The business of referrals makes sense for most companies for the following reasons:

# Referral marketing reduces your sales expenses and sales cycle. With less time calling cold prospects, your small business can focus on customers and their circle of influence.

# Referrals can build your level of satisfied customers. The cycle self-perpetuates with more satisfied customers referring others to your company.

# Referrals increase your sales revenue. According to world-renowned sales trainer, Tom Hopkins, in "Sales Prospecting for Dummies"; your closing ratio for non-qualified leads is 10 percent versus a 60 percent close ratio with referred leads.

If the prospect of building the referral end of your business is so enticing, why do so few businesses do it? Because they use the wrong approach in building referrals and have limited success.

1.Set A Target: In business, measure the results to improve performance. Set a clear goal with a time line. Example, 10% increase in referral business over the next 10 weeks.

2. Timing: Conventional sales wisdom claims the best time to ask for the referral is immediately after the close. This tactic is far too aggressive. Give your clients time to experience your service or product before asking for a referral. Ask for the referral at close only if your client is already delighted with your business.

3. Top 20: Not all customers are referral candidates. Find the top 20% that are ecstatic about your business and ask them for referrals. Make sure their network is the type of client you want.

4. Give and You'll Receive: Give your clients extra service and follow-up support before asking for referrals. When you give willingly to your customers, they will return the favor.

5. Type of Customer: Inform your referring clients of the type of customers you can help. Provide a clear picture of the customer demographics will help your referral marketing.

6. Rewards Program: Provide special rewards to your referring customers on a regular basis. If a customer provides you with 5 sales, offer them something special, e.g. discounts.

Growing a small business is tough work. The sales function is a time consuming task with a constant need to fill your "sales funnel" with fresh, qualified prospects on a regular basis. Finding the best qualified leads from your business does not come from a cold contact situation but from building a strong referral business. Discover the the benefits and 7 tactics to drive the referral marketing for your small business. There are many reasons referral systems are important. These systems primarily help your mindset, and your mindset is the first step in creating a solid positive change.

Referral system implementation delivers the following benefits:

1. Proactive referrals recruitment

2. Customer assistance, relationship and loyalty development

3. Sequential increase of referrals year-over-year

4. Referral tracking and data-base development for future campaigns

5. Lower cost per customer (CPC)

6. Saves employee time and company money

Referrals are valuable but many businesses and marketers still think of them as happenstance and not as a serious marketing medium. This is a myth, and we need to be enlightened to the fact that, much like having a gym or personal trainer helps you lose weight, the proper referral system makes referral marketing a priority and after a while, it becomes second nature. We learn to take the necessary steps with every new customer, to ensure that they will tell others about our products and services.