Helping small business owners develop extraordinary businesses that really work for their customers, their employees, themselves and their families

How to promote referrals for your business

Why would you want referred prospects more than almost any others?

The biggest barrier to acceptance by a qualified prospect is trust. Having been burned and harrassed so many times, prospective customers are naturally defensive. Since a referred prospect comes on the recommendation of someone they know, they are much more likely to trust and accept you as someone who is not an “unwelcome pest” salesperson trying to take advantage of them.

Referred prospects are also less likely to give objections, price shop and complain than other prospects, and more likely to become “customers for life.”

Service-oriented, relationship businesses like accountants, lawyers, doctors, and dentists rely heavily on referrals for new clients and patients. Almost any business benefits from getting referrals.

Many business owners will tell you that they get most of their new customers, clients and patients from referrals, yet they don’t have a system to encourage referrals, so they don’t really get very many of them.

When developing their marketing plan or budget, most business owners think of investing in advertising, online or social media promotion because that’s what they hear about from providers promoting their own businesses, such as online and social media consultants and traditional newspaper and yellow page salespeople. They don’t think about investing in encouraging referrals, which would probably have a much higher return than other marketing investments.

Who can be a referral source?

The first natural source is a happy customer. It’s essential for a business to express care and appreciation to its customers.

Another is centers of influence. These are individuals who have many connections. In social media, they are called influencers. In online marketing, they are called affiliates. Offline, these are usually individuals who are somehow prominent in a community that you want to connect with.

Employees can also be referral sources, especially when you are looking to hire more employees.

Almost anyone you know or meet who might know other people who have the problem that you solve and might want or need what you offer can be a referral source.

A natural question to ask to encourage referrals is, “Who do you know who …?”

In order to encourage referrals, a business has to take action to be “front of mind” for its referral sources. One way to do this is with a newsletter. Some businesses keep in touch with regularly-sent emails. Many personal-service businesses send greeting cards, including birthday cards, half-birthday cards, wedding anniversary cards, anniversary of purchase cards, etc.

Remember to send thank-you notes for a purchase or anytime someone does something nice for you.

Another way to encourage referrals is to periodically send gifts of appreciation. How expensive that gift is relates to the value of a referral. An ice cream store can give a complimentary ice cream cone. A real estate broker might give more exotic gifts that are appropriate, like a china tea set.

You could have a periodic referral promotion with a nice prize, like a paid vacation. The name of everyone who make a referral goes in a hat for a drawing, regardless of whether or not the referred prospect makes a purchase

I have made donations in appreciations for referrals. Some clients and centers of influence were uncomfortable receiving personal benefits like movie tickets and appreciated a donation made to their favorite charity in their honor. You might have a different experience.

In a course I am studying, business development guru Jay Abraham provided a list of 220 strategies to get referrals or introductions!

Would you like to brainstorm a referral strategy for your business? Write to me at to schedule an initial consultation.

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Helping small business owners develop extraordinary businesses that really work for their customers, their employees, themselves and their families