Step #1 Create a Referral Marketing Plan

Instead of waiting for your customers to put a good work in for you, be proactive and develop a referral marketing strategy. Before you ask for those referrals, be clear about who your target market is. If you have a clearly defined market, it will be easier to educate your referral sources about what kind of customer might value your product or service. If they understand your business needs they will be more likely to provide you with referrals that fit your target audience.

Step #2 Expect Referrals

If you never ask your clients for referrals, chances are you will never get them. Create a referral plan, and then make it a point to ask satisfied customers if they would consider giving you a list of some potential clients who would value your product or service.

Step #3 Offer Promotional Incentives

Everyone likes to get a deal. So, you have a much better chance of receiving referrals if you offer promotional products or services in exchange for contact information. For instance, you might offer a percentage discount off a service if your client fills out a form that provides four to six referrals. Or, if your business is product oriented, you might offer a free product of some sort in exchange for a list of referrals. (Note: You can double your marketing here by offering a free product that has your company’s logo already printed on it!)

Step #4 Use the Internet

If your company has a website, include a button that allows browsers to instantly refer their friends to your site. Your internet market becomes targeted automatically, because presumably they will only send a link to friends who are truly interested in your product or service.

An alternate strategy is to provide a place for browsers to provide email addresses of friends who might be interested. You can then follow up with a direct email campaign.

With either of these methods, it is important that you work with your web designer to devise a system that includes the referring person’s name or email. This information will help distinguish your email from the garden-variety spam and prevent it from being automatically deleted.

Step #5 Create a Record System

Not all of your referrals will generate new business immediately, but they may still have future business potential. Make sure that you maintain good records on all of your referral contacts. Keep track of who made the referral and what measures you have already used to contact them.

For small business owners, the first step is actually developing a marketing referral plan. Without a plan, chances are you will get the occasional accidental referral from satisfied customers. But, with a little forethought and planning you may find that referral marketing can generate a substantial percentage of your new business.