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Selling social to the C-suite: The power of referrals

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Brands & Campaigns

This post was written by Troy Janisch and Mark Anderson. Both contributors have two decades of digital marketing experience and lead social-media activities at American Family Insurance, a Fortune 300 company. Janisch blogs at and Anderson shares his art at

If you want corporate executives to understand the value of social networks, you need to move discussions from ROI to COI.

When executives ask about the return on investment for social media, they’re asking “How much money will we make today?” It’s like measuring the the amount of water in your kitchen by what coming out of the tap at any given moment. A better way to measure the effectiveness of social media is to look at centers of influence — which is more like measuring the amount of water in your kitchen by considering every drop that can be delivered by the water company.

Centers of influence are people in the community that generate sales for your business through referrals. Sometimes they’re customers. Sometimes they’re not. Some are members of your target market who influence their peers. Others operate complementary businesses and share their customers. They are well connected. They have ability to generate large volumes of business for your company by referral — and they’re online.

When you describe social networks to executives, define them using the referral opportunity they represent:

Facebook: The largest referral network of consumers in the world. Boasting more than 500 million worldwide users and 140 million users in the U.S., Facebook is the best place for consumers to share brand-related experiences with their friends and family. The average Facebook user has 130 friends and shares 90 pieces of original content each month.

Twitter: The loudest referral network in the world. Twitter has more than 150 million worldwide users and 28 million users in the U.S. What Twitter lacks in size, it makes up for in volume. It’s the largest public forum for consumers and it’s the first place that its users go to praise or complain about brands. For many companies, Twitter plays the largest role in proactive customer service because Twitter search makes it easy for companies to find and respond to all brand-related conversations on the site.

LinkedIn: The largest B-to-B referral network in the world. LinkedIn has more than 80 million worldwide users with about half of its users outside the U.S. LinkedIn attracts and connects business professionals, business owners, salespeople and corporate decision makers — making it one of the best resources for fostering COI relationships.

The goal of an effective social-media program is to attract, gather and nurture COI and customer relationships that will generate ongoing referrals, increased awareness and future sales.

Social pro John Jantsch, author of “The Referral Engine,” says people are psychologically hardwired to give referrals and accept the recommendations of others. He says exchanging referrals give us pleasure and makes us feel more connected to the world around us.

Personal relationships that are loosely maintained on social networks build social capital and drive an informal, but powerful, quid-pro-quo referral engine. Referrals are valued by social-network users as a credible alternative to time-consuming research. Referrals are valued by business owners because they result in more sales over the long haul and a shorter sales cycle.

“Digital interactivity in now the center of marketing and every business needs execute effective marketing,” notes Jantsch. “I think social media changes the game in several ways. On one hand it makes it easier to pass a referral, but since trust and reputation are the reason people act on referrals, it means that actively monitoring, participating and engaging through social-media channels is essential.”

Image credit: Mark Anderson