People have been networking and referring each other for as long as anyone can remember.  While the basic premise of networking has stayed consistent though out the years some recent advancements in social media have changed the playing field for good.

In the traditional form of networking an interaction typically goes something like this:

Jane Johnson is at cocktail party with her husband, John, and mentions that they are looking to buy a house. Sara over hearing this introduces the Johnsons to Lindsey who is also at the party and who happens to be a real-estate agent. The Johnsons end up hiring Lindsey as their real-estate agent and buy a house. Six months later John refers a coworker of his to Lindsey and the cycle continues.

This is a very comfortable model for most people. It makes sense and is basically what networking and referrals are all about.

So how is any of this relevant to Facebook?

Facebook is basically a big referral system. Think of Facebook as a gigantic cocktail party with over 500 million people at it. People are having different conversations all of the time on Facebook about what doctor they go to, the real-estate agent they use, that they are looking to buy a house, what brand of shoes they just bought, etc. By using Facebook as a referral system for your business the possibilities are endless. Let’s walk through a referral that occurs on Facebook.

The Johnsons are looking to buy a new house and Lindsey is no longer around because she doesn’t own a computer and has lost too much business to stay in business. John posts on Facebook that he is looking to buy a house, Sara comments on John’s wall that her new real estate agent Jo Ann is great and posts a link to her website and Facebook business page. Here is where Facebook referral system really differs from the traditional method.  John now can go look at Jo Ann’s reviews, content, brand, BBB rating, etc on her website, view her Facebook page, see how many people have liked her page and feel confident that he is making the right choice in a real estate agent before even initiating contact. Additionally, Jo Ann’s website link and Facebook profile was shared with all of John’s 130 Facebook friends on Facebook as well as Sara’s 450 friends (Sara is very popular).

John likes what he sees and “Likes”  Jo Ann’s Facebook page This adds Jo Ann’s page to John’s profile permanently or until he removes it and shares that he “Likes” her page with his 130 friends again and requests her as a friend. Jo Ann accepts his friendship request and they do business together sharing pictures of houses that the Johnson’s might like via Facebook and posts 10 times on John’s wall.   People like to comment on houses, so 5 of John’s friends periodically post their opinions about the houses John is looking at. These 5 people commenting on houses exposes Jo Ann’s brand as a real-estate agent to 650 more people.  Finally, the Johnsons decide on a house and buy it. They write Jo Ann a recommendation on Google Places and keep her contact info via Facebook.  During the next 6 months they keep in contact with Jo Ann periodically commenting on pictures of other houses she is displaying to other clients. In six months, Jane refers a coworker of hers to Jo Ann by posting a link to her website and Facebook business page.

Let’s do a quick calculation to see how many people were exposed to Jo Ann’s brand. For Jo Ann’s example, we will put an “R” for “Repeat” every time people are hearing about Jo Ann’s brand for the second or following occasions.  Sara (450 friends) referred John (130 Friends) to Jo Ann. John (130 friends – R) “Likes”  Jo Ann’s page and becomes friends with Jo Ann.  Jo Ann (130 friends) and John (130 friends -R) discuss pictures of houses 10 times via wall posts,  5 friends comment on posts (650 friends) (9 more times, 650 friends – R). Through the whole process, a total of 1360 people were exposed to Jo Ann’s brand and 910 people were exposed to Jo Ann’s brand on multiple occasions.

After analyzing the numbers it is apparent that there are some distinct advantages to using Facebook as a business referral platform. By using Facebook for a business referral system, you will increase brand exposure, possible referrals and your business network. A few other points that should be highlighted are that when people post links to your website in comments, it increases your website’s visibility on the internet. Additionally, people loose business cards and contact information all the time; however, when there is a Facebook friendship or Business Page relationship established, one can always refer to Facebook to recover the information.