As with the majority of decisions facing businesses today, it is necessary to weigh the costs of implementation before taking the plunge into something new. But there are some areas that are obviously worth their cost, and one definite program to always have is a referral program.

It is a known fact that if one person recommends you to another through word of mouth then the person referred is more likely to buy. A referral program similar, except a little more methodical. Basically, it’s a method that allows your clients to recommend numerous people to your services. Remember the Pareto Principal – you’ll get 80% of your business from 20% of your clients. It is impossible to know right off the bat which ones will give the most business.

If this is new to you, it’s worth running over the basics of a referral program. It’s important to make sure that your customers are overjoyed – an unhappy client is not going to refer you ever. When a client sends you a referral, make sure you thank them. That little bit of recognition will have great meaning to a person. Reward your clients for these – it doesn’t have to be something big, or related to your product listings, just a simple form of ‘Thank You” will always be appreciated by people.

Be sincere when you ask for referrals. People usually do not spend time on something other than their own needs, so making it as quick as possible is best. Taking an idea as simple as this and using it properly can have a tremendous effect on a business’s life and growth.

A referral program should ensure that you get quality, actionable contacts to follow up on. It is not written in stone that they must “buy now” but that at some point they will change to active customers, if followed up on well. With all programs, it’s necessary for you to make sure that it’s implemented correctly too. Referral programs offering whatever will work as well if most of your sales get done in person by your sales force, or in a retail store.

Keep things straightforward and simple until you have a great system, remember that what you do well may be specific to your company only. Run the program different ways until you get the desired results – if not, make some small changes until you reach a formula that works the best.