Your travel agency may already be receiving a few referrals from time to time, but that’s not enough in today’s business climate. Travel sellers should make generating referrals a key strategy – not an afterthought, according to marketing consultant John Jantsch.

Referrals are not only a cost-effective means of capturing new clients but a tool that forces businesses to boost their performance, said John Jantsch, author of The Referral Engine (Portfolio, 2010), which aims to teach business “to market itself.”

Travel Market Report talked with Jantsch about why travel agents should take a systematic approach to generating referrals and how to do so.

Why are referrals an effective marketing tool?
Jantsch: In many respects, referrals are the best kind of marketing. In some cases you can receive a referral without engaging in other forms of creating awareness for your business.

John Jantsch

And if you’ve done a good job of educating your customers, then their referrals will come to you expecting to pay a premium for your services. The education process has created a more qualified customer.

In travel, many agents specialize in providing over-the-top service. If a person wants that, and his or her friend says a particular agent has that, then that will be the end of the search for that new customer.

How important are referrals in selling travel?
Jantsch: Referrals take out the price shopper mentality.

For many industries, and travel falls into this, you’re dead if you’re not generating referrals. They are a significant part of business, because it’s so expensive to make the phone ring any other way. In many cases, referrals are the lifeblood of a business.

For agents to remain in business, they have to differentiate themselves. What they have to sell is service and creativity. That’s how they can differentiate themselves, and it’s one of the keys to getting referrals. They need customers who rely on that difference to tell their story.

So how can agents generate more referrals?
Jantsch: Generating referrals is a key strategy, not just an afterthought. It involves reverse engineering. Most people look at referrals as something to do after someone has been a client.

Start with the referral in mind and work backwards. For instance, if someone books a trip with you, think of what you want them to do, say 30 days or 90 days after they return. What do you do to create touch points?  

A touch point could be an email, a phone call or a brochure – something related to their trip that provides a chance to go over how the trip went and how it could have gone better. It’s anything you can do to improve the overall experience and communication.

Give us some examples of referral-generating tactics.
Jantsch: You might want to host a special event featuring an expert on a particular topic and invite only existing clients and their guests.

Partner with a nonprofit organization — maybe write a check or have your staff volunteer. Once or twice a year come up with a promotion in which a portion of the proceeds from trips booked at a certain time go to that nonprofit partner.  That gives the nonprofit a valid reason to introduce their constituency to your business.

You can also pay bonuses to staff based on the number of referrals they get from clients. Anything that can be tracked can be tied to bonuses.

Another strategy is to simply start talking about referrals with clients upfront. Introduce the idea of referrals when someone wants to book a trip with you. You’re basically promising they will have a great time and making sure that they do. You then set the expectation for them to refer you to others.

Isn’t discussing referrals at the start of a relationship risky?
Jantsch:  Some people say it’s begging for referrals, but what they’re really saying is they’re not sure they can provide good service. After all, if you’re not already getting some referrals, you’re doing something wrong. The answer is to up your game, make yourself more referrable.

When businesses make generating referrals a key strategy, it forces them to have everyone in the business provide a great experience for customers.

How is social media relevant to receiving referrals?
Jantsch: One of the reasons for embracing social media for travel agents is really just for the ease of communication. These are the tools people choose to communicate, so you have to be there. Facebook is incredibly important for travel in particular. It’s the way people share experiences and photos.

But social media can also be used as a referral vehicle. For instance, look at those clients who are active online and target them for a special promotion. They will share that with their family and friends.