Newspaper ads, direct mail, radio, television, packaging—all are helpful in developing business. Unfortunately, these approaches are all costly and inefficient.

Referrals are the least expensive way to develop business. They cost nothing and yet they produce the best results. It’s amazing that such a good business idea is as underutilized as it is. Much of that is probably due to the fact that most people don’t know the skills of developing referrals.

Here are a few ideas to get you started:

·          Position yourself. In Positioning: The Battle for Your Mind, authors Ries and Trout suggest you position yourself for free using the media. Writing consumer-oriented columns for local, state, and national media is an excellent way to do this. Position yourself as an expert in your field. But remember, you must have a unique twist. If you are a mortgage lender, you could position yourself as the specialist in financing top-dollar homes. That would separate you from all the other mortgage lenders who are being priced as a commodity.

·          Speak. Service organizations have weekly slots that they are desperate to fill. You don’t have to be a polished speaker. All you need is a sense of conviction about your topic.
 

Don’t try to educate. Instead, work to persuade. Americans are well-read enough to know that our savings rate is dismal compared to other countries. We have all the information we need about saving. But what we really need is persuasion. A broker should educate on techniques, but speak from conviction about the need for people to be disciplined in their investing approach.
 

·          Attend business networking events such as Chamber of Commerce functions. When there, introduce yourself to new people. Ask them questions about themselves and their businesses. Do not talk about your business. Ask for their card. Introduce people you have met to each other. Follow up afterward.

·          Ask good questions. Here are some proven winners: “How did you start doing what you’re doing?” “How are you different from your competition?” “What trends do you see in your industry?” “How would I recognize a good prospect for you?”

·          State what you do as a benefit. People are not intrigued with titles. Instead of saying you are a realtor, say that you help people find their dream home. Instead of saying you sell insurance, tell them you help people make sure they don’t lose their financial security. A consultant could say he or she helps businesses grow. People are intrigued with benefits because they can usually think of how they would benefit or they know someone who would.

·         Understand and use good networking etiquette. Ask the person you are talking with who they would consider to be a good referral (for them). Follow through on promises and be sure to write a thank you note. Do not expect something in return—but you will notice that as you refer, it eventually becomes a two-way street.  

·          Create an effective database of leads that allows you to access a person’s information by his or her first or last name, industry, job title, quality of lead, and other fields you feel will benefit you. Then do something with the leads. Contact them regularly. Mail things that are beneficial to the person, such as articles that may be helpful.

It’s a good idea to ask your happy customers if they know of anyone from their neighborhood, circle of friends or relatives who could benefit from your products or services.   It’s actually a great idea because they are the heroes for helping people get what they want—and you win too. It may not have occurred to them to refer. 

Whether or not your job is direct sales, keep in mind this simple fact: Everyone sells. The best salespeople in the world are great referral machines. Why not crank up your machine?