Building a Referral-Friendly Business

Referrals are an important part of any successful business.
They're a great way to keep building your customer base,
year after year, without having to go out and pay for
advertising. Instead, you use the power of your current
customers to help you continue to grow.

Referrals really are 'golden'. For one thing, in this
time-crunched age where everyone's so busy, people are
more willing to depend on the advice of trusted contacts.
It saves them from spending time in laborious research.

Referrals also produce a 'snowball' effect. Happy
customers tend to have a good idea of which one of their
friends would appreciate your product or service. They
refer people similar to themselves... who also refer
people they know... and so on.

But one of the best things about referrals is that they're
easier to convert into customers! It's fine for YOU to
say that you provide a great product or service -- but
when someone else says it, it instantly has more impact...
especially when it comes from a trusted friend or contact.
Your credibility and expertise have been established by
the referrer.

However, many business owners assume that just because
they do a good job, referrals will happen automatically.
This isn't true; people often need a little encouragement
to send referrals your way. It's up to you to take a more
active role in making them happen.

Go ahead and tell your customers that you'll do your best
to make sure they're happy. Then let them know that you
would welcome any referrals -- in other words, simply ASK
for new referrals. Encourage them by offering referral
incentives.

For example, offer a referral bonus or discount. Offer
free gifts, extra entries into a contest, whatever is
appropriate for your business. And ALWAYS send a thank-
you note and possibly even a small gift to the referrer
... regardless of whether or not the person he referred
becomes a customer. This will show that you appreciate
him thinking of you. Everyone likes to feel appreciated,
and he'll be more likely to continue to send referrals
your way. You never know -- someone he refers in the
future might very well become a customer!

Another example of how to generate referrals is to write
articles and distribute them around the Internet. Once
again, if you get published you instantly have more
credibility -- you build an "expert" status, so to speak.
Many article syndication sites offer a feature that allows
the reader to email the article to a friend... and articles
are often passed around from person to person through email.

In both of the above cases, your business automatically
has more "clout" than, say, if a prospect were to simply
visit your website. In the case of a referral, the
prospect has already been at least partially influenced
by his or her friend or contact... which makes your job
of converting him to a paying customer that much easier!

A referral-friendly business is one which can continue to
send you new customers day after day, year after year.
Encourage it and reward it!

About the Author

Angela Wu is the editor of Online Business Basics, an
exclusive newsletter for eBusiness beginners. Visit her online today
at http://onlinebusinessbasics.com/article.html
OR mailto:businessbasics@workyourleads.com for a series
of 10 free reports on building a business on the web.