How to leverage the power of referrals

Clients tell me constantly that they generate a ton of new business through referrals. Yet many companies don't have a system in place to make sure they keep receiving them. Actively generating referrals should be a key part of your marketing strategy, and here's why.

1. Referrals are credible right from the start. When someone you trust tells you about a business, you will also trust this company, even if you've never heard of them before.
2. People who are referred to a business will spend more money. Research has proven this and it's likely because people tend to refer others who are highly qualified and not just price shoppers.
3. Referrals are extremely cost-effective. They're free! Compare that to the cost of advertising. In some industries, like consulting and professional services, most sales are the result of the recommendation from a friend or colleague.

Are you getting your referrals? If not, consider these ideas.

1. Expect to get referrals but don't assume you will. I wouldn't suggest asking for referrals every time you see a client. But when a client is extremely happy with you, let them know that if they know someone who might benefit from your business, to tell them about you.
2. Make it beneficial for someone to send you a referral. It can be as simple as offering a discount or a free service for every referral.
3. Give every client extra business cards. Give them out to clients and they may pass them along to others who are a potential fit for your business.

Remember that referrals are crucial to your business. The good thing is—if you're making your clients happy then they will likely be happy to refer their contacts to you.