Olivia: Here’s a wild business statistic for you, Jackson. For about 80% of small businesses, over half their customers come from referrals. Jackson: Wow, okay. That's a huge chunk of their business. Olivia: It is. But here's the kicker: that same 80% admit they have absolutely no system to get them. They're running on pure, accidental luck. Jackson: That's a terrifying thought. Relying on luck for most of your income. It's like having a business plan that's just a lottery ticket. Olivia: Exactly. And that's the central problem John Jantsch tackles in his book, The Referral Engine: Teaching Your Business to Market Itself. What's fascinating is that Jantsch isn't some corporate marketing guru writing from an ivory tower; he built his entire career, starting with his famous Duct Tape Marketing system, by creating practical, systematic strategies for small businesses—the very ones running on that accidental luck. Jackson: Okay, so he's in the trenches. I like that. He understands that a small business owner can't just hire a "buzz department." So where do we even start to fix this 'luck' problem? Olivia: It starts with a question that sounds simple but is deceptively hard: Are you even worth talking about?

Jackson: Hold on, "worth talking about"? That sounds so subjective. And frankly, a little intimidating. My business might be useful, it might be reliable, but is it… talk-worthy? Olivia: That's the core of it. Jantsch quotes the marketing sage Seth Godin, who said, "If the marketplace isn’t talking about you, there’s a reason. The reason is that you’re boring. And you’re probably boring on purpose." Jackson: Boring on purpose? That sounds harsh. Why would anyone be boring on purpose? Olivia: Because it's safe. It's predictable. You do the job, you send the invoice, you go home. Being remarkable, on the other hand, feels risky. But Jantsch argues that in today's world, being boring is the biggest risk of all. To be referable, you have to create an experience that people feel compelled to share. Jackson: Okay, but what does that actually look like? I'm picturing over-the-top, expensive gestures. Do I need to be like that FreshBooks story from the book, where they shipped a customer's favorite crackers all the way to Fiji? That's a great story, but it's not a sustainable business model for most people. Olivia: Right, and it's not about grand gestures. It's often about small, unexpected, personal touches. There's a wonderful story in the book about a woman named Nona who ordered a singing bowl from an online seller named Fabeku. When the package arrived, it wasn't just a bowl in a box. It was wrapped like a beautiful gift, with a handwritten card and a little stick of incense. Jackson: Ah, so it’s not about the cost, but the care. She wasn't expecting a gift; she was expecting a product. Olivia: Precisely. Fabeku turned a simple transaction into a memorable experience. Nona was so delighted she couldn't help but talk about it. That's the essence of a "culture of buzz." It’s about creating these small moments of delight that break through the noise of everyday transactions. Jackson: But I have to push back a little. Is that really enough? A nice card is great, but if the product is bad, the referral isn't going to happen. Or worse, it happens and then backfires, damaging my friend's reputation. Olivia: You've hit on the most critical piece of the puzzle: trust. Jantsch explains that when someone makes a referral, their brain is weighing two things: the pleasure of helping a friend versus the fear of risk. What if the business messes up? The referrer's own reputation is on the line. Jackson: Exactly. I’m not recommending a restaurant to a friend for their anniversary unless I am absolutely certain it’s going to be a great experience. Olivia: And that certainty comes from trust. The book shares a powerful story about Janine Popick, the CEO of an email marketing company called Vertical Response. In their early days, their servers were having issues. A huge client, ACT! Software, was at risk. Instead of hiding the problem, Janine called them and said, "Our service is unstable right now. You depend on this, and honestly, you might be better served by a more reliable company for a while." Jackson: Whoa. That takes guts. She basically invited her biggest client to leave. What happened? Olivia: The client was so blown away by her honesty that they decided to stay. They knew she had their best interests at heart, not just her own bottom line. That act built a foundation of trust so deep that ACT! became one of their most passionate advocates, sending tons of referrals their way. That's the kind of trust that overcomes the fear of referring. It’s not about a gimmick; it’s about integrity. Jackson: I see. So being "remarkable" isn't about being flashy. It's about being remarkably trustworthy, remarkably caring, or remarkably honest. It’s a character trait of the business, not just a marketing tactic. Olivia: You've got it. It's a fundamental shift in how you operate. And once you've made that shift, you can start building a system to guide people toward becoming your advocates.

Jackson: Okay, so you've built trust and you're not boring. You're officially "referable." But you can't just sit back and wait for the phone to ring, right? How do you systematize this? Olivia: This is where Jantsch introduces a brilliant framework he calls the Ideal Customer Lifecycle. It’s a seven-stage journey that intentionally guides someone from a total stranger to a raving fan. The stages are: Know, Like, Trust, Try, Buy, Repeat, and Refer. Jackson: Know, Like, Trust, Try, Buy, Repeat, Refer. It sounds a bit like a sales funnel, but with more steps. Olivia: It's a bit different. A funnel implies you're just pushing people through to a sale. This is more like a conveyor belt of relationship-building. Each stage has a specific job. 'Know' is about getting on their radar. 'Like' is about them finding your content or your vibe appealing. But the two most crucial stages, where most businesses fail, are 'Trust' and 'Try'. Jackson: What's the tangible difference between 'Like' and 'Trust' in this model? It sounds a bit fuzzy. I might 'like' a hundred brands on social media, but I only 'trust' a handful. Olivia: That's a great question. 'Like' is passive. It's appreciation. 'Trust' is active. It's reliance. You build trust through consistency, education, and proving your expertise over time. But the real magic happens in the 'Try' stage. This is where you give someone a low-risk way to experience your value before they make a big commitment. Jackson: A free sample, basically? Olivia: It can be, but it's often more sophisticated. The book gives a fantastic example of an architect. Architects face a huge challenge: clients are hesitant to spend tens of thousands of dollars on full plans without knowing if their project is even feasible. There are zoning issues, hidden costs, regulatory hurdles. Jackson: Right, it's a massive upfront risk for the client. Olivia: So, this architect created a $499 "feasibility audit." For that small fee, he would do a preliminary investigation and give the client a quick, expert opinion on the major risks and possibilities. It wasn't the full blueprint, but it was an incredibly valuable piece of the puzzle. Jackson: That’s genius. It's a paid trial that actually provides standalone value. The client gets crucial information for a small investment, and they get to "try" working with the architect. Olivia: Exactly. It completely de-risks the next step. By the time the client decides to move forward with the full project, they've already experienced the architect's expertise and professionalism. They've moved from 'Like' to 'Trust' to 'Try,' making the 'Buy' decision almost a foregone conclusion. Jackson: And I can see how that would lead to referrals. The client wouldn't just say, "I hired this architect." They'd say, "You have to start with his feasibility audit. It saved us so much time and anxiety." They're referring the process, not just the person. Olivia: Precisely. You're teaching them how to refer you by giving them a specific, valuable step to recommend. And once they've gone through the whole cycle—they've bought, they've had a great experience, maybe they've even repeated—they arrive at the final stage, 'Refer,' not by accident, but by design.

Olivia: And once a customer reaches that 'Refer' stage, you've successfully activated your first and most obvious network: your customer network. But Jantsch argues there's a second, even more powerful network that most businesses completely ignore. Jackson: Let me guess, the strategic partner network? Olivia: You got it. These are other businesses that aren't your competitors, but who serve the exact same ideal customer that you do. Jantsch points out that a shocking number of businesses get almost all their referrals from customers and almost none from strategic partners. It's a massive, untapped goldmine. Jackson: That makes sense. A happy customer might refer one or two friends. But a partner business, like an accountant who works with dozens of small businesses, could refer a constant stream of clients to a marketing consultant who serves that same market. Olivia: Exactly. The key is to think from the customer's perspective. Who else do they trust? Who else are they buying from? The book has this wonderful, creative example of a coffee shop in a tourist town in Colorado. Jackson: I love a good coffee shop story. Olivia: The shop was located on a stream, and they wanted to create more buzz. So they partnered with a local fly-fishing shop. Every day, the fishing shop would offer free fly-casting lessons on the stream right behind the coffee shop. Jackson: Wait, a coffee shop and a fishing guide? That's a partnership I would never have thought of. Olivia: It's perfect, though! The families would come for the free lesson. The kids would be occupied, the parents would buy coffee and pastries, and the fishing guide would get to pitch his full, paid guided tours to a captive audience of interested people. Everybody wins, especially the customer, who gets a free, fun activity. Jackson: That's brilliant. It's creating a value network. But what about more traditional businesses? How does a plumber or an electrician do that? Olivia: Jantsch describes a group of home service providers in Boise who created a joint blog called "Boise Home Repair." An electrician, a plumber, a lawn service, and a painter all contributed articles. When a homeowner in Boise searched for help, they found this incredible one-stop resource. It built trust for all of them and they naturally referred business to each other. Jackson: Okay, that's a more structured approach. But it brings up a tricky question. Partnering with complementary businesses is one thing, but what about competitors? That feels like a minefield. Olivia: It can be, but the book shares a story about a marketing consultant named Kris Bovay who was constantly losing out on big project bids. She was at an industry event, complaining about it, and a direct competitor overheard her and said she had the same problem. So, they decided to team up and submit the next bid jointly. Jackson: Teaming up with the enemy! I'm on the edge of my seat. Olivia: And they won! Their combined expertise made their proposal stronger than anyone else's. They ended up creating a formal system for joint bids, and it transformed both of their businesses. The key, Jantsch says, is to always filter any potential partner—competitor or not—through one simple question: "Would I feel 100 percent confident referring my best customer to this business?" If the answer is yes, then a partnership is worth exploring.

Jackson: It’s amazing how this all connects. It's not about a single tactic, like asking for referrals. It's about fundamentally re-engineering your business to be referral-worthy. You have to earn them by being remarkable, guide customers through a deliberate trust-building journey, and then activate these powerful networks of people who already believe in you. Olivia: That's the whole engine. It's a shift in mindset. The central question of your business moves from 'How can I get more leads?' to 'How can I become so valuable that my community does my marketing for me?' It's about building a business that markets itself. Jackson: So if someone listening wants to start building their own referral engine tomorrow, what's the first gear to engage? Olivia: I think it comes back to that idea of being remarkable in a small way. So here’s the one thing to take away and actually do: Answer this question honestly tonight. What is one small, unexpected, and personal thing you could do this week to make just one customer's experience truly memorable? It doesn't have to be shipping crackers to Fiji. It could be a handwritten thank-you note. It could be a five-minute call just to check in. Start there. Jackson: I love that. It’s not about a massive overhaul, it’s about a single, meaningful action. That feels doable. We'd love to hear your ideas, by the way. What's the most remarkable experience you've had as a customer that made you want to tell everyone about it? Share it with the Aibrary community online. Olivia: Those stories are the fuel for this whole engine. Jackson: This is Aibrary, signing off.