A steady stream of referrals is the lifeblood of any successful small business. 
When you can depend on 20%, 40%, 50% -- or more -- of your business coming in through referrals, your business becomes self-sustaining. Which is a good thing!
Research shows the importance of referrals. According to Paul and Sarah Edwards authors of "Getting Business to Come to You," up to 45% of most consultants and service businesses are chosen by customers based on the recommendations of others.
This article will help turn your customers into a tireless sales force that brings you new profits 24 hours a day!
How and when to ask for referrals
Many small business owners assume that referrals will happen by themselves if you just do a good job for your customers. Not true! You must take a more active role.
Successful small business owners not only expect to get paid by their clients, they expect to get referrals. And they're not afraid to ask.
Don't wait until the job is finished. You should discuss referrals from the start. Say something like: "I'm going to do the best possible work for you, and I'll stand behind that work with a money-back guarantee. I hope that when we're through, I might ask you to refer me to others who might want similar success."
No matter how you do it, the idea is to tell your client what kind of people you'd like to get referrals from. Then, tell your client how to refer those people.
These referrals might come from your client's friends or relatives. What associations or clubs does your client belong to? What kind of business associates does he have? Does he have clients of his own that he could refer to you? The possibilities are endless!
A simple referral system that works wonders
I use a referral system with great success in my resume-writing business. And it's so easy, you can start using the same idea today.
I offer a $10 reward for each new client that a current client refers to me. To get the message out, I give cards to client with a $10 reward printed on them. I also mention it on my receipts, floppy diskettes and in all follow-up emails.
To make it work, however, you must offer an attractive payoff to the people who give you referrals. After all, they're doing you a big favor by sending new business your way. You should compensate them accordingly.
Think of it like this. If it costs you $25 for each client you get through the Yellow Pages and $15 for each one you get from a classified ad, paying $10 for referrals is a bargain. Find out the best price to pay for your referrals, then spread the word!
To get referrals, all it takes is a little effort on your part to encourage the process. The results can boost your profits by 10%, 20%, 30% -- or more -- year after year.
Kevin Donlin
Author, Guaranteed Marketing
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