In the last article we discussed that the creation of a compelling offer will increase your conversions effortlessly and put a lot more money into your business. This article will discuss how to create a referral machine. Click here to see the archived newsletters.

Referrals are the best way to generate new business. A referral means that a client/customer/patient loved your product or service enough to recommend you. Referrals make the best client/customer of patient because there is already a trust that is built into the relationship.

After nineteen years of coaching small business owners just like you, the biggest challenge that I see is that most small business owners do not have a referral system. When your business is run on systems, you will find that your stress goes down and your profits go up.

THE FIRST IS CALLED A “STATIC” REFERRAL SYSTEM This is the system most businesses currently have in place. In this system, your customers are familiar with your referral program and understand the “perks” they will receive from sharing information about your business with family, friends, associates and anyone they meet who shows an interest in what you do. This system involves a concerted effort and approach in which you ask your happy clients or customers for referrals and gladly reward them for their efforts, yet you don’t directly move the process forward. The second system is the best.

THE SECOND IS CALLED A “PROACTIVE” REFERRAL SYSTEM In this system, you direct the entire process and have the power to reach potential customers who have been influenced by their friends or associates. These are prospects who, under normal circumstances would never have heard of you or your business. In the proactive system, you motivate your customers to become “promoters” of your business by enticing them to share information about what you do with anyone and everyone they know.

So how do you take a static referral program and turn it into a super-charged, systematic and much more powerful “Proactive” Referral System? Let me highlight several of my own experiences to illustrate both techniques. I recently became aggravated by my landscaper due to his lack of passion for his work. I decided it was time to find a new one for myself and a few of my neighbors that were also unhappy. One morning I was outside walking my dog in a neighboring community and one of the guys that I play tennis with was walking his dog too. He asked me how I was doing so I shared with him my irritation with my current landscaper. The words were no more out of my mouth when he began praising his landscaper and explaining to me how caring and professional, he was.

People LOVE to give referrals when they know the product or service, they’re recommending is excellent. His recommendation was so strong that he instantly convinced me to give his guy a try. He also told me that at least four of his neighbors were using this landscaper as well. Needless to say, my neighbors and I began using him and we’ve spent thousands of dollars with him already.

Now consider this. Did this landscaper have a referral system set up for his business? Not at all. I later discovered he had no referral program in place whatsoever, just a local print ad and some local radio spots that were costing him huge amounts of money.

If he were to do a quick customer survey, I’m sure he would discover that many of his new clients are referrals coming in from his current client base. My new landscapers saving grace is his personality and expertise. His staff is professional, considerate, concerned and treats each client with kindness.

You almost feel as if you’re part of their family when they come to your home. Basically, the landscaper gets referrals from this “static” method due to his superior service and his ability to build relationships with his clients.  Unfortunately, he lacks a true “static” referral system since his clients are NOT directly asked or actively providing referrals.

In many cases, they may not be referring him due to the fact they aren’t aware of the scope of his work and services that he offers nor are they offered benefits or perks for referring him to their circle of influence. If he created a formal system that rewarded referrals, he could grow his client base enormously with no out of pocket expense, and see his business grow much more rapidly.

When you implement the above strategies, what will it add to your bottom line?

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