Most everyone would agree with the old saying that “word-of-mouth is the best form of advertising.” Sometimes it just happens, but more often than not, you need to instigate it.

Word-of-mouth is the best form of advertising.

Everyone would agree the old saying that “word-of-mouth is the best form of advertising.” It's free and it's effective. A referral leaves you with a good feeling, because you know it's the result of a job well done for some satisfied customer.

When it comes to generating referrals, most businesspeople rely on the kindness of strangers. They sit around waiting for customers to spread the word, saying nice things about them. Unfortunately, that rarely happens. In fact, studies have shown people are far more likely to tell others if they are dissatisfied with business services than when they are pleased. As you've probably already discovered, life isn't fair. You simply have to deal with it.

The good news is there are the myriad ways available to prime the pump of endless referrals. Here are 10 of those ways.

1. Ask for them.

Make it your policy to ask every client for the names of other potential clients. Do this at the completion of every job - or, at least at the end of those that went well. Ask your satisfied clients not only for referrals, but also for permission to use them as references.

Also, solicit testimonials from them. If you are any good, from time to time you may get a letter from satisfied clients gushing how happy they are with your services. Many others are just as happy, but don't take the time to write. They need prompting, and you need to make it as easy as possible for them to put their high regard for you on the record.

Often, they will compliment you verbally. When that happens, get ready to spring into action, documenting what they said, and gaining their permission to use it for promotional purposes.

Testimonials go hand-in-hand with referrals. They are the best marketing tools anyone can have.

Collecting business cards is more important than passing out yours.

2. Exchange referrals.

“You scratch my back, I'll scratch yours,” is a time-honored tradition in the business world. Work out understandings with people in related trades to recommend one another. Do this even with friendly competitors for those times when one of you gets more work than you can handle.

Be careful, though. Only recommend people who behave professionally and do top-notch work. Bad reputations are contagious.

3. Pay for rentals.

Auto dealers do this, so do realtors. Almost any business can do it, except for those bound by ethical codes that prohibit payments.

Set up a reasonable “finder's fee” scale. Make it payable upon job completion and payment in full. Don't forget to publicize this to all clientele. Don't just bury it in a fine-print paragraph. Give your finder's fee policy prominent play on its own page or on a separate sheet of brightly colored paper in your promotional materials.

Be sure to promote this to your employees as well as clients. Make it your policy that anyone whose referral leads to a successful project is entitled to a finder's fee. Put up a “Think Referrals” poster in your office. Give everyone company business cards to pass out to potential clients.

Extend the finder's fee to all of your suppliers and peripheral business contacts. Tell your attorney, accountant, trade or professional association staff, insurance agent, banker, subcontractors, suppliers, butcher, baker and candlestick-maker that you pay or at least reciprocate for referrals. It's like having dozens of salespeople on staff.

Be sure to keep track of these referrals and follow through with payment. By the time a job is done, many of your benefactors will have forgotten they were entitled to a finder's fee. Imagine how pleased they'll be to have your check materialize out of thin air! Think of how enthusiastic they'll be to track down other jobs for you.

4. Go back in time.

Keep a tickler file of past clients you've worked with. Once or twice a year, give them a call to find out if any more work is in their hopper, and if they know anyone else who has something coming up.

5. Mix business with pleasure.

Cultivate personal relationships with potential clientele. Treat them to ball games, concerts, theater, etc. However, make every effort to accompany clients to these events, not just pass on the tickets. You build relationships by sharing good times.

6. Always acknowledge referrals you receive.

Every time you get contacted by someone referred to you, fire off a note of thanks to the person who made the referral. Remind them that they are entitled to a finder's fee if the contact results in a successful job, but let them know that you appreciate their effort even if it doesn't pan out.

Want to really show your appreciation? Enclose a lottery ticket with a note that says, ”No matter what, you're a winner in my book.”

7. Cross-fertilize

If your business spans both consumer and commercial markets, look to gain cross-referrals. Ask consumer customers to recommend you to decision makers in the companies they work for; likewise, try to get your commercial clientele to spread the word to employees about your services. One way to do this is to offer a 10 percent or 15 percent discount to all employees of the client organization.

8. Appeal to other cultures.

Do you have anyone on staff who's fluent in a foreign language? Be sure to publicize this in all your promotional materials (Se habla español.). Print business cards in both languages. This will give you the inside track on jobs in a given ethnic community.

9. Seek out the influential “movers and shakers.”

The average person has a sphere of influence of about 50 people. That is about the number of friends and family members who are apt to follow their recommendations.

However, the “movers and shakers” in any given community have spheres of influence that number in the hundreds or even thousands. Get to know these people and befriend them. Join the same community and social organizations they do. Do volunteer work for charities with which they are associated.

Just rubbing elbows at a cocktail party doesn't constitute proper networking. Engaging people you don't know in relevant conversations instead of idle chitchat is much more effective.

10. Network properly.

Most people think of “networking” as rubbing elbows and chitchatting at a cocktail party. That describes the crude version, and usually it is a waste of time that results in nothing except chitchat. Proper networking could be the subject of an article unto itself, but for now let's just cover these important elements.

A. Hang around people you don't know. Most people attending social functions feel insecure and spend most of their time mingling with friends and co-workers. Force yourself to stray away and introduce yourself to any movers and shakers you can identify.

B. Talk about their interests, not your own. You bore people talking about yourself. If they're interested in what you do, they'll ask. Otherwise, the best way to get them interested is to talk about their favorite subject - themselves, and the work they do.

Ask open-ended and “feel good” questions: “How did you get your start in your business? ... What do you enjoy most about your work? ... What are the biggest problems you face?”

Ironically, the way to get them to think of you as an interesting person is to get them talking about themselves!

C. It's more important to collect business cards than pass out yours. Most business cards end up being discarded. You can't control what the other party does with yours. But once you obtain one from a mover and shaker, you have it in your power to follow up with further contacts.

You can send a handwritten note the next day along the lines of: “It was nice meeting you. If I can ever refer business your way, I certainly will.” And, you can keep in touch with the person from time to time by sending clippings of newspaper and magazine articles that relate to their interests. Best of all, you can refer people to them when the opportunity arises. And that's likely to start their referring people to you. ND