduce you to hundreds, or maybe thousands, of new clients by way of referral.

The key to this thinking though, because I run across a lot of folks and their mentality is, “Oh yeah, we’ve got a couple people and we send them a lead, they send us a lead, maybe we partner on a couple projects because we have a specialty that they don’t.” What I’m talking about is something a little deeper and maybe more formal than that. The idea of looking at your existing customers, your best customers, and saying, “What are all the things that they need in their life or in their business to meet their objectives? Can I build a team with one person that I trust in each of those needs with the idea that anytime one of my customers says, ‘Gosh, do you know anybody who does X,’ that I could actually be seen as the go-to person to plug that person in?” Now, if you take that mentality and you create a list based on those kind of criteria, that is the ideal start for who’s going to be on your team. You’ve also got to recruit that team and you’ve got to amplify, or get that team excited about doing some things.

There are so many great tools that you can use to do that. So often folks get some great strategic partners and say, “Yeah, we should be doing something together,” and pretty much nothing happens after that. So if you’ve got content, just like HubSpot puts out great e-books for example, if you’ve got an e-book like that, that you know your clients love and they download lots and they’d appreciate, go to one of your strategic partners and say, “Hey, would you like to send this or offer this to your customers? Put your contact info on it, put your logo on it, we’ll co-brand it, send it out.” That can be a tremendous tangible way for you to go to a strategic partner and say, “Hey, introduce me to all of your clients, but do it in a way that adds value,” as opposed to in a way to bring me in and say, “Hey, you should be buying from David.” So if you create those kinds of opportunities for your strategic partners, you’re going to make it really easy for them to introduce you to their entire client base.

David: Right. Another thing that you mentioned in a recent interview, or I saw somewhere on the Internet, you say that a lot of times when people do set up these strategic partnerships and their referral sources, they oftentimes don’t thank them for sending business their way, and that’s one of the biggest mistakes, right?

John: Well yeah, follow-up has to be part of the system. There’s no question. I look at it in several ways. Follow-up when you get a referred lead. Have a special formal follow-up. Let them know, “Hey, David sent you.” Making them understand that they’re going to get special treatment or they’re going to get a special deal because of that relationship, is number one. But number two, no question, when you’re getting these leads, I can’t tell you how many times people have told me over the years, “Gosh, we used to send them all kinds of business and they never thanked us, and we were sending them the business for the right reasons because we knew they could help, but it didn’t seem like they appreciated it.” I really think the right motivation for most people is that they’re helping, either they’re helping you or they’re helping their friend get what they need. But it certainly is nice to feel a little bit of appreciation.

But also, beyond that, I think follow-up and say why that wasn’t the right kind of lead for us, perhaps. Or follow-up and say, “Here’s what we decided, or here’s the conclusion we came to, or here’s how we helped them.” Everybody loves to get that kind of feedback, too. It’s a simple thing, but it will keep the tap flowing much fuller.

David: Right. So a part of that is educating the people referring people in your ideal customer, right? How would you go about doing that?

John: We have several processes, it’s called “The Perfect Introduction.” I talk about it in the book. With your existing customers that are out there going, “Hey, how can we send you business? We want to refer you,” is to actually have a process where you sit down with them and say, “Here’s how you’d spot our ideal customers. Here are the kinds of things they might say that would let you know they need us. Here’s how to introduce us. Here’s our process. Here’s what we do when you introduce a lead to us.” So actually formalizing this on a piece of paper or in a presentation or on a web page or something so that you can use it as a training tool is a great process.

Now the flip side of that is, going back to our strategic partners, that’s also a great tool for you to recruit strategic partners with. We also take that tool and we send a letter to these strategic partners and we say, “Hey, so-and-so said we should be talking to you, that you’re the best at X-Y-Z, and we have some clients that actually might use your services, and we’d love it if you could teach us the best way to introduce you to our clients. And by the way, here’s a form we’d love for you to fill out that says how would we spot your ideal client.” That exact same process, using that tool to actually recruit strategic partners by asking them to teach you about their business. I’ll tell you what, that single approach certainly makes recruiting strategic partners much easier because you’ve turned the tables and instead of saying, “Hey, we want to tell you everything that’s great about us so you can send us business,” you’re actually inviting them first to teach you about their business, and boy that gets attention far greater than any other approach.

David: Right. And I would think formalizing this, instead of meeting someone at a networking event and you’re like, “Oh, we should do something together,” and nothing ever happens. I think formalizing this, getting this down, having a page on your site that targets them, I think that would help tremendously.

John: I’ve spent a lot of time teaching people this idea of “trigger phrases.” Even creating a sheet of paper that says something like, “Here are the kinds of things people say that would let you know they’re a great candidate.” Because a lot of times, I’ve worked with a lot of software companies for some reason over the years, and they would always get frustrated because it was like, “They don’t know that our stuff does this, and it does this, and it does this” because it was like, “Hey, we have great accounting software.” Well, nobody goes out playing golf with their buddy and says, “Gosh, I sure wish I had some better accounting software,” right? They say things like, “My accountant’s after me because our data’s not in the same place” or, “Our bills are always late being paid.” I mean, it’s those kinds of complaints that I call “trigger phrases” that I actually teach people to create a sheet of paper that has these phrases on it and basically say, “Hey, if you hear anybody saying any of these things, give them our card.” Doing everything you can to make referring to you easier is certainly part of the system.

David: Gotcha. So you differentiate a regular lead with a referred one, right? So why, exactly, should you treat a referred lead differently? What’s the thought process there?

John: Well, there are a couple of reasons. First off, anytime you have the opportunity to personalize your communication with a lead, the better. And again, we can talk about that topic, alone, on a lot of levels. Certainly, you have this extra data about a referred lead. You know somebody sent them to you, right? So it’s a great opportunity to personalize it. It’s a great opportunity for you to reward your friend for saying, “Hey, so-and-so said you’re great, we need to take care of you.” I mean, there’s another element to that as well.

The other thing about a referred lead that is different is in some cases, they’re on a different sales cycle. They’re on a different timing cycle. If somebody comes to your website, goes to a webinar, calls you up and says “We need to talk to one of your guys because you’ve identified our exact problem. Come on down.” And that’s one sales cycle. A lot of times a referred lead is somebody that your brother-in-law says, “You need help. I’m going to refer you to so-and-so.” Well, that person may not actually know they need help yet. So in a lot of cases, you have a different education process that you have to employ. As I said, maybe a different timing, maybe they need some nurturing as opposed to getting ready to go. In some cases they may be out there crying for help and their buddy said, “Yeah, call them,” and you go on down and you sell them. But I think you need to be prepared for treating that lead differently.

David: Gotcha. Switching gears now into podcasting, because you’ve been podcasting for awhile. I really like your show. I’ve been listening for quite some time now. What really got you into podcasting and how has it helped your business?

John: Well, I determined seven, eight, nine years ago that content on the Web was definitely what I wanted to do. It was going to make life easier. There was a very quick correlation, even back in those days, to content and SEO success.

So for me, it started off just being another kind of, “Hey, this looks like an interesting way to create content, to spread content.” I’d been blogging for probably a year at that point already as well. What I quickly found out was, I mean really, my first attraction was, “Hey, another way to create content,” but what I quickly found out was that in circles that were online, that were a little tech savvy, that had certainly heard of this term “podcasting” back about seven or eight years ago, it was a great way for me to get an interview with people that, had I sent them a thing that said, “Hey, let’s chat sometime.” It would have been “delete.” But when I sent them an email that said, “Interview request. I’d like to have you on my show,” it’s just me and my mom that listen to it, but they didn’t know that. But really, there was this allure of the idea of a podcast, or an interview. Even me, today, I’ll get requests from a publication that is so far out of my expertise or industry, but it’s still very hard for me to say no to an interview. I think that’s an aspect that I tell people all the time, I don’t care if you have ten listeners to your show, this will give you access to people in your industry, maybe to potential customers, as well as this idea of creating content, which we’ve all come to the realization is a must. So that’s really my very little secret to podcasting is the access that it will give you is reason enough to do it.

David: Yeah. It’s a win-win, right? They’re getting exposure, and you’re getting content, so it’s really a win-win situation.

John: Right. So your first list of 15 guests when you go out and start your show tomorrow should be your strategic partners. Put them all on your show, give them a content opportunity. That’s one of the ways you differentiate yourself with your strategic partners is by creating that win for them. And a lot of these things that I’m talking about with the strategic partner network is how you attract bigger names, better strategic partners. It’s how you get them motivated to want to introduce you to their clientele, and podcasting, or videocasting, or however you want to take it, is just a tremendous way to get started and give them that exposure.

David: Right. And I think it builds on itself, right? Each episode you can get access to more and more people as they see your show as more valid in the market, has a bigger audience, etc., right?

John: Exactly. And in your industry, you get the president of an association or somebody that has written a bestseller that deals with a topic in your industry, and that alone is a great differentiator. Your competitors don’t have that on their site or don’t have that video to share with their customers. So I think that’s another aspect of it as well.

David: Right. Is there a reason you went with audio as opposed to video or another method?

John: At the time, as I started my show I think in 2005, the audio was very easy. I was still recording with a device over telephones. The video part of it, as is evidenced today and Google Plus’s new Video Hangout tool, I think you’re going to see a lot of video come out of that. Facebook video, YouTube video, all of that stuff has just come leaps and bounds in the last few years. I’m actually doing more video myself, but I’ve got thousands of subscribers to the audio feed and I want to keep them happy, too.

David: Cool. I asked this question the other day on our Facebook fan page, “Do you listen to any podcasts? What are your favorites?” So same question to you. Do you listen to any other podcasts and what would you recommend out there?

John: This is going to be a terrible answer. I don’t listen to any other podcasts. I know, it’s terrible. It’s really purely a timing thing and what works for me or doesn’t work. I subscribe to several hundred blogs and still read those religiously. I just don’t have a routine where I put on a set of headphones and listen to shows.

David: What are some of those other sources that help you keep up with trends?

John: As I said, the blogs that I read are certainly a tremendous resource for that. I’m a big fan of some of the bookmarking sites, like Digg and Delicious are really great places for me to get inspiration for content. I do subscribe to a number of the SmartBrief, which I’m sure you’re probably familiar with those folks’ topics because, again, that in many cases exposes me to content that I don’t have to go chasing. It comes to me. Those are probably some of my best sources. Certainly [inaudible 24:01] Twitter, and some of the pages on Facebook that I follow certainly promote content or kind of mine content that I might not find otherwise. I do think, from a business standpoint, I know right now it’s a lot of the geeks just talking to each other on this Google Plus, but I do think that’s going to be another potential source of content as well.

David: Yeah. I’m interested to see what happens there. So if you could give one piece of advice to the marketers out there watching right now, or listening for that matter, what would it be?

John: Well, going back to this topic of referrals, I would say look at every single way in which people in your business come into contact with prospects and customers, and maybe add a few ways that you should be coming into contact with your customers and your prospects. Analyze every one of those touches and see if you are sending the marketing experience with those. I talk about the definition of marketing is getting someone who you need to know to like and trust you. Well, what are your know, like, and trust touches? After that, what’s your try, buy, repeat, and refer? What are all those processes, or products, or services that logically move people down through that experience to the point where every prospect that comes to know about your business, ultimately the goal is to get them to your referral source. What are some of the gaps you’re going to need to plug in the experience? Or what are some of the changes you’re going to need to make in some of your processes so that all of those touches send very positive and fun and simple marketing experiences?

David: All right. So where can people find you online?

John: The simplest place is From there I have a newsletter as well, the email form, certainly the blog, and the podcast that you talked about. But lots of other content there as well, as well as our products. You mentioned a couple books, but I also have a home study course for marketing, it’s based on Duct Tape Marketing. I have a whole network of independent marketing consultants around the world that actually, if what I talk about resonates and you want somebody to hold you accountable and help you install that system of marketing, you can actually hire one of those folks to do that.

David: All right. Thanks for coming on the show, John. I really appreciate it. I think you shared some valuable referral insights here with the audience, and I want to get you back sometime.

John: All right. You bet. I’ll be in Boston sometime when you guys are doing the live TV show too, and I’ll jump in that too.

David: Yeah, you can come in. I’ll do a live studio interview.

John: You bet.

David: Thanks.

John: Okay.