Ask any good business owner how he generates most of his business and he will instantly tell you that he does it through referrals. Ask him to explain his referral system to you and you are very likely to get a blank stare. Only this week I asked the vice president of two large companies what type of referral system they had in place. Both said, they didn’t, referrals just happen. So does death, but it doesn’t mean you should wait around for it!

Referrals are the life-blood of any good business. There is simply no quicker way to build your customer base and increase your income than to double or triple your referral rate, but to make that happen you have to have an effective system!

The Psychology of referrals

Let’s start by looking at the psychology of referrals. The first fact you should know is that contrary to what many believe, most people actually like to give referrals. There are three reasons for this:

1) The first is ego. When someone buys something new he wants his friends and neighbors to be impressed. He wants them to know what a great deal he got. When was the last time you met someone who bought a new car and told you what a schmuck they were for buying it?

2) The second reason is that most people like to feel important, they like to be the center of attention or information.

3) The third reason is that people like their friends and neighbors to share and experience the same things they do!

Many people are bashful or just downright scared of asking for a referral. They don’t want to seem pushy, desperate or, heaven-forbid, both. While I assure you that most people really do like giving referrals, you can make the process even more painless by re-framing the way you ask for a referral.

When a parent singed up a child for karate lessons at my school, I immediately went for a referral, but rather than asking outright that the student bring in some friends, I positioned it like this.
“Mrs. Smith, often when a child comes into the first class he can be a little tentative because he doesn’t know anybody and everything is new. We’ve found that the best way to counter this is to have him bring a couple of his friends into the first class with him. That way I can guarantee that he will settle right in, and, of course, there is no charge for his friends.”

Other such conversations might be: “Who else at work would like to help out by sharing this opportunity with them before the prices go up?” or “Can I help anyone else in your organization save time by employing this service?” or, “Who else can I help become a more productive part of your team?”

How you phrase your request can make the process a lot easier. So too can your timing. The very best time to ask for a referral is right after you have completed a sale. This is the time when excitement and anticipation are always at the highest level.

The first commitment you must make to double your referrals is simply this: ask for them. Not sometimes, not when you feel like it, not when you are having a good day, not if you feel the prospect likes you, but ask every single time in as many different ways as you can. There are seven key groups from which you can gain referrals;

1) Ask new clients to buy again. The reason we get referrals is so that we can sell more products, right? Well, the first thing to consider before we ever work on the referral stage, is, can we sell anything else to the new client in front of us right now? A new printer to go with the computer? Or some lessons to go with the new golf clubs they just bought?

2) Ask new clients who else might benefit Even if your most recent customer doesn’t want to buy something else from you, it’s almost certain that he knows someone who has similar needs. Everyone is an opinion leader to some group.

3) Ask non-customers for a referral Even when a sales presentation has not been successful, there is no reason why you