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Hot Business Ideas: The Best Ways to Get More Referrals

It all started with a friendly tennis match. Mike Beckman, owner of Proforma BPM in Atlanta, had been part of a group that played casually for several years, never realizing that his partner worked in marketing for a national telecommunications company. “We never talked business,” he explains. But one night, on a whim, he entered his buddy’s name into LinkedIn, the social networking site for professionals, and made the discovery. Though his tennis partner wasn’t authorized to make promotional product purchases, he was able to refer Beckman to two other people in his company who were.

Those first two LinkedIn introductions snowballed into about 50 new connections for Beckman and more than $200,000 in sales over the last year and a half. Beckman’s referral strategy is simple: Whenever he gets a new connection on LinkedIn, he’ll ask that person to make digital introductions to anyone else who might be interested in working with him. Nine times out of 10 the tactic results in a meeting, he says. And even if prospects are not interested in buying right away, they’re still linked up in case their situation changes. “LinkedIn is basically a digital business card that never gets tossed,” Beckman says.

Using LinkedIn strategically and selectively has proven so effective that Beckman has abandoned other prospecting techniques. “Any cold-calling, you’re just spinning your wheels,” he says. “By using LinkedIn, you’ve already been introduced, they just don’t know it yet.”

Referrals are one of the most powerful tools in your sales arsenal, and as Beckman discovered, the Internet has spawned new and innovative ways to request and leverage them. Despite this, however, few companies have formal systems in place to take advantage of customer goodwill. “I am amazed at how many companies do not ask for referrals,” says Kevin Kowalke, a Waukesha, WI-based business strategist with a focus on marketing and sales. “You must give your customers reasons and ways to refer.”

Here are some tips to help you generate more referrals:

Timing is everything. Experts say the best time to ask for a referral is when the client is happy, but the sale is not 100% complete. “They need to still feel slightly obligated and enthusiastic about referring you,” says Julia Angelen Joy, a communications and marketing consultant with Boise, ID-based Z Group PR. Make asking for a referral a regular part of your sales script.

Condition your customers. It’s crucial that your customers understand how important referrals are, says Kowalke. “Create the culture that giving referrals is how they got to you and is part of doing business,” he says.

Practice reciprocity. Show your clients you’re willing to give them referrals so they’ll be motivated to send their trusted network to you. “Become the connector of people to position yourself as an extremely valuable person to know,” Kowalke says.

Use the Internet. Social networking sites like LinkedIn and Facebook are perfect opportunities for low-stakes, online referrals. Brian Carter, digital marketing consultant and author of The Like Economy: How Businesses Make Money With Facebook, suggests simply creating a Facebook post asking customers to tag a friend they’d like to refer in the comments section. Incentivizing the post by awarding a prize to a random recommender will increase responses, he says.

Follow up. Stay in contact with your customers and prospects so you’re top-of-mind when they’re interacting with their own networks, whether online or off. “Even an informative email newsletter can trigger a referral when the timing is right,” says Joellyn Sargent, author of Beyond the Launch: The Practical Guide to Building a Business That Thrives. Beckman has had luck with a similar technique. He’ll periodically publish marketing tips on LinkedIn, and each article prompts at least one client to call or email, reminded that they need to place an order.

Be worthy of referral. Focus on providing great customer service and high-quality products to inspire word-of-mouth marketing. “If people see immense value in working with your company, they’ll enjoy the opportunity to help others by introducing them to you,” Sargent says.