I'm a customer of a pet boarding service called Pet Camp here in San Francisco, and I make it no secret. They've done an amazing job taking care of our 2 Basset Hounds many years ago, and now my cute mutt, Dwight. Yappy hour? Yes. Extended play time? You bet, more than he gets at home! Daily pix posted to the blog? Yup. A grooming before he comes home? Check. It all works for us.

One day I asked Mark, owner of Pet Camp, if he used email marketing since the company I founded VerticalResponse did just that for a small business like his. I just knew he could really benefit from it. At the time he wasn't really doing much with email, he was doing what all small business owners have to do; the million things he needed to do to run his business. Yet he knew to get new customers in the door he'd have to do more marketing. He looked into it and in no time became an avid customer.

As his business really started to boom using email marketing and adding social media to the mix, he told everyone he knew about his success. He even harassed some "higher ups" in our city government who were using a competitive product to switch to VerticalResponse, now that's a powerful referral!

And just as Mark actively recommends VR to ANY SF small business he comes across we avidly recommend Pet Camp to anyone who needs care for their pet. And by "we" it's not only me now, it's also employees of VerticalResponse. Mark became a real friend of the entire company because of his great testimonials and case studies of how his business grew. It's a great referral marketing story that just "happened."

This story is one of a million stories I can come up with. My good friend John Jantsch believed in it so much he wrote the book on it, The Referral Engine, and he's absolutely right, the power is amazing!

So how are you using referral marketing in your business to grow?

  1. Ask people to give you a review on Yelp, Amazon, iTunes, your site or wherever you might be listed. For instance Amazon's algorithm really likes 4-5-stars vs. just 3-stars which is considered a negative rating.
  2. Allow people who refer friends to give discounts so they look great to their buds while you get a new customer. Gap does a great job with giving their employees cards with referral codes on them to get the "employee" discount for exclusive Friends and Family sales and it works!
  3. Simply offer a superior product and a wonderful customer experience so that people just want to talk about it. The fact that Nordstrom's takes returns "no questions asked" is amazing!
  4. At your location offer space to neighboring businesses so that they can offer their flyers or materials and ask for space in their places.
  5. Get software! Ambassador is the new kid on the block. Set up campaigns so that your brand "ambassadors" have an easy way to shout how great you are from the mountaintops and get paid for it!

So the power of a great product and referrals can really move your business needle this year. What are you doing to get there?

Published on: Dec 30, 2014
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.