Systematizing Referral Business: 8x8 & 33 Touch Customization

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Chapter: Systematizing Referral Business: 8x8 & 33 Touch Customization

Introduction:

This chapter explores the science behind systematizing referral business, focusing on the 8x8 and 33 Touch methodologies. Referral business represents a highly efficient and cost-effective lead generation strategy, leveraging existing relationships to acquire new clients. We will delve into the psychological and behavioral principles that underpin the success of these systems, providing a framework for customization and optimization. Understanding the underlying mechanisms allows for data-driven decision-making and enhanced return on investment (ROI).

1. Foundations of Referral Marketing: Social Network Theory & the Strength of Weak Ties

Referral marketing is rooted in Social Network Theory (SNT), which examines the structure and dynamics of relationships within a social system. A key concept in SNT is the idea that individuals are connected through a network of strong and weak ties.

• Strong Ties: These are close relationships, characterized by frequent interaction, emotional intimacy, and shared values (e.g., family, close friends). While strong ties offer trust and credibility, their network reach is often limited due to the phenomenon of homophily (the tendency for individuals to associate with others who are similar to themselves).

• Weak Ties: These are acquaintances or casual contacts, involving less frequent interaction and emotional intensity. However, weak ties play a critical role in information diffusion and access to diverse opportunities. Sociologist Mark Granovetter’s research on “The Strength of Weak Ties” demonstrated that individuals are more likely to find new job opportunities through weak ties than strong ties, as weak ties bridge different social circles and expose individuals to novel information.

Implications for Referral Marketing:

• The 8x8 program primarily targets Met contacts (individuals already known to the agent), aiming to strengthen existing ties and cultivate advocacy within the agent’s immediate network. This builds upon strong ties.
• The 33 Touch program then maintains ongoing communication, reinforcing the agent’s presence and ensuring that weak ties remain active and receptive to referral opportunities. This helps nurture the strength of weak ties.

Mathematical Representation (simplified):

Let:

• N = Total potential referrals
• S = Number of strong ties
• W = Number of weak ties
• p_s = Probability of referral from a strong tie
• p_w = Probability of referral from a weak tie
• r_s = Average reach of a strong tie (number of people they know)
• r_w = Average reach of a weak tie (number of people they know)

Then, the total potential referrals can be estimated as:

N ≈ S p_s r_s + W p_w r_w

This equation illustrates that even with a lower probability of referral from weak ties ( p_w < p_s ), a larger number of weak ties (W > S) and a greater network reach per weak tie (r_w > r_s) can significantly contribute to overall referral generation.

2. The 8x8 Program: Building Trust & Reciprocity in the Short Term

The 8x8 program is designed to quickly establish rapport, demonstrate expertise, and foster a sense of reciprocity within a defined timeframe.

• The Principle of Reciprocity: A fundamental principle of social psychology, reciprocity suggests that individuals feel obligated to return favors or acts of kindness. By providing value to their Met contacts (e.g., useful information, personalized attention), agents trigger a sense of obligation, increasing the likelihood of receiving referrals.

• Mere-Exposure Effect: Repeated exposure to a stimulus (e.g., the agent’s name, branding, or messaging) can increase liking and familiarity. The 8x8 program strategically leverages this effect through consistent❓ contact over eight weeks.

Customization & Experimentation:

The 8x8 program needs to be carefully constructed to offer relevant and desirable “touches” that will most resonate with the targeted audience. Here’s a framework for customization:

1. Audience Segmentation: Divide your Met database into segments based on factors such as:

   • Relationship type: Past clients, sphere of influence, allied resources
   • Demographics: Age, income, family status
   • Interests: Hobbies, community involvement

2. Touchpoint Design: For each week of the 8x8 program, select a touchpoint that aligns with the audience segment. Examples:

   • Week 1: Personalized welcome email with a valuable piece of content (e.g., market report, home maintenance checklist).
   • Week 2: Handwritten note expressing appreciation and highlighting recent successes.
   • Week 3: Phone call to offer assistance or answer questions.
   • Week 4: Small, usable gift (e.g., branded notepad, magnetic calendar).
   • Week 5: Invite to a client appreciation event or webinar.
   • Week 6: Share a success story of how you helped another client (while maintaining❓ confidentiality).
   • Week 7: Provide a useful local resource guide.
   • Week 8: Directly ask for referrals, emphasizing the benefits of working with you.

3. A/B Testing: Experiment with different touchpoints to determine what yields the best results. For example:

   • Test different subject lines for emails to optimize open rates.
   • Compare the effectiveness of different types of content (e.g., market reports vs. personal stories).
   • Track the number of referrals generated from different 8x8 variations.

3. The 33 Touch Program: Maintaining Salience and Top-of-Mind Awareness

The 33 Touch program is a long-term communication strategy designed to keep the agent top-of-mind with their contacts throughout the year.

• Frequency Heuristic: The frequency heuristic suggests that individuals often rely on the ease with which information comes to mind when making judgments or decisions. The 33 Touch program ensures that the agent’s name and services are readily accessible in the minds of their contacts through regular and consistent communication.

• Consistency Principle: People are more likely to comply with requests that are consistent with their previous behavior or commitments. By consistently providing value and maintaining contact, agents reinforce their position as a trusted advisor and increase the likelihood of receiving referrals.

Customization & Optimization:

The 33 Touch program needs to be highly customized and adjusted to remain effective over time. Here’s a framework:

1. Audience Segmentation: Similar to the 8x8 program, the 33 Touch program must be segmented based on relationship type, demographics, and interests. Consider creating separate 33 Touch plans for:

   • Clients for Life
   • Advocate Appreciation Program
   • Sphere of Influence
   • Allied Resources

2. Touchpoint Diversification: Vary the types of touchpoints to prevent fatigue and maintain engagement.

   • Direct Mail: Market reports, newsletters, just sold/just listed cards, holiday cards, personal observance cards.
   • Digital Communication: Emails, social media updates, blog posts.
   • Personal Interaction: Phone calls, thank you letters, gifts, invitations to events.
   • Value added content: Investment tips, top college reports

3. Referral Reminders: As noted in the document, every single touch should have a quick reminder and instructions on how to give you referral business and identify the benefits of working with your team. This reinforces the importance of your advocates and creates a call to action for business.

4. Data Analysis & Adjustment: Continuously monitor the effectiveness of the 33 Touch program and make adjustments based on data.

   • Track referral sources to identify which touchpoints are generating the most leads.
   • Monitor engagement metrics (e.g., email open rates, website traffic) to assess the effectiveness of different content formats.
   • Solicit feedback from contacts to understand their preferences and improve the program.

4. Practical Applications and Experiments:

To demonstrate the principles discussed, consider the following experiments:

1. The “Value Added” Experiment:

   • Divide a segment of your 33-touch list into two groups: Group A and Group B.
   • Both groups receive the standard 33-touch communication plan.
   • Group A also receives bi-monthly, value-added content pieces tailored to their specific interests (investment tips, local events, etc.)
   • Track referral rates and engagement metrics for both groups over a year.
   • Hypothesis: Group A will have a higher referral rate due to increased perceived value.

2. The “Reciprocity Boost” Experiment:
   * Add a token of appreciation at strategic intervals in the contact strategy to a contact list.
   * Measure the rate of return against a similar contact group to observe the “reciprocity boost”.

3. The “Personal Observance Cadence” Experiment:

   • Implement a higher frequency of personal observation cards (birthdays, anniversaries, etc.) for a contact list.
   • Compare the rate of referral after a determined period to a controlled group that receives standard personal observance cards.

5. Mathematical Modeling & Optimization

Beyond the simplified equation presented earlier, more sophisticated mathematical models can be used to optimize referral marketing programs. For example:

• Markov Chain Models: These models can be used to analyze the probability of contacts moving between different stages of engagement (e.g., from initial inquiry to becoming a referral source). This can help identify bottlenecks in the process and inform targeted interventions.
• Regression Analysis: Regression analysis can be used to identify the key factors that influence referral generation (e.g., frequency of contact, content type, relationship strength). This allows for data-driven decision-making and resource allocation.

Ethical Considerations:

It is crucial to emphasize the importance of ethical practices in referral marketing. Transparency, respect for privacy, and genuine relationship-building are essential for long-term success. Avoid manipulative tactics or spamming, which can damage trust and undermine the program’s effectiveness.

Conclusion:

Systematizing referral business requires a blend of psychological understanding, strategic planning, and data-driven optimization. By applying the principles of Social Network Theory, reciprocity, and top-of-mind awareness, agents can create effective 8x8 and 33 Touch programs that generate a steady stream of high-quality leads. Continuous monitoring, experimentation, and adaptation are essential for maximizing ROI and achieving sustainable growth. By providing value and building relationships, you set the foundation for increased, sustainable referral business.