A recommendation constitutes the most powerful referral one can receive. It is highly advantageous to obtain a referral since the client is already convinced about our products or services, courtesy of the referrer. Such clients typically do not engage in price comparisons, and they are already receptive to both you and the goods or services you aim to sell. Intriguingly, for numerous small-to-medium enterprises, referrals are the primary source of new clientele. Individuals frequently inquire directly from their friends and associates for referrals (e.g., ‘can you recommend a good…?’), make recommendations themselves (‘if you require a good…?’), or discuss businesses and service providers that have impressed them during social gatherings. Unless one possesses an extraordinarily large advertising budget or a sales force consistently making cold sales calls, the majority of new business is likely to originate from someone informing another person about you.

If this is indeed the case, then why do we not devote more effort towards acquiring referrals? Perhaps it is due to our reluctance to ask. Fortunately, the concept of ‘Endorsement Marketing’ enables us to rapidly obtain referrals without having to request them directly. All that is required is a database of clients or customers and the name of a business (not a competitor) that also caters to your target market.

Here is an explanation of how this approach can be beneficial for you.

1. Identify your target market. Consider the demographic and common characteristics among the potential customers: Are they male or female, aged 18-25, retirees, parents, golf enthusiasts, or car owners? Determine the shared attributes within this group.

2. Next, identify other businesses that serve a distinct product or service to clients who share similar traits with your target market. This step requires some innovative thinking.

For instance: Suppose you own a plumbing business. Your customers are homeowners. Which other businesses have clients who reside in homes? This encompasses a wide range of businesses that cater to individuals rather than other businesses. In theory, a plumber could engage in an endorsement campaign with a hairdresser, hardware store, mobile phone shop, solicitor, dog groomer, supermarket, travel agent, bookstore, physiotherapist, bathroom renovator, or motor mechanic, among others. If you are a metal fabricator, your clients are likely to be other businesses. Potential targets could include stationers, computer sales/repair providers, accountants, solicitors, finance brokers, insurance brokers, training providers, or local newspapers (for their advertiser’s list). This list is also extensive. You may even narrow down the focus. For instance, what else do the purchasers of your metal products buy? Which companies supply those goods or services? In reality, the distance between you and your potential endorsement partner is not critical. For example, successful endorsement arrangements have been observed between accountants and tailors. A useful tip – you can utilise the Yellow Pages index to determine which businesses also cater to your target customers. Examine each category and ask yourself, ‘Why couldn’t I establish an endorsement arrangement with this business?’ instead of ‘How could I?’ By adopting this approach, you will likely generate a more extensive list of potential partners.

3. The subsequent step is the most challenging. Initially, refine your list by eliminating any businesses that do not provide the service level you desire for your clients. (It is crucial to avoid complaints from your valued customers regarding the business to which you have referred them – so ensure that you are satisfied with their offerings). If you are unfamiliar with their services, assess them. Contact them to evaluate their telephone communication, visit their premises, or invite them to your location to gauge their performance.

4. Subsequently, you must approach one or two businesses to present the concept. This may be achieved through contacting the marketing manager directly, or, if you prefer a more reserved approach, by drafting a letter that outlines the potency of referrals and proposing a meeting to discuss the potential of a mutual endorsement of each other’s products or services. Naturally, to execute this strategy, it is essential that both parties possess a customer list or database, so ensure that this is the case before progressing too far with the collaboration.

5. Prior to meeting with the company, determine what you can offer to their clients. At the very least, this could encompass your product or service with a guaranteed level of customer service. Ideally, it might include a special offer, discount, gift with purchase, vouchers, or a unique entry into a competition, among other possibilities. Remember that a new client may potentially generate significant long-term revenue for your business, so endeavour to make the offer as valuable as possible. The more valuable the offer, the greater the likelihood of enticing them to try your services. Moreover, contemplate the potential offers that you would like them to extend to your clients, so as to provide suggestions during the meeting if they are uncertain.

6. Arrange a meeting with your potential endorsement partners and elucidate the concept to them. Inform them that you would like them to write to their clients, recommending your products or services. If they are not amenable to the idea, it is likely that they would not have been a suitable partner for you in the first place; thus, it is advisable to proceed to the next name on your list.

7. Subsequently, create the material that you will be providing or sending to their customers or clients. If feasible, attach a voucher or coupon to it and suggest that your endorsement partner do likewise. Sending mailings with coupons, vouchers, and other enclosures proves to be more effective than letters alone.

8. Schedule your campaign appropriately. Ensure that you execute the campaign at an optimal time for your business. For instance, it could be during a traditional lull in trading, the beginning of a new season (when you have fresh stock to offer), the end of a season (when you can organise a clearance sale), or upon the release of a new product or service.

9. In the field of marketing, the concept of guaranteed success does not exist. Therefore, prior to investing significant financial resources in a marketing campaign or mail-out, it is advisable to conduct several variations of testing to determine which option yields the most favourable results. The option that proves most effective should then be selected. It is important to note that the response rate for cold direct mail is typically around 1%, thus emphasising the importance of the offer presented.

10. It is crucial to measure the success of your marketing campaign. Endorsement marketing campaigns offer the advantage of being repeatable with different endorsement partners. However, it is essential to avoid overwhelming clients or customers with excessive mail-outs. A strategic approach is to couple a few top partners together and promote them to your clients. Successful campaigns can lead to the development of a customer loyalty programme. Measuring the response rate for each campaign is critical as it enables timing of subsequent campaigns. Coupons or vouchers should be coded to identify the source of the response, and time-sensitive offers can help generate a quick response from potential customers.

The following action plan is recommended for endorsement campaigns:

• Define your target market and identify your customers.
• Identify businesses that have similar clients as yours. If necessary, utilise Yellow Pages’ index for assistance.
• Test the service of your prospective partners and remove those that do not offer excellent service from your list.
• Approach the first two businesses on your list with the concept and arrange a meeting.
• Ensure that they have a substantial client database.
• Develop an appealing and appropriate offer for their client base, and note down any suggestions for what they can offer your clients.
• Meet with your prospective partners and explain the concept.
• Design (or have designed) your mailing piece, voucher, or letter.
• Decide on the most appropriate time for your campaign.
• Test different varieties of your campaign to identify the one that gets the best response.
• Execute the campaign and measure the results. By following this plan, you may develop valuable referral sources and attract new customers.