There is little question that most business owners LOVE referrals… it makes total sense because:

• Customers gained through a referral are usually better
• It makes you feel good that people brag about your business
• Most hate the thought of advertising and…
• Referrals are free (mostly)

I too love a referral! That said I know very few successful businesses relying heavily on them. I know many struggling businesses obsessed with getting them.

Referrals are something you always want to maximize, which almost no business does, they just 'do a great job' and pray.

That said, you are now relying on your customers to be proactive. This is no easy hurdle to overcome and this is also why you get few referrals. It's not personal, they may love you. The problem is once the service is done they focus back onto their busy lives.

Localized businesses that focus too much on website presence and referrals have a hard time. You are allowing your business to be controlled by chance. The chance someone lands on your website (and decides to contact you or not), or hoping a satisfied customer carves out a hunk of time to promote your business.

You need to have as many lines in the water as possible if you want to be successful, If you own a service business this is even more of an issue.

To not have something out there to stimulate the marketplace to show interest in what you offer is suicidal. Do you really believe you can get more customers by referrals than you can with a smart advertisement?

I created a postcard for a window cleaner that generated more than $240,000 in sales. Do you think they get that from referrals in a short time-frame? Likely not in the lifetime of their business. Then again, this is why they are successful. They go get it.

Another thing to consider is that the average business has an attrition rate of 20%, That means at least 20% of your customers will not be back next year (due to moving, finances, death, competitor, or just bored with you).

Now you need to get enough referrals to make up for that 20%, and much more to actually grow.

Are referrals better than advertising? Yes if you can generate enogh with great referral systems. Work on being more proactive in how you get referrals. Put on your marketing hat and ask yourself "how can I get this customer to refer me".

Why should they refer or talk about your business (keep in mind doing a good job and having great customers service is expected, making it uninteresting)

If you sit and wait you may as well grab a shovel and start digging, because your business is dying.

Do something right now! Improve you referral strategy AND get some damn ads out there! The more ads out, the more customers in. The more customers in, the more referrals you can get.

Always remember- most of your profits are from past customers, not new ones. Create a better relationship and they will not only buy more- they'll refer a lot more.

go get some

Paul McQuillan

p,s, If you really want to get a lot more referrals for your business, take a look at this: Click here for more referrals