Seven Ways to Grow Your Business
Through Referrals

by Karim A. Jaude

The easiest way to earn business comes from customers, clients, and prospects that already know and trust you. Grow your business with a referral engine that will help you carefully cultivate and nurture your referral sources.

Going deeper or wider with clients you already have

The first place to start is with your current customers. Studies show that the opportunity cost of adding or replacing a current client is six times what it would cost to keep an existing customer. A client or customer that already trusts you and is happy with your work is a great source to tap for more business.

Do not expect customers to know or understand all the solutions you can provide. Feed them a steady diet of information about the types of products and services you can offer. Do not hesitate to share your successes with them.

When interacting with a client face to face, or on the phone, be friendly. People enjoy doing business with those they feel comfortable with. You will be amazed at what you can learn about the issues affecting your customers just by listening. Use this knowledge to cater to your customers' needs and desires, thereby making for a more satisfied and happy clientele.

Create referral partnerships

Ask yourself this question:

Who do I know that already has the kind of customers that I enjoy working with and does not compete with me on the basis of what they provide those clients?

Look for businesses that serve the same clientele you do, but make sure they do not compete with you directly by offering the same product or service. You can create mutually beneficial relationships by sharing leads, producing value added and cross-marketing workshops or seminars.

Once you have these relationships in place take steps to ensure that your referral engine has plenty of fuel.

Seven powerful ways to keep the referral engine running

  1. Ask for feedback. Once a year survey your clients and ask them to provide feedback.
    • What benefits did you get from working with us?
    • How can we better serve you?
    • What other services would be beneficial to you?
    • Who do you know that might benefit in the same way?
    • Can we use your name to contact them as a referral from you?

  2. Stay in touch. Several clients find that an E-Mail newsletter is a great way to show a client a fuller spectrum of their products or services. One associate that markets telephone wire and cable installations sends out a newsletter that includes tips on telephone techniques. In every issue he asks: "Do you know someone else that is in the midst of a move that could use my advice?" The few hours a month of work he puts into his newsletter yields a steady trickle of add-on work and referrals.

  3. Make it easy to refer you. Go with simple, elegant ways to pass names along. If you and your referral partner both use Microsoft Outlook learn how to send v-cards by E-Mail. A v-card is a contact record. When received, your referral partner need only drag it to his or her contact folder and categorize it as a referral. It is neat, clean and instant.

    If you use a Palm Pilot or other PDA you can make infrared transfers of a single contact, or many at a time, at the touch of the screen.

    I always ask my clients and prospects if they know a particular person or industry to who he/she would like an introduction or referral. Then I arrange an immediate conference call with the two parties. If the referral is busy, I set up a telephone appointment. "I wanted to call and connect you, with Bob. We have worked togetherů." Then, I arrange a meeting over breakfast or lunch. Referrals made in person, during a conversation, open doors almost magically.

  4. Create customized referral tools. Include in your invoice a stuffer saying, "We grow our business on happy customers like you. Do you know someone we can make just as happy?" Create handy information sheets for customers and clients that detail what type of clients you are looking for. Be specific. Go beyond the simple business card calendar.

  5. Ask for testimonial letters. Follow a successful project with a call to ask your client for feedback. Listen carefully to the positive terms they use. Probe a little, gently fishing for a particular type of feedback. Once you get it use these words, "I am so pleased we have made you happy. Would you mind if I included your comments in the form of a testimonial letter? I will send you a draft for your approval and/or amendments. Then you may copy it onto your letterhead. Is that OK?" Almost everyone says yes, and rarely do they change a word. It's fast, easy and it requires almost no follow-up.

  6. Say "Thank you". If you want to make a powerful impression send a referral gift, before the referral turns into business. The referrer will never forget it and will be eager to pass along new referrals.

    Some people create simple ways to pay "commissions" for referrals. If they do not wish to receive a gift or referral fee, a creative way to pay "commissions" for a referral is to find out what that person's favorite charity is, and offer to give a percentage of the first piece of business which results from the referral, to that charity. An added benefit is that charitable giving is tax-free.

  7. Free client appreciation seminars or dinners. Run a seminar on a hot topic and invite your clients to bring along their clients or prospects. Remember, these must be well-thought out and well-planned affairs. You can also invite a client or group of clients to a fine restaurant to share a meal or a special event like the theater or sporting event, as a way of showing your appreciation.

In addition to your existing clients do not forget about your previous clients. Your previous clients are a substantial resource in building your clientele and referral engine. Treat them the same way you would treat an existing client.

A real estate broker once sold me a building and never contacted me after the sale. Another real estate broker that I had never worked with communicated with me on a regular basis, sending information about the services he provided, as well as information about the real estate market in the area. When it came time to sell my building who do you think I gave the listing to? I gave the listing to the broker who had been in contact with me. The biggest mistake of the first broker was that he did not keep in touch and follow-up with me. Do not make the same mistake of disregarding your previous customers.

Start planning your referral strategy by implementing one or more of these marketing tools. If you are unsure where to begin, ask someone who understands your business model and industry, or call us, and take advantage of the extraordinary power of referral based marketing.

Karim A. Jaude (The Coach) is the founder of "BusinessCoach1"; a business and professional coaching service. For over six years he has been coaching entrepreneurs, executives and professionals to develop their skills, promote and grow their business, their teams and themselves; and to achieve peak performance while have fun in the process. He coaches by phone or in person. He practices in the Brentwood area of Los Angeles. Karim can be reached at 310-471-4185. E-mail:, website .

Many more articles in Sales & Marketing in The CEO Refresher Archives


Copyright 2003 by Karim A. Jaude. All rights reserved.

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