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The Double Edged Sword of Referrals
By Scott Susor


Ask mobile DJ's the best source of advertising for his/her business and the most often heard reply will be REFERRALS.  Referrals, of course, come in different forms.  Sometimes they are your own repeat customers.  Sometimes they are people who attended an event you performed at.  Sometimes they are the friend-of-a-friend of somebody who has seen you perform.  Sometimes they are other event professionals - venue owners/managers, photographers, caterers, etc. - who have worked with you at some time in the past.

Indeed, with essentially no "cost" to you, the "referral method" of advertising can and does become very important to the competent and successful mobile DJ business.  It reduces your costs.  It supplies you with what everybody selling a product or service yearns for - "warm calls" from prospective customers who are already "sold" on you.  It fills your calendar!

Its such a beautiful thing that many veteran DJ's - both single-op and multi-op - have all but abandoned conventional advertising.  How do we know this?  Well, besides openly bragging about how they "don't need to advertise any more" one needs only to peruse the Yellow Pages, visit a bridal show, or surf the Internet.  What you find is a relative lack of advertising in comparison to the total number of mobile DJ companies operating in a given geographical area.  In fact, when you DO see advertising, you can bet that it comes from a certain type of mobile DJ business in over 90% of the cases.

Who advertises?  New single-op start-ups are, by far, the heaviest advertisers.  And this is quite natural because they are trying to create a place for themselves in the market.  Second to start-up single-ops are expanding multi-ops.  Again, this is quite natural because they have probably recently invested in equipment purchases and new employee hiring/training and they need to accelerate recouping that investment.  One other type of DJ also advertises rather heavily - the incompetent and/or fraudulent DJ company.  They HAVE to, in order to attract business because they get few or no referrals.

OK, now let's step back and look over that group of mobile DJ's who do a lot of advertising.  Do you see anything they MAY have in common?  Give yourself a star if you said, "low quality."  Not that every start-up single-op or every new employee DJ of a multi-op is "low quality" but, as a group, they would certainly rank lower in terms of "business experience" than those who have been in the business for a while.  And the incompetents and frauds speak for themselves in this context.

What does this mean to the consumer?  Many of our industry leaders love to talk about "educating the consumer."  Most often this is tied to cries for higher rates, but not always.  But have any of us really thought about how our NON-REFERRAL consumers are expected to find us?  If you're the best mobile DJ in your market, but you don't allocate a lot of money to advertising, how will the "uninformed" (i.e. non-referral) consumer learn of your existence?  Dumb luck?  That would be the ONLY way for most non-referral consumers to happen to hit upon YOUR company in their search for a DJ.  And who does that mean will get most of the calls from this vast segment of potential customers?

That's right! - The group who DOES advertise!  And who are they?  The DJ's with the highest probability of being on the LOW end of the quality spectrum - new single-ops, expanding multi-ops, and incompetent/fraudulent DJ's.  And it happens for one reason, and one reason only.  Because many of the industry veterans, its "leaders," have decided that MORE REFERRALS MEAN WE DON'T NEED TO ADVERTISE, EITHER AT ALL, OR AS MUCH.

What effects does this have?  Well, the first is obvious and has already been stated.  More gigs going to low quality DJ's than warranted.  And there is a secondary related effect of this also.  All those clients and guests that get stuck with a low quality DJ now have a less-than-stellar perception of mobile DJ's in general.  Is this a problem for the high quality DJ's?  If you don't think so, you'd better think again.  While you're out there booking and doing jobs on close to a 100% referral basis, many of your competitors are in the process of ruining YOUR reputation.  No, not in terms of a DIRECT attack - it's a "stealth attack."  And most often, neither they nor you are even aware that this is what's really going on.

Ask yourself - Why does Ford advertise heavily?  McDonald's?  Holiday Inn?  Wal-Mart?  Certainly they have lots and lots of satisfied customers who will come back again and again.  Certainly those satisfied customers will refer other customers.  Certainly they have a true presence in their respective markets.  So, why spend so much on advertising?  Is it to get more customers?  Well, yes it is.  But there's another far less obvious reason - To keep POTENTIAL customers from going to their competitors!  And think about this.

What if Ford stopped advertising?  Then another car company, then another?  Gradually, more and more of the car business would go to the companies that continued advertising.  This would allow the advertising companies to gain some pretty significant financial advantages for their stockholders.  In fact, it would lead to monopoly if allowed to continue unimpeded.  Would the advantaged car company decide that profits were, at some point, high enough and it was now time to spend money on improving their products and services? -- Not a chance.  Instead, they would seek ways to cut even MORE costs, probably in terms of product/service quality for a start.  Yes, this might lead to a lower price for their product/service, but what they lose in quality they'll more than make up in quantity.

Let's now refocus on OUR industry.  If the "leaders" don't advertise, where do first-time buyers go?  Well, by dumb luck, a few might go to those industry leaders.  But the vast majority will go to DJ's who are easier to find - those that ARE advertising.  Make no mistake.  Advertising and marketing cost money, lots of money.  But it's also an investment - an investment in the future of one's company AND in the future of one's industry.  Without advertising by the leaders, the followers will gradually make themselves more and more of a market presence.  And the more low quality DJ's that get more business than they deserve the more prices for the entire industry will be artificially suppressed.

You want higher rates for your mobile DJ services?  Maybe it's not just a question of charging more and "getting what you're really worth."  Maybe it's a question of "defending your own territory" by ensuring that you DON'T just depend on referrals to fill your calendar.  Maybe you should consider spending more on marketing and advertising in order to truly justify that higher rate.  Maybe what's going on outside the confines of your own business is as important as what goes on inside, in terms of reaching for the "brass ring" of your company's financial success and your industry's consumer respect.



Scott & Doreen Susor are the Owners/Operators of "Your DJ" Professional Entertainment Services in Houston, Texas


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