In the marketing world, I often times ask various businesses what efforts they are making to increase business.  The most common response I receive is, “My business is mostly word-of-mouth referrals, and I do not do much else.”  For starters, word-of-mouth referrals should be a large part of your business, but you should also be putting forth effort on more marketing fronts as well.  It is never a good idea to rely on one source to fuel your business; you must diversify, just like you would with investments and money.

Nevertheless, those businesses are correct; referrals and word-of-mouth connections can be the best source of continued income and new business.  Hence, it is to my surprise when I ask what they are doing to promote word-of-mouth referrals, they say they’re doing nothing.

Always remember that taking care of customers you already have is far more important than trying to obtain new ones.  It takes time, money and effort to develop new relationships and prospects, while it takes very little to keep an ongoing relationship alive and flourishing.

With this is mind, make sure you are taking advantage of all the wonderful contacts you have established and start turning these relationships into a referral stream for your business.  The number one rule of referrals is that you are less likely to receive them if you do not ask for them.  A common mistake people make is they that fail to ask their contacts and assume that their network will readily refer business to them.  When you ask someone for a referral it requires them to stop, think, and take an action.

Additionally, don’t assume that your friends, family and acquaintances know exactly what it is you do.  In reality it is very common for those who are closest to you to not know specifics of your business or who your ideal client is.  Try quizzing them to see what areas of your business are understood and what areas are missed. This is the second most important rule of asking for referrals: make your request as specific as possible.

As an example, an insurance agent could ask a friend, “Do you know anyone who needs insurance.”  The response will almost always be negative as the question is far too broad and does not inspire a specific action.  The insurance agent will see much greater success when he asks, “Do you know any families that have recently had a baby and may need life insurance?”

This specific question creates a personal interest and requires the person to think about people they know that have recently had a baby.  It goes back to figuring out your target market before asking for referrals.

The third rule, when it comes to asking for referrals, is to be sure to return the favor.  When you go out of your way to create connections and look out for the well being of others, it will inevitably result in your own personal benefit.

This can be said for many aspects of life, and is definitely true for referrals as well.  The more you give, the more you receive.  Be sure to look to connect individuals in your various networking circles, even when it does not benefit you.  People will inevitable be grateful to you and look for ways to help support you and your business in return.

Overall referrals can have a major impact on your business and should serve as a prime source of your new business.  Make it a goal on your work calendar to make just two calls a week to people in your network regarding business referrals.  You will be pleasantly surprised that if you continue to ask, you will continue to receive new business.  Be sure to follow the other two rules as well, and ultimately you will create a non-stop source of revenue.