The Easiest Strategy For Getting Referrals for Your Small Business

By: Dan Kennedy on: January 18th, 2010 18 Comments

I want to talk to you about what is perhaps the most effective, yet underused referral strategy that I know which is to….

…simply ask for them.

Many business owners and executives, professionals and even sales people have all sorts of mental hang-ups about asking for referrals. However, most of those hang-ups are invalid and I find that those who ask get!

Now here’s a secret about customers or clients who refer that can be worth a great deal of money to you. Understand that the person who refers once can and will refer many more people, many more times if motivated to do so. Once a customer or client has referred someone to your business then that source of referral should be worked like the goldmine that it is.

You should know that massive research by major to consumer direct sales companies and organizations indicates that the average person has an immediate circle of influence of fifty-two. Fifty-two other people.

The typical executive, for example, knows about fifty other people at a similar executive level in his own or closely related industries. This number tells you that each customer or client who comes through your business could bring you as many as fifty other customers or clients.

You should also know that research by the American Management Association indicates that the average satisfied customer only tells three other people about the satisfactory experience. Moving that person from telling three to telling fifty does require some definite action on your part. That action needs to focus on the giving of recognition and appreciation.

When a satisfied customer sends someone to you the sender should immediately receive some recognition and appreciation. Possibly a quick thank you note or telephone call at bare minimum. That should happen right away. Subsequently some type of thank you gift is usually appropriate and effective.

We send steaks, books, clocks, calculators, small electronic items, knife sets, all sorts of things. I recommend gifts that you do not ordinarily sell and a different gift each time the person refers. You will really be amazed at the positive results from this kind of action.

You’d also be surprised, incidentally, at the negative results of not doing this. The client who refers once and fails to get recognition and appreciation will probably never say anything to you, but to himself and often to a friend or associate he does say, “Can you believe it? I sent that guy a customer and never got as much as a thank you.” And then he never refers again.

Again it’s interesting to note that a basic success principle often discussed in personal development context is also a marketing strategy. It’s called the, “Attitude of Gratitude.”

Finally, if you want to even more directly stimulate referrals from your customers or clients you might want to consider the second party gift certificate idea. Here’s how this works:

You’re a satisfied regular customer of a clothing store. The owner of the store says to you, “John as you know, most of our customers come as referrals from other customers and we appreciate that and try to encourage it. This month we’re doing something interesting that you might want to help us with and be able to do a favor for your friends too.”

The store owner then gives you a ten dollar gift certificate negotiable only by a second party that you, the customer, addresses to and sign it over to. This idea works extremely well for just about any kind of retail business, service business, home products business, restaurants, stores, beauty parlors, carpet cleaning companies and so on.

If you’ll use this idea, you’ll again want to follow it up with recognition and appreciation to the customer who does pass along a coupon that is ultimately redeemed by a new customer.

PS: Be the most informed entrepreneur in the room. Subscribe to the Morning Report.
“The best 2-minute read for entrepreneurs delivered to your inbox one minute before daylight.”


Dan Kennedy is internationally recognized as the 'Millionaire Maker,' helping people in just about every category of business turn their ideas into fortunes. Dan's "No B.S." approach is refreshing amidst a world of small business marketing hype and enriches those who act on his advice. For more money-making marketing tips, tactics and strategies, go to

18 Responses

  1. Great examples from Dan today on applying the principle of “ask and follow-up” to referrals. It’s truly amazing how powerful this simple concept is and also how many different areas of your business you can apply it to. It’s also amazing how few businesses do it consistently.

    Before leaving this comment, the first thing I did was to ask a colleague for a specific referral I’ve been pondering on for a month. I already have a gift in mind for when they come through.

    Thanks to Dan for once again giving me a swift kick-start right where I need it.

  2. Charles says:

    …simply ask for them.
    to focus on the giving of recognition and appreciation.
    referral sender should immediately receive some recognition and appreciation. Possibly a quick thank you note or telephone call at bare minimum.
    a special promotion:
    The store owner then gives you a ten dollar gift certificate negotiable only by a second party that you
    great ideas to implement.
    Dan how can i implement this on the online market?


  3. Rob Anspach says:

    referral marketing is the easist, most effective way to build your business…
    that being said… whats stopping you from asking each and every client for a referral?

  4. We have built into our sales process a mechanism to “ask” for referrals three times before the completion of the customers project. Plus asking for referrals every month in our newsletters, and as part of the sale 8 more times… Our business using this strategy is operating at nearly 40% of our sales being driven by referral!! IT WORKS, JUST ASK.

  5. in MLM (which I can’t stand!) one of the things they teach is that before you leave a meeting, ask “what three people can you refer me to?”

    1 x 3 x 3 x 3 x 3 x 3 x 3 x 3.x 3 x 3…… is a lot of people! (19,683 to be exact!)

  6. Brian Horn says:


    online is easy…you can totally automate it with services like InfusionSoft.

    Kinda like what Troy mentioned…

  7. An excellent piece, Dan. This is definitely worth bookmarking and sharing.

    It’s amazing how many salesmen go in, introduce their offer and leave. And never even ask for the sale. Not to mention that asking for referrals seems to be rocket science to them as well.



  8. Jim Rowe says:

    I often have guest tell me that they send all their friends and family to my restaurants. I have always said thank you but now I think a slice of the worlds best cheesecake will be my new way of thanking them.

  9. Just wanted to say that I really enjoy this blog. I’m just starting out at this as a new business owner so I really appreciate the great info!

  10. I just gave away a 42″ HDTV to one of my GKIC Chicago and Northwest Suburbs Chapter Members in our “We Want Dan!” referral contest (when we build our chapter to enough members, Dan has promised to come visit us).

    And we’re giving away another one in 6 months.

    Plus, we give away monthly $100 prizes in the contest.

    This has helped create a “culture of referral” in our chapter, encouraging members to “save a friend” and introduce them to our group full of forward-thinking entrepreneurs, business owners and sales professionals who “refuse to participate in the recession.”

  11. Rob Anspach says:

    A word of caution when offering referral incintives… Keep It Simple!
    If you make it overly complicated to earn a reward through your referrals … then redo the process and simplify.

    I offer a $20 reward for all referrals that become a client. It’s simple and easy for accounting to track .

    I realize it’s not a huge reward… but in most cases your clients would refer you for free anyway… So $20 usually is gas money or 2 tickets to a movie… Small enough to say you thank them… without breaking the bank.

  12. Donna Kopf says:

    In my new massage clinic I offer 2 Rewards Programs. A Client Loyalty Rewards Program: Buy 4, Get 1 Free and a Client Referral Rewards Program: Refer 4, Get 1 Free. Because if you are going to ask for one referral- you might as well ask for four … right? (I do include a $5 or $10 off coupon and a thank you note for each referral along the way- but I don’t really advertise that I do, it just appears in the mail as a thoughtful surprise.)

    Also, if a client calls to cancel their appointment, I ask if they would like me to reserve their space for a friend or family member in need of a massage. They wouldn’t want some stranger to take “their” appointment would they?

    I agree getting referrals without showing gratitude is biting the hand that feeds.

  13. Troy and Brian, great suggestion, build it right into the system. Donna, brilliant!

  14. Whoa!

    Great ideas there. Thanks :)

  15. Les Rose says:

    Great advice, and the gift doesn’t have to be real. In this virtual world, a virtual gift is also appreciated.

    I receive e-mail referrals from people all over Europe and the world.Clearly I can’t start shipping out products to all of them, and some are in buying positions where gifts can be looked upon as bribes.

    So what I do is send a short thank you by e-mail and insert an animated gif of a bunch of roses, or a medal.
    We all like to be appreciated and be treated as a person and it’s amazing how a little bit of personal appreciation goes a long way.

    It’s also a great way to make someone happy, when they are usually slogging away on their lap top all day, and it gets you remembered.

  16. You could also email them a personal video thank you made special for the,- it shows you took the time to make their effort on your behalf worthwhile and that you appreciate it!

    and it does not take long at all…

  17. Rob Anspach says:

    …I do a video once in a while… although I might just have to step up my game…

  18. When you get a video made especially for you, it adds a lot of “pssssh! factor.)

    It can be a camtasia, if not you yourself in the video…

Leave a Comment to Steve Sipress