Want More Referrals? Offer 'Em Something They Can't Refuse

The single best source of new business for you is likely to be old business. Your existing clients/customers are your best promoters. Assuming, of course, they like how you operate. A client who refers new business to you can be worth 10 times the amount you might be spending on advertising.

And because you can't always assume that referrals will just happen, you probably know you have to ask for them. But is asking face-to-face the best way to get them?

Even your best customers aren't going to have you on their minds at all times. They're busy and usually only think of you when they need you. So, if you've asked them for a referral, say, six weeks earlier, what are the chances that you pop into their minds when they next speak to someone who could use your services? Chances might be okay. But you may not survive if you have to rely on "okay".

So, while it's a good business practice to ask for referrals, the 'face-to-face, now-and-then' method needs improvement.

WHAT TO DO?

Bribe 'em.

And by "bribe" I mean "incentivize".

Offer each customer or client something tangible for each new client they refer back to you. And what's more tangible than cash? By offering something, you're not asking (begging) for a referral in the hopes that they remember when the chance arises. You're offering something in exchange. You wash my back, I'll wash yours. This way, the offer is something that your customer will likely remember.

If you're a small shop owner and you feel that a $10 coupon would work, then go for it. 

If you're a larger business with professional clients, then you may have to go higher than ten bucks. Maybe offering $250 for each referral is worth it to you.

Whatever the correct monetary value--or size of physical gift, if that's more appropriate--you'll know what to do. One company I know--an electrician--hands out certificates every time he completes a job at a home or business. Along with the invoice, he hands them a referral certificate designed to look like a $50 bill. He figured out that each customer brings in X and he can afford to offer Y for a referral. Since he began incentivizing his customers in this manner over a year ago his sales have increased more than 30%.

Develop a strategy, inclusive of how much you can offer, along with the best way to deliver the offer (hand deliver it, mail it, post it on your site/Facebook page, Twitter it, or other). Depending on what type of business you're in, chances are good that your stream of new business will noticably increase.