The Catalyst

Most local business owners will tell you that referrals are the cornerstone of their success. Often, they have cultivated elaborate processes to ensure that their customers are happy and willing to refer them or use them again.

Two weeks ago, I sat with a window contractor who shared a six touch-point system of communication between his company and the customer that takes place after the contract is signed and before the job starts. To their credit, their customers notice efforts like these and, of course, their quality work and reward them with hundreds of testimonial letters and referrals. None of this is new; it’s just part of running a sound business.

What has changed in the last few years, however, is the ability of local businesses to use social media to engage existing customers with the end goal of increased add-on sales and referrals. Much of what is called “Web 2.0” centers on the idea that you can communicate on multiple fronts in real time with a person or organization if you so desire. Social media sites like Facebook, LinkedIn, YouTube, and Twitter allow businesses to build a “fan base” that opts to engage with that business more frequently. Flickr and Slideshare give companies another venue through which to show off before and after pictures of completed jobs or procedures or talk about the suite of services they offer.

But who actually does this stuff? And doesn’t my web site do this already? These are questions you are likely asking yourself right now with good cause, so let’s tackle them.

1. Sites likes Facebook, LinkedIn, and MySpace are called social networking sites because they are exactly that: virtual networking hubs. By definition, when you “friend” me or become a fan of my business on Facebook, you are introducing me to all of your other friends and giving me your tacit approval. You are saying to your friends, “I know this woman. She’s ok.” What is that if not a referral? On LinkedIn, I may have 100 contacts in my “Network of Trusted Professionals,” but I can ask to be introduced to any one of the 5000+ contacts my contacts have or even the 600,000+ contacts that are two degrees of separation away. That’s the reach virtual networking has.
2. Businesses that are best suited to generating referrals and add-on sales with social media are those where the perception of expertise is critical to success. While no business can afford to appear as if they don’t know their stuff, a Ford Focus is a Ford Focus is a Ford Focus, no matter where I buy it. If I want Lasik surgery, on the other hand, or someone to prosecute my personal injury case, rest assured that I and most consumers are looking for the practice with the most expertise. Social media allows you to demonstrate your expertise to more people for free.
3. When you build it, they will not come. Just having a web site does not mean that you have mastered the Internet and online marketing. As you may have read or been informed by someone pitching you an expensive package to optimize your web site in search engines like Google and Yahoo, there are many measures you can take that will get your web site to show up on page one of Google when people search terms that are relevant to your business. Marketing your business via social media helps you optimize your web site for free.
4. While most of these social media sites like Facebook and LinkedIn make their money by selling advertising, resist the urge to buy it. Let the big national brands underwrite this growing media; don’t let social media sites cut their teeth on your smaller, less error-proof marketing budget. Smart local business owners recognize that free “public relations” efforts on social media sites will net a better return than any paid ads on the sites, no matter how targeted they are. The key here is building social marketing tactics into your business in a manner that won’t use too much of your valuable time.
5. Millions of people of all ages use these sites, even if you don’t. As one example, 150 million different people use Facebook globally, and over 50% of Facebook users are aged 25 and older. You can easily go into the Advertising tab of Facebook and use their free tool to find out how many people of a certain gender and age are on Facebook in your city or state if you don’t believe me. Bottom line: if you have customers, there will be people who are willing to hear from you in this environment.

So with all of that said, what are the next steps for the local business owner? In Part 2 of Free Referrals on Facebook, we’ll give you three simple tasks that will generate referrals and add-on sales for your business. You’ll also love the “price tag” (hint: read the title one more time!).

Jodi de Riszner is a media and retail strategist in the firm ESA & Company, based in Red Bank, New Jersey.  She lives in Buffalo, where images of sunshine dance in her head.