Word of mouth is the most cost effective and most powerful way to generate new business. More recently, the online term viral marketing has been applied to the age old concept of referral business. 

Referral business is easier to convert and much easier to deal with than cold prospects and it is by far the most successful way to generate new business. Referral business is the best type of business going because you are going in with a slight edge. You know that when you arrive, that they are more open to listen because of your track record with people they already trust.

It's always important to keep in mind that you still must sell referral customers in the same way as you sell and explain the benefits to a "cold" customer. There are no shortcuts and if you're tempted to not prepare or not work as hard, you will waste your referrals.

So the big questions is, how do you get more referrals?

In all the actions that you can take to get referrals, the baseline action is asking for them. If you don't ask, you won't get them. Now there are better times and ways to ask for referrals and that strategy is outlined in the steps below.

Step 1 - Be prepared.

Know your referral system down pat and be ready to use it. Know the triggers or signs when you're going to make your case for referrals. If you're going to use a scripted set of phrases, practice them and record yourself until it's second nature.

Step 2 - Plant the seed on the first visit.

Many referral opinions out there, state that you should ask for referrals - after - you have done a good job. While that's great in theory, it has a major flaw. It doesn't take advantage of how our brains are wired.

Planting the seed for the referral right away will influence your potential customers behavior for your benefit.

First it gives them time to think about who else would benefit from your service or product as they are getting going and working with you. If you wait until you are done, they're already thinking about the next thing and there's no available "think time" to determine who else would benefit, other than while you are standing there with the expectant look on your face.

Second you can frame exactly the kind of customer that you want to have. This is a powerful way to influence, screen and select your customers.

Step 3 - Use a system.

Using a system simply means that when the appropriate opportunity presents itself, you deliver the same message, every time.

“You know, I get most of my business from referrals. A good referral for me is _____ .
(explain to them what a good referral for you and your business is.)

For example, as you're thinking of a good referral, think about _______ ( seed their memory, with examples of good referrals that relate to your business).

Who do you know, who would be the best referral for me?”

Avoid asking "Is there anyone who …?" That sends your prospect on an internal search that usually gets stopped right away because they don't have time to think about it.

Give your potential customers the benefit of time to think of referrals after you are not there. Doing a great job for them after you've asked, just multiplies the obligation that they will feel to provide you with a referral.

Here are 2 articles from the web on referrals…

Referrals it’s a good IDEA to ASK - One of the greatest compliments you can receive as a recruiter is a referral. The referral means that you are a person of trust, you did a great job, your reputation is impeccable, and that was so wonderful can you do it again? …

Employee Referral Program Killers - Nothing kills a well-designed program faster than slow or no response rates to employee referrals. If the person being referred doesn’t hear something unique to their submission within 72 hours, they will become discouraged. …

Referrals Rock! - The BEST way to receive a referral is to first give referrals freely to others. In other words, share your network. Start making introductions within your network of local contacts. Be the first at a networking event or party to provide …