In this episode of Sequence Over Strategy, Michelle Warner breaks down how to engineer leads that act like referrals through relationship marketing.
Have you ever thought about how to generate leads that feel as powerful as referrals without waiting for them to come in? In this episode of Sequence Over Strategy, Michelle Warner breaks down how to engineer leads that act like referrals through relationship marketing. She explains why service-based businesses, in particular, need to move beyond traffic marketing and focus on creating meaningful, impactful first impressions that build trust and convert potential clients quickly. Michelle shares actionable insights on how to be proactive in building the relationships that matter most for your business's growth.
Check out the full episode at TheMichelleWarner.com
Hi, I'm Michelle Warner and I'm a business designer and strategist. And in the 15 years I've done this work, I've noticed the same trend everywhere. Business owners are falling into the trap of centering strategies first.
And what they need to be centering is sequence. Because the reality is the steps you take in your business and the order in which you take them is more important than how well you implement any single strategy. So on this show, my goal is to fix that by helping you find and trust your own sequence of actions rather than blindly following someone else's strategy.
Welcome to Sequence Over Strategy. And in every episode of this show, I answer a real question from a real entrepreneur struggling with a real challenge in their business so that you can see us centering those right decisions and that right sequence in real life situations. Today's question, it's asking me to go deeper on something that I talk about often.
And that's what I describe the goal of relationship marketing to be. And what do I describe that goal to be? I always say that the point of relationship marketing is creating leads that act like referrals. So this question asks, what do you mean by leads that act like referrals? And why is that the goal of relationship marketing? Well, this is a great question for a few reasons.
Number one, because it's a root cause question. And you know that I love those. Props to anyone who wants to know the why and not just the how. Because that's so important in anything that you're doing. And you have to understand the why in order to ask the right questions. And secondly, it's always the first step in any sequence over strategy process.
Understanding that why. Because if you don't understand the why, then what are you going to be doing? You're going to be grabbing strategies out of thin air and applying them to your businesses. When you can understand the why, what we're actually talking about, then you can start breaking it down and understanding what is right for your business.
And talking about relationship marketing and talking about creating leads that act like referrals, that's a really great why that you need to understand. Because it's at the heart of why you would ever consider relationship marketing. So let's get into it.
My friends, we are going to start with a quick refresher on some terms before we even get started. And listen, if you have heard me talk about relationship marketing before, which I know a lot of you have, stick around even if you've heard this. Because there's a very good reason why I'm spelling it out once again here. And that is to help you really understand that why.
So as a reminder, or if you're new here, welcome. And let's talk about relationship marketing and what I mean by that. Because when I talk about relationship marketing, it's a term that I made up to describe any marketing that centers, well, relationships first. This is incredibly common in business, especially for those of you who are service providers of any kind. I mean, think about how many clients you've gotten in the past via word of mouth.
When you first started your business, I'm sure a lot of it came via word of mouth. But what's interesting is it's not always included when you sit down and read about marketing strategies. If you take a marketing course or you Google marketing strategies or you hear anybody talking about marketing, you never really hear more than a passing glance at, oh, referral marketing or word of mouth marketing.
Aren't those leads great, but we can't really control them. So it's not talked about a ton when we actually talk about marketing strategies. And that's always struck me like it's almost like it's not counted, like it's not good enough if you're getting those types of leads. You have to be kind of air quotes marketing in order to market. And what do people mean by that? I think they mean that it's growth hacking or social media or producing some sort of content. And that's the only thing that counts as quote unquote marketing.
Well, I argue all that is called something called traffic marketing. And it really bothers me that relationship marketing is blown off in the world of marketing. And that's exactly why I talk about it so much, because almost 50 percent of business models should be using relationship marketing as their primary means of marketing.
And who are those businesses? Again, service based businesses, anybody who counts on the right leads. So you're charging a decent amount of money. You don't need a ton of leads per year. Your conversion is high. Those are the businesses who should be relying on relationship marketing. But since it's somehow discounted, I mean, I know exactly why it's discounted, because it's somehow not cool enough and it's not really easy to teach. We don't do it and we don't talk about relationship marketing. And so if you've been around me at all, you've probably heard me talk about this before. And here's why I asked you to listen to it again.
And it's that question we're addressing today, which is, you know, what do I mean? Again, when I say the goal of relationship marketing is creating leads that look and act like referral leads. Well, again, this is where the discounting of the side of marketing comes into play. Because remember how I said that 50% of businesses should be using relationship marketing but aren't? Well, here's how that actually plays out for them in real life.
If they're not listening to this episode and if they're not centering sequence over strategy, what happens is those businesses, and again, I'm talking to you service based businesses, coaches, creatives, agency owners, consultants, all of you, what happens, and I know that you will relate to this, is you start out by getting a bunch of referral sales, word of mouth, right? And business seems like it's going really well. And then you say, again, I'm sure many of you have heard this, I really want to grow this business, but I don't know how to get more referrals. I don't know how to get more word of mouth. You know, I just have to sit around and they show up at some point. So I better start, quote unquote, marketing. Again, as if what you'd been doing before didn't count. Because it does count when you're getting referral marketing. It does count when you're getting word of mouth marketing, even though it maybe feels like it doesn't count because that's not like the cool kids kind of marketing. So what do you do when you say that to yourself? When you say, I better start marketing because I want to grow this business beyond the referrals and beyond the word of mouth. I want to feel more in control of when leads are going to show up. What happens? Well, you overcorrect. And let me explain that.
In our marketing continuum, so when I think about the world of marketing, I think about a straight line. And at somewhere on that line, every single marketing strategy that exists is plotted. And what is that line labeled? It's a continuum. And I think about the whole left side of that, the 50%, the left side of the continuum is relationship marketing. And every possible relationship marketing strategy is plotted on that left side. And traffic marketing, mass marketing, is on the right side. And every single traffic marketing strategy that exists in this world is plotted somewhere on that right side. So when you picture that line, that continuum in your head, and again, every marketing strategy that exists fits somewhere on that line. And about 50% of businesses should be using the relationship side.
And when those businesses who have been using the relationship side correctly via referrals, which by the way is the most extreme form of relationship marketing, so it's all the way hugging the left side, when they say, I better start marketing to get more leads because I don't like how I'm not in control of these referral leads. Well, what they end up doing is what they end up meaning by that statement is that they better start posting on social media, buying ads, do more mass marketing. Well, what you've done at that point is you have leaped over the entire left side of the continuum and put yourself over on the traffic side.
So you have been having success being shoved all the way to the most extreme relationship marketing. You are all the way on the left-hand side of the continuum. And when you say, I better start marketing, again, you just leapfrog over the entire relationship side of strategies and plop yourself into the traffic side and start churning out a bunch of stuff.
But your business model is best set up for relationship strategies. So when you do that, when you launch yourself into that overcorrection, and listen, I get it, there is no one who loves catapulting from one extreme to another more than me. So I get it and I appreciate it. But when you do that, you usually don't see much success, right? You get really busy doing a lot of things because traffic marketing is busy. You have to produce a lot of stuff. But then you kind of look up after six months and you say, oh, I'm not getting any more leads. I'm just having a lot of conversations that go nowhere if I'm even having conversations. And then you think you failed and you think your only option is to go back to hoping some referrals come in or doing all this busy work and not seeing any leads. But you haven't failed.
What has failed is the system that continually ignores the 50% of the continuum that is relationship marketing. That's what's failed you. It's the fact that nobody has told you how to fill in all the strategies on that 50% that actually align with your business model. They haven't shown you any strategies that are relationship-based. And that, my friends, is why I state the goal of relationship marketing is not only to clue you into all these relationship-based strategies that are available to you, but to show you that that overcorrection doesn't make sense because those leads are going to act differently. Leads act differently when they come in on the traffic side versus when they come in on the relationship side.
So you need leads that act like referral leads. That is the goal. When you are on the relationship side, when you are deploying relationship strategies, you are deploying those strategies, and those strategies, frankly, land on the relationship side of the continuum because they create leads that act like referral leads. They do not create leads that act like traffic leads. I'm going to repeat that. Relationship leads act differently from traffic leads.
And so if you are a business that has relied on referral leads in the past, has relied on word-of-mouth leads from the past, and you overcorrect yourself and start using a bunch of traffic means and then you get frustrated because you're not finding leads or you're finding low-quality leads, it is because those are the type of leads that come from traffic marketing. And so instead, you need to tap into relationship strategies that will deliver you leads that act like referral leads. And when you do that, you're going to immediately see the difference and you're going to immediately understand why it's important to know what strategies you can fill in on the relationship side of the continuum because when you do that, when you learn how to take a baby step off from the extreme left-hand side, I call it demagnetize yourself from those referral leads, and you learn how to actually do some marketing that creates leads that act like referral leads, well, what have we done? We have two wins right there.
I'm going to repeat that. When you learn relationship marketing strategies that are going to bring in leads that act like referral leads, what do we have? We have two wins. Number one, we get you more leads. And number two, we get those leads to act in the way you need them to act. And we put you in control while we're doing it because the only problem with referral leads, the only problem is that you are not in control of them, right? You don't know when they're going to come in. Otherwise, most of you in service-based businesses would happily live on referral leads all year long because when a referral lead meets you, what's already happened? How do they already ask? When they meet you, they come in and they have heard praise about you. They have trust in you. They have confidence in you because whoever has sent them to you likes you and thinks you did a great job and thinks you're a great person and thinks your business knows what it's doing. And so when a referral lead comes in, when a word-of-mouth lead comes in, they're already pretty well sold.
They're going to give you the benefit of the doubt is the way I should say it, right? They are already bought in to an extent. Yes, you still have some marketing work to do. Of course you do. But they're already bought in. And they're going to give you the benefit of the doubt. And this lines up with what you need when you have a service-based business or, again, other business that's lined up well with relationship marketing. You need those people to come in already trusting you and already giving you the benefit of the doubt because that's going to then fit in with the model. That's going to result in quality leads that convert at a high rate. And those are the businesses that need relationship marketing. And by the way, the opposite is true of a traffic lead. If a relationship lead meets you and is already trusting you, already has confidence in you, is already giving you the benefit of the doubt, is excited to meet you, well, the opposite is kind of true of a traffic lead because when a traffic lead meets you, what's already happened? Barely anything. And that's also by design.
There's nothing wrong with that if your business is aligned with it because if you're a business that needs traffic, that needs 10,000, 100,000 leads a year, you don't have time to create a bond with everyone when they first meet you. You need numbers, right? You'll create the bond later, but initially you just need numbers. And so you have to market in a different way that is going to result in a lot of numbers getting into your funnel.
So again, to loop all the way back to the original question, what do I mean by a lead that acts like a referral and why that is the goal? What I mean is that we need leads that come in prepared and ready to work and prepared to be excited and prepared to give you the benefit of the doubt and come in ready to see if you are a match to work together, not wondering who you are. We need a lead that comes in already bonded to you. And spoiler alert, no matter how much you wish it did, this is not going to happen for the vast majority of us, the vast majority of the time, from a social media post or from an email or from a brief interaction.
Yes, there are going to be exceptions, but for the vast majority of us, the vast majority of the time, nobody is encountering you on social media. Nobody is encountering you via one email and coming in and acting like a referral lead. It's just not enough.
So again, when I say a lead that acts like a referral lead, I mean I want to engineer my marketing strategies so that even though someone isn't going to refer that person to me, even though I don't have that trusted person out there sending them directly, my marketing is going to do the same job. I will leave whatever marketing strategy I deploy when I meet that person is going to leave such an impact on them that they will leave that encounter with the same strong feeling as they would if they were referred to me. So I'm going to repeat that.
My goal is that when that person first encounters me, whatever I do in my marketing strategy is going to lead the depth of impact on that person that would be equal to the depth of impact that would happen if their friend or their colleague referred them to me with all the praise and all the trust and all the confidence boosting. Now that's my job. That is my job to do in marketing is to figure out how can I put myself in a position to meet people that leaves that similar impact. And that's what we're doing in relationship marketing. We are not trying to meet everyone and anybody. We are trying to meet the right people and do enough when we meet them that it is the equivalent of somebody who they already trust telling them to come work with us.
So what does this mean in real life? Let's share some real life examples and comparisons so you can see this illustrated and you can start to play it out in your mind because I'm sure you've experienced both of these consumers. So I invite you to reflect on your own behavior as a consumer, as a potential client to see where you've encountered someone or some brand and how loyal you were in that moment and how well that person or that brand did in creating you as a lead that would act like a referral lead. So let's think through two relatively common scenarios.
First scenario, you're scrolling through LinkedIn and you see a compelling post. Or heck, let's say it's even a live video. It's a live video that lasts 10 minutes and you happen to catch about two and a half of those in real time. There's no real interaction with the host. The host is just talking live. Maybe they're answering a question in the comments, but there's no real interaction. And afterward, the host invites you to download a PDF or take a quiz. And again, you caught about a quarter of this. So what's the experience there? And before we talk about that, I'm going to pose the second scenario.
So picture this one. You're a member of a mastermind group of some kind. And the host and owner of that mastermind invites a trusted colleague to come in and offer an hour-long training session. It's free for you. It's part of your membership. And, you know, it's a pretty small group. And so in that hour, you get to learn something that's very specifically relevant to you and the teacher is interacting with you, answering your questions live, you know, getting their hands dirty with you. And you've never seen them or their work before, but they really help you in that moment. So what's that experience like? And again, spoiler alert, in scenario one, there's not a lot of trust or loyalty built, right? Because if you even remember having seen those two and a half minutes of a 10-minute live video, if an hour later you even manage to remember having seen that, and in our attention economy, that's a question, well, then maybe you follow up with the PDF for quiz that the person offered. And maybe, maybe somewhere down the line you make it all the way to purchasing something from that person. But if you do, you are the outlier, right? That person did a lot of work between that initial reaction and getting you to buy. However long that took, whether it was a month or two months or six months, that person put in a lot of work in between you happening to come across that two and a half minutes of that 10-minute video and you deciding to make a purchase from that person.
And again, you're gonna be the outlier there. The conversion there is gonna be under 1%. They're gonna have to have had a lot of people have that similar experience, and then they're gonna have to have done a lot of work in between to get you to buy something.
And again, that can be appropriate for some business models, but for business models that are in alignment with relationship marketing, that is a slog, right? That's a really big ask. But scenario two, that looks different, right? If that person helped you, you spend an hour with them, they really were able to understand your situation and get in there and answer some questions for you. They taught you something really specifically useful for you. And bonus, the person who runs your mastermind who you've already been a part of their program, they tell you that they clearly trust them because they trusted that person to come talk to their people. So there's a trust there. There's a real good reason to give that person the benefit of the doubt. And not only that, but then you show up and you help them a ton. Well, if that happens, you're probably hiring them on the spot or pretty close to it, right? And what did you do right there? If you hired them on the spot or if you hired them after one or two conversations, well, you just acted the same as a referral lead. And whoever went into that mastermind group to teach, they just did their job of relationship marketing.
They went in and they met you and they had an impact on you that made you act like a referral lead. But they were in control of reaching out and booking that teacher slot and booking that relationship that allowed them to build trust with the owner of that mastermind that got them the invitation to come in and teach. They were in charge of those things. They didn't have to sit back and hope that some referral came in. They were in charge of marketing strategies that put them in that position to have an impact on you to cause you to be ready to buy quickly. And that is what I mean by engineering leads that look like referrals. You, as the business owner, are doing the work to meet people in a way that has a ton of impact and lasting power. And by doing that, you are engineering leads that act like referrals. You're not sitting back and waiting for referrals to come in.
Instead, you're saying, how can I build relationships? How can I build momentum that puts me in a position to have impact on people and that impact is enough to make them act like they were a referral? You're in charge of that. And those are the marketing strategies we don't talk about. Those are the marketing strategies that you never see if you just Google this or if you're just in spaces that are talking about how to get social media traffic up. They're not talking. They're ignoring that entire 50% of the continuum that is relationship marketing strategies. And those are the strategies that allow you to book some of these teaching gigs or that allow you to put yourself in a position where people bond to you right away and are ready to move.
And that's what I mean by the goal of relationship marketing being creating leads that look like referrals. I mean, we are going to talk about strategies that put you in those positions. And that's why I have networking that pays the course, right? Because that teaches you how to build those relationships with those owners of the mastermind groups or the owners of conferences or the owners of wherever you want to be so that you can put yourself in those positions. Because that's what we're trying to do. We are looking at what does a referral lead look like? We are reverse engineering the feelings and the emotions that that person is receiving when they receive a referral. And we're saying, hey, how can we proactively go create those? That's it. That's what it means. It's a relatively simple concept. It can be a little, you know, not easy in its execution, but that's okay.
But when you understand that why, again, when you understand that sequence of what we're trying to do and you break down the sequence of what creates a referral lead, then you can start understanding which strategies make sense and which maybe don't make sense in order to create that bond we're looking for. So let's sum this up. Why is the goal of relationship marketing to create a lead that acts like a referral? That was the original question. Well, hopefully I've now convinced you of that why. And the answer is because it's what relationship marketing is all about, right? Because 50% of businesses, most of them on the service side, are at their most efficient and most profitable when running on referrals and word of mouth. But there's a big but there. And the big but is that there often aren't enough leads. There often aren't enough leads coming in via pure referrals or word of mouth. So we need to go find leads that look and act like that instead of overcorrecting onto the traffic side and getting leads that don't act the way we need them to act.
We need to learn and need to expose what it looks like to use relationship marketing strategies to engineer a lead that looks and acts like a referral lead without the issue of having to sit around and wait for those to come in. We want to be able to be proactive about it. And to be proactive about it, we have to understand the psychology around what has happened to a referral lead and say, how can I create that without waiting for someone to make it happen for me? And that is completely possible.
Starts with building the right network and networking that pays. And then it starts with putting yourself in a position to get in front of these people so that you can have the impact on them. So that, my friends, that is why the goal of relationship marketing is, again, to create leads that act like referral leads but don't require you to sit around hoping that one will come in. And how we do it is by paying a lot of attention to how we meet people and not letting how we meet people be the lowest common denominator happening to run across them, happening to have them have a brief interaction with you. That's all for traffic marketing. That is 100% correct for businesses that are in alignment with traffic marketing. But most service-based businesses aren't. And I know most of you who listen to this are service-based businesses. So we need to demand impact at that first moment of meeting folks. All right. I'm gonna invite you to reflect on the marketing that you are doing now, invite you to reflect on experiences you've had in the past where maybe somebody had a lot of impact on you when you first met them and it caused you to act like a referral lead. Because the noticing of this is going to really help you.
So if this is a new concept for you, if you're still trying to wrap your brain around it, start noticing when this is happening to you. And then you're gonna start seeing opportunities, of course, to bring it into your own business. And with that noticing, I'm gonna thank you as always for being here.
If you haven't yet done it, please subscribe and even rate the show wherever you're listening because it's gonna make a huge difference in others being able to find it. And hey, if you know some colleagues who might be struggling with this concept, who you see kind of overreacting and overcorrecting over onto the traffic side, please share this episode with them. I want every service-based business to know and understand relationship marketing and why it's important so that we can start getting those businesses stable and bringing in the leads that they need.
As always, you can always find me at themichellewarner.com. On that homepage, you're gonna see an opportunity to sign up for the newsletter, to come to my free monthly round table, even to take the free training for networking that pays so you can start learning how to build a network that will help you get in the right place at the right time to have impact with your people. And I invite you to do all of that. I would love to see you there.
I'm so happy you're here. Drop me a note as always if this episode helped and I will see you back here in two weeks.