If word-of-mouth advertising is the most ideal way to gain new customers, why don’t more companies have a formal program in place for soliciting referrals? Perhaps it’s the intimidation factor -- just asking for a referral can be an awkward initiative for many organizations and professionals. Others may believe that their great service alone will generate the buzz they need to keep new customers coming in the door. (Sadly, for most businesses it won’t.)

Whatever the excuses, organizations and sales teams operating without a referral program are missing a tremendous growth opportunity. Here are seven elements to keep in mind when building and maintaining an active referral plan.

1. Make it intentional. When referrals “just happen,” it’s a rewarding experience. When they’re generated deliberately and frequently, it’s a profitable one. Adopt the mindset that referrals will become a large part of all new business efforts and incorporate referral generation into the marketing plan.
   
   
2. Ask and ye shall receive. Creating a referral-based business requires diligence, persistence, but most of all, it requires asking. Until you do, customers may be blissfully unaware that your company is taking on any new business in the first place. Choose a personal approach that fits your comfort level and a message that complements your organizational values. Try asking when it’s time to thank customers for their most recent patronage. Or, send them an annual review checklist on their business anniversary dates that includes a section appealing for referrals.
   
   
3. Work hard to be “referable.” If customers aren’t happy with your product or service, they aren’t very likely to refer you to others. Make certain that your customers are well served and fully satisfied before asking them for referrals.
   
   
4. Go beyond the obvious. Not all referrals come from current customers. Vendors and other business relationships can also be great resources. Make a list and target every individual with ties to your organization, including attorneys, accountants, and suppliers. Contact former customers and those you haven’t seen in awhile. They might not have a need to resume the relationship at the moment -- but they just might have a business acquaintance who does need your services.
   
   
5. Build alliances. To enhance their members’ workouts, a fitness center refers its members to a neighborhood chiropractor. That chiropractor recommends that his patients visit the fitness center to help improve their mobility and reach their wellness goals. Get creative and partner with a complementary business to exchange referrals.
   
   
6. Be willing to invest. A referral program isn’t cost-free, but when compared to traditional advertising, it’s astonishingly inexpensive. Organizations must invest time, energy, and incur minor costs in postage, cards, gifts, and occasionally incentives in order to cultivate good referral sources.
   
   
7. Mind your manners. Whether or not a referral actually translates into a paying customer, remember to always thank your sources for their recommendations. Send a card, flowers, event tickets, or gift certificates, or extend special next-purchase discounts. Doing so will inspire them to keep sending you referrals well into the future.