#97: Howard Partridge: $0 to $52 Million with No Ads, Just Referrals

0:00My guest today on the StoryBrand podcast is Howard Partridge, who is an old friend. Howard grew up in Mobile, Alabama, living on welfare, knew nothing about the business that he would ultimately get into that has made him a multimillionaire, didn't leverage because he loves people so much his success into coaching a lot of other businesses on how to grow their business. And a significant part of how he helps people grow their businesses by helping them understand how to create a referral system. We all know about referrals, but do you have a system? His new book is called Referrals Made Simple.

0:32I am honored to have written the forward for this book. It's available on Amazon now. Howard, welcome to the program. Thank you. Glad to be here. Always great to be here. You're listening to the StoryBrand podcast based on Donald Miller's bestselling book, Building a StoryBrand. The StoryBrand framework is made up of seven key elements, all of them anchored in one powerful idea. Your customer is the hero and you are their guide. Each week on the podcast, you'll get exactly what you need to craft clear messaging that connects with more customers and grows your business. Now let's dive in with your host, Donald Miller.

1:1523 years old, and there's a friend of the family, same age as me, tooling around a little red Mercedes convertible, and I said, I want to know what that guy does, and I want to know if it's legal. well it turned out he had a cleaning business and so we got three thousand dollars in wedding money i went back to houston after our wedding and i started my first business out of the trunk of my car we say cleaning business they're cleaning rugs furniture yeah so that company i own two of those now i own one in south carolina one in houston same one in houston first one i still own but we work in all sorts of different industries so i don't want to get caught up in that industry but very high-end rugs.

1:55Gotcha. Like for some of Houston's most prominent citizens, celebrities, George and Barbara Bush were clients of ours before they passed away. And then about 30 years ago, I started coaching other small business owners in that industry and then expanded into 100 different industries in 20 countries. You mean, what do you mean, 100 different industries? You own parts of companies in 100 countries? No, no, I coach in 100 different industries. Gotcha, gotcha. So you've understood how business works from multiple angles. Right. The same systems that work for me work for a plumbing company, work for an HVAC company, work for an architect, work for a credit card processing company, a pet groomer.

2:42You know, they're all the same systems. Okay. We're going to talk about your new book, Referrals Made Simple. Okay. And a lot of people would say, well, referrals in the age of AI and meta ads and all that kind of stuff, referrals just don't seem like the sexy way to go about growing your business. It's also like it feels like it's out of your control what people are talking about and whether or not they're talking about you. The reality is I would actually probably say what's true, you tell me whether or not this is true. Yeah. You think you're growing your business by being found on AI. You think you're growing your business with advertising.

3:23You think you're growing business with emails and sales funnels. It's probably more dependent on referrals than you think. Not that that stuff isn't effective. Right. But I would imagine, like even for my business, we do meta ads, we do emails, we do all sorts of, we do this podcast, we do sales funnels, We do free lead generators, all that kind of stuff. We do all that stuff. I bet you 40 % to 50 % of my clients are referrals. Right. Yeah. You know? Yeah. And so it's, but because we can't get our head around it or we don't know how to do it or nobody's created a system, which you did in this book.

4:00There you go. That's the key word right there. Yeah, a system. Yeah, that's the key word. So everybody's going to agree that a referral is - 10 times better than a meta ad. Yeah, that's my favorite way to get a new client. but they have no system to do it. You know, we're all going to say, yeah, all the business is about relationships. Referrals are great. We love referrals. Don't keep us a secret, but they have no system. And so in this book, what I do is I've basically given a playbook of what I did in my companies. So that same company that I started out at Chunk of My Car. All the way back.

4:35You're the trunk of your car. You got a cleaning company. Did you learn from anybody how to clean a couch or clean a rug or you just? nah we just winged it the whole time of course did the guy in the sports card the whoever had the nice card did he teach you or somebody else teach you no no i really i mean i never really saw that guy again i mean i saw him once yeah once or twice i went to all the certification courses i got really involved in our industry but what i did is since i was new and i didn't know that much. I learned actually from my dad and my stepmother had an interior design firm and they started sending me referrals.

5:16And I wanted these people to keep referring me and because people, they would refer to me, would refer to other people. You figured that out right off the bat. Yeah. So I started a reward program. And so I started rewarding them. And then I just learned how to network and what people don't understand about networking and building your network it's a system and so you put referrals right in there with just building relationships and community and getting to know people and joining other networks and all that kind of stuff yeah but there's a specific way to go about that so get this done i'm right i'm gonna so this company This company generates$4 million a year.

6:00What's this company? The first one. The first one. Gotcha. How long did that take? Well, it's been building over the years. Right now it's$4 million. Gotcha. Yeah, right now it's$4 million. In some years, up to a million dollars of that is from referrals. Quarter. No ads. And the rest of it, the other 65 % to 75 % is from repeat clients because the other thing that I do and that I teach people is stay in touch with your existing clients because who's going to be the first one to refer you, right? So half of our referrals come from our existing clients. The other half come from what I call the secret of record sales and profits.

6:41Let's get to the stay in touch with existing clients first. And then I want you to tell everybody what the secret is so they don't have to buy your book. All right. You mean so that they will buy the book? Yeah. How do you stay in touch with existing clients? What are some things that you do? Emails twice a week. Two emails a week. Two emails a week. That's what we do in our company. What do those emails say? Value. Here's how you take care of your valuables. Let's say you own a pet. Here's how you take care of the rug or whatever. So I have a client who is, well, let's just take one of my clients, for example.

7:18She has a pet grooming shop. So she wrote a little ebook on how to groom your pet, things that you don't want to do. So in that particular business, how to care for your rug, how to care for your carpet, how to care for your upholstery, you know, what to look out for, how to select a professional cleaning company. But what I realized is that that education process, any company can use. Yeah. You know, how do you choose a plumber? What happens if you have a lead? What happens if we work with a lot of restoration companies? what do I do if my AC doesn't work? You know what I mean? And so you're the guy who is the consultant, the one who's educating the consumer.

8:01So naturally, I'm going to go to you if I have a question, right? And these are emails. These emails aren't trying to close a sale or anything. They're just building relationships and giving away free value. Yeah. Now, we'll have a special offer for the month, but that's beside the fact. The other thing that's in every single email is get free cash or free service through our referral reward program. Gotcha. Yeah. And that's in every email. Every email. Every mailer. Does it work? Yep. I mean, I know you're doing well, but do people, you know, if you're a multimillionaire and you got somebody cleaning your Persian rug, are you really getting your$100 discount?

8:43No. No. Sometimes you do. But here's the secret that people don't know about a reward program. It's not that people go, oh, man, I spent, you know, a thousand dollars with them and I got a hundred dollar referral certificate that I can cash in or use towards services. I just appreciate the fact that they acknowledge me. Wow. Yeah. Because nobody got a little dopamine associated with nobody's saying thank you. Yeah. So they got plenty of money. They don't want to take, you know, money from poor Howard, you know. So they put it in their file and guess who they're going to call if they have three or four or five or 10 of those certificates.

9:25Yeah. They're going to call us. Right. So then they're going to pay for their job with those certificates. And they do that. And they do that. Yeah. But here's the cool thing. Less than half of those certificates, not only in my companies, but also our hundreds of coaching clients, because many of them have implemented all this stuff. They've grown their business. I have one guy went from zero to$52 million in referral marketing, no ads. $52 million. I have a young couple in Florida. What's his story? What's the$52 million story? Restoration and reconstruction. Gotcha. And so they have seven referral marketing reps that are going out using my system to call on referral sources like plumbers, like construction people, anybody who's in a position to refer you.

10:19They're building that relationship. And so he studied under me and used all my systems to do that. Another couple, young couple, she wasn't even 40 yet when they sold their company. They became millionaires. She wasn't even 40 yet. Because even though they had started with us at$65 ,000, they'd done$65 ,000 the whole year. They went to over a million dollars a year, sold that business, by the way, through referrals, by the way, to a referral partner. That's the ultimate referral. Yeah, became millionaires. Yeah. She wasn't even 40. Do you ever wonder why some marketing instantly grabs your attention while other marketing you just ignore?

11:05It's not about luck. It's not about a bigger budget. It's that the marketing that works actually follows just a few simple principles that actually makes it easier to understand, makes it memorable, and most important, impossible to overlook. That's why StoryBrand has a free guide, the four rules of messaging that will teach you those principles. In just a few minutes, you'll have a simple framework for evaluating every message you create, from your website and emails to your ads and sales conversations. Download your free copy of those four rules today by clicking the link in the show notes. All right, we got to get into this system.

11:42Okay. What is a referral system? Let's say, I don't know, let's say you sell clothing. You bought me a sweater as a gift because you know I'm a sweater fiend. Let's say you sell sweaters. What's your counsel to them on a referral system? Walk us through it step by step. All right. First of all - Sammy's sweaters. All right, Sammy's sweaters. Okay, Sammy. All right, so the first thing is you got to understand that all of business, all of life is about relationships. So if you don't have that mindset, if you look at referrals as transactional rather than relational, then you're just an affiliate marketer.

12:24That's all you are. It's just transactional. What does that mean though? Does that mean you actually have to care and invest in these people's lives and get to know them? Yeah, that would help. But I'm serious about that because there's a lot of people that's a counter. One thing that is true about a lot of high D, high motivated, going to succeed, going to win, they're not as relational. And I remember one of my business coaches once said to me, he said, Don, you know what your problem with relationships is? And I said, what's my problem with relationships? He goes, they're not profitable. he goes relationships aren't profitable and that's why you struggle you can't figure out why we're meeting and having coffee but they are you know how does it affect the bottom line well i'm glad to hear it from your from your from your side yeah well he i think he meant like you're really good at business relationships but when it comes time to having a core group of friends or whatever you can't figure out why well there's a lot of successful people like that yeah Yeah, yeah, yeah.

13:22Okay. But the other way is true, too. You're saying like, hey, because as I get older, I'm realizing, well, I don't want my life just to be about winning in business. I want some deep relationships. That's true. But here's the thing. You don't have to be best friends with everybody that you build a relationship with. What I mean by that is you have to be a good networker. So everybody's heard the old phrase that your network equals your net worth. Yeah. And that is true because it's not what you know. It's who you know. Yeah. But it's not who you know, but it's who knows you. And it's not who knows you, but it's what they know about you.

13:58And so you have to educate people. When you get in touch with people, you have to make sure that they know who you are. And it's not who knows you, but it's who you know and what you know about them. Right. Meaning like you know what to call them for or what do you mean? Well, you might know what kind of sweater they like. Gotcha.

14:27So, and you know what's interesting is there was a woman who worked for us for years. It's such a great job. She went on to do bigger and better things. You know, we get a lot of people who want to work here. Yeah. She actually sent a gift to, at that time, every single member of my staff. Every single member. And it was all, like, I got this, like, camping kind of thing. She knew I was into camping. and she ended up working for me for like 10 years. Look at that. And we probably wouldn't have ever interviewed her, but I'm like, well, we should probably talk to her. See, you should probably talk to her.

14:59Yeah. I could tell you a million stories about just that, but the thing is that let's take the high D that's not relational. Right, or doesn't think they're relational, yeah. Doesn't think they're relational. They're about results. So let me ask you a question, high D. would you like to get better clients and make more profit with less investment uh yeah you might not get to talk to anybody but you're gonna get a high i an id that can go out there and build relationships with people okay so just from a uh basic standpoint you need to have a networking system so in the book what i do is i share in the book by the way if you just tune in It is referrals made simple, available on Amazon.

15:48Yep. And so I have a system. Every room that I walk into, for example, and I share this in the book, I have a system of every room I walk into, every street that I walk down, every hallway that I'm in, I'm paying attention to who's in that room and who I want to connect with. By the way, how did I meet you? boy it's been so long Howard I watched which well first of all we had a conversation in front of 240 people yeah because I raised my hand and you asked me a question and we had this conversation and you said uh you said where are you from I said Houston he said and you said me too I said I know Pearland right wow yeah right yeah and then I watched uh which side of the stage you left from and I made sure that I was just kind of hanging out in the hallway when you walk by.

16:46So then I asked you if you would come and speak and you told me how much money it would be. And then you passed me off to your assistant who passed me off to the sales guy. Okay. And then two days later, I gave you a gift and that gift was a stack of my books. And I pointed out a name of someone who had endorsed my book and you looked at me and you said you think you could get a group of people uh business owners 100 business owners together in houston for me and i was like sure that's how it all started yeah yeah that was years ago yeah close to a decade yeah yeah and we've been great friends ever since yeah and we've done a lot of great stuff together it's helped a lot of people yeah so that's just an example of networking people think networking is going to the chamber commerce meeting here's my business card it's not if you go to a chamber meeting wherever you go or a conference or whatever what you're doing is you're intentionally connecting with people and you're finding out about them you're asking what i love to ask people is what's your story I ask a couple of your people here that today.

18:00Okay. What's your story? And so then you exchange contact information. I don't even talk about myself or my company until they ask me. And then I say, hey, can we follow up for coffee? Or I just put them on the list. And so every single person that I meet, I have a system to stay in touch with them. So walk through that. So your system sounds like, first of all, get out there and meet people. Yeah. Network. Second is stay in touch with them. Yep. So did we get into your system on how to network? Just sounds like be in the right place, know a little bit about the person that you're talking to. Yeah.

18:43Be curious about their story. Everybody's out in the marketplace. Yeah. Everybody's going to conferences. They're going to meetings. And you can go to the meeting and be checking your phone the whole time. and, oh, the speaker was good, the food was good or not good or whatever, or you can intentionally be connecting with people. Gotcha. So that's what I teach how to do in that book. In Referrals Made Simple. In Referrals Made Simple. All right, and now how do you stay in touch with them? What's your system for staying in touch with them? So email. Get them on your email list. Yeah, use Keep, right?

19:15Yeah. Well, we use HubSpot now. Keep is great. I think once you end up with more than about half a million email addresses, they actually recommend you move on. So, you know, we stay in touch with them by email with our CRM. I might send, depending on what group it is and who it is, I use send out cards. Yeah. Okay. And so I joined, I told you I bought a big mansion down there in Florida and I started another little company down there that hasn't gotten off the ground yet, but I went and joined the Chamber of Commerce, right? Right. And so I met all the, in fact, I invited all the board members of the chamber to the mansion.

19:57And now I'm speaking at their event next week. At your mansion. Yeah. And that's just you. Hey, I got a business in this area. I should know some folks. Exactly. Yeah. In fact, how did I get the mansion? I met a guy in the pool. Gotcha. All right. And there's a big story behind that. Once you keep in touch with them, what happens there? How does it turn into referrals? Yeah. So then what happens is as you're standing in touch with people, if it's an end user prospect, then, of course, your mailers and your emails are talking about how we can help you, the problem, the solution, that sort of thing.

20:37And every single one of them talks about a referral reward. Okay. Okay, so you have your networking and stand in touch with people. By the way, everybody who becomes a client, they get something from us twice a week by email and something through the mail every month. Okay, and a lot of companies won't do that. But if you do that, you're going to watch your business grow. You email them every week and then once a month you send them a postcard or what do you mean physically? Yeah, postcard, newsletter, something like that. You're hitting them in multiple modalities there. Okay. Excuse me. We email twice a week.

21:13Anyway, so then we have a reward system. So another problem that people have or a mistake that they make is they know that they should say thank you for the referral. But if it requires somebody to remember it and it's not like an automatic system, then things are going to fall through the cracks. So we offer a referral reward. We send a certificate to anybody who sends us a new client. If you know someone in Houston and you refer them to us, we're going to say, how did you hear about us? They're going to say Donald Miller. And you're going to get a certificate that you can use then for cash or services.

21:53And we also, and I also in the book, tell people how to figure out what that, how much that should be. Because every single company has a cost of acquisition, right? Right. There's a, there's a, and you should know that, you should know that number. What does it cost you to get a new client? You know, it's crazy that I found out business owners, oh, I can't pay a 10 % referral fee. Like I barely make 10%. Right. But they don't understand that that's a marketing cost. Right, right. Not from their net profit. That's a great way to look at it, yeah. Right. But in the next breath, I'd say, well, let me ask you this.

22:32if I send you a$40 ,000 client or$4 ,000 job, would you give me, would you give me a thousand dollars if I get you a$4 ,000 job? Sure. Would you give me$10 ,000 if I got you a$40 ,000 client? Sure. That's 25%. Right. You know? Right. And the other thing is, is that even though it's a 10 % referral certificate, less than half the folks actually cash it in. Yeah, yeah. So it's - And like you said earlier, they like to be thanked. Mm-hmm. Is there any other step after that? Yes. What's the next step? Big step. In the system. This is the secret. Yeah. This is the big one. Okay. This is the secret to record sales and profits.

23:17All right. You ready? Yes. You sure we have time for this? I think we have time. The secret of record sales and profits is every single company, every single industry has a specific referral source type that is in a prime position to refer them. Take your company. What kind of companies are in a position to refer you? I mean, probably founders who have marketing teams who pay us a sort of premium for our consulting gigs, probably know a bunch of other people. Okay. So that's end user clients. Right. Okay. Are there specific types of industries or professionals? Oh, I got you. I see what you're saying.

24:02Yeah. I mean, gosh, any sort of cohort of marketers, you know, those are the people. Yeah. How many of those organizations are in the world? I mean, hundreds, certainly. Hundreds? Yeah. All right. So when you go to those cohorts and you add value to those cohorts and they refer you, they're in a position to refer multiple clients to you. Yeah. Probably many more than an individual client. Yeah. So let's take a service company like, you know, let's say, let's take my friend in the restoration business. plumbers are his prime referral source type so he goes and adds value to plumbers visits them brings barbecue yeah and brings a little gift yeah brings a gift and and finds out what their problem is helps them solve the problem serves with them i have a whole section in the book on advanced referral marketing strategies i went to speak for his company one time and his marketing director i really wanted to meet his marketing director because at that time they were doing 47 million dollars a year without advertising wow just through referrals and i was like i got him and using my system right and i said i got to meet your uh marketing director and he said he's not here i was like didn't he know we're having a meeting i mean is he on vacation where is he he said he's hog hunting i was like hog hunting why is he hog hunting i mean he said well you got to understand he doesn't care the first thing about hog hunting but our top referral source plumbing company wanted to take them hog hunting so he took the the top referral source they were out there hog hunting yeah so i have a whole section on different ways that different things that you can do to entertain your referral sources and take that relationship to the next level So, for example, in my industry, the first company that I started, I bought a company in Charleston, South Carolina, also, that does the same thing.

26:09Very high-end rug cleaning. And I have a partner here in Nashville that does the same thing. He works for all the big stars. You met him at your house. Yeah, yeah. And he built that whole business through referrals. So designers who work with these stars, they'll say, listen, we got to take care of that$10 ,000 sofa. We got to clean it. We got to protect it. We got to get your rugs cleaned or whatever. And they refer my friend. And so his marketing strategy is to meet as many of those designers as he can and value them. That makes sense. Educate them. Yeah, it's counterintuitive. Is it? Well, I think so in some ways because when you think of growing your business, you think of sitting at your computer and figuring out some way to spend some money on something and never actually shaking somebody's hand, right?

27:03I loved the forward you did for the book. It's so true. Yeah. Well, if you wanted everybody to leave with one thing to do other than buy this book, Referrals Made Simple, uh what's the one thing you think everybody who owns a small business should start doing right now what's the first step the first step is change your mindset understand that my mentor the late great zigziger yeah said that you can have everything in life you want if you'll just help enough other people get what it is that they want that is so true and if you got that mindset you're going to be generous. You're going to give to people.

27:46You're going to understand that when you add value to people, it's all going to come back to you. Yeah. Man. Well, Howard, thanks for coming. I mean, you've got me motivated. I'm wondering. Yay. I dropped my car off this morning at a Firestone because I got the slowest leak in the history of the world on one of my tires. Hopefully, they can find it. But you just made me realize that guy owns a little business. I should have a trunk full of my books, autographed, hand them out and say, hey, I know she own a small business. I care about guys like you. Here's my book. There's just so many little things that you can do.

28:18Referrals made simple. If you really want to grow your business, there's a great way to do it. It seems like a counterintuitive way to do it, but I'm telling you, your business is growing or failing based on referrals anyway, so why not juice the system? Howard, great to talk to you again. Good to see you. Thanks for your years of friendship. I sure appreciate it. Always an inspiration. Yeah, my pleasure. Good to be here with you. Thanks for listening to the StoryBrand podcast. No matter where you are in your marketing and messaging journey, get the tools, the training, and the support you need to start clarifying that message at storybrand.com.

28:50And don't forget to follow and subscribe to the show wherever you get your podcasts so you never miss an episode. And if you're watching on YouTube, hit that subscribe button and then leave a comment letting us know what resonated with you and what we can impact to help your business grow in a future episode. Thanks again for listening and we'll see you next week. Thank you.