A referral is the best compliment in business that you can get. A referral from an existing customer is the most powerful marketing tool that you can use. It is also the most cost-effective. It has more impact than any marketing brochure or advertisement. It opens doors. Yet most salespeople forget to ask their customers for referrals.

Research indicates that making one referral-generated business call has the same impact as 12 cold calls. When you ask for what you want, you often get it. When referred, your business becomes more profitable with less effort. Because you have been endorsed and pre-qualified, you build trust with your potential customers much more quickly. It dramatically increases your ratio of "closed" sales, because you have actually been "pre-sold." Your referral source identifies a need and recognizes that you are the solution. All that's left between you and your customer is the chemistry.

A satisfied customer is generally glad to help and will provide a strong testimonial for your company. A referral often accelerates the sales cycle because your prospect relies upon the confidence and trust that the existing customer already has in your company and its products. Set yourself up for success by asking for referrals with every customer.

Is there a way to predict the future value of your current business contacts? Can you immediately foresee which new contacts hold the key to fabulous opportunities for you? Of course not. Knowing this, your best strategy is to treat every contact as if that person is the most important contact you know.

Treat people with respect and let them know you value their acquaintance. People like to feel important; let them know they are. Tell them what you see in them that causes you to feel that way. Do you think they would be great source of referral business? Tell them. You will find people appreciate feeling important and they will feel confident about referring others to you as a result.

There is power in written words. We have all heard someone say, "Show it to me in writing." Or, "I'll believe it when I see it." Long ago, hotel managers discovered that the only way to ensure their guests left on time was to post the check out times in writing. Likewise, people often respond more favorably to written correspondence. If someone contacts you as a result of a referral, be sure to promptly acknowledge the referral source in writing.

Written acknowledgments make you indelible in others' minds. People remember what they see more easily than what they hear and many people keep the correspondence they receive. Sending a note causes people to remember you. This results in you receiving more referrals from that person.

Following-up with your business contacts usually requires a few hours a week. A brief phone call or note is all it takes to update your business contacts about the results of the referral or discover what happened with referrals you gave them.

Following-up is a courteous action that inevitably makes people feel good about referring again because you are letting them know you took action as a result of their referral. The return on this small investment of your time can be many referrals. Little things can make the big difference.

When you receive, give. It's a principle that is fairly simple and even obvious, but executing it can be the bottleneck. Don't let your busy schedule take your mind off what is important. Remind yourself of those who have helped you. If you received a referral, give a referral. This encourages others to refer to you even more.

Think of the variety of telephone calls and business correspondence you receive throughout a busy work week. How many calls or letters were simply to say, "Thank you?" Remember how good you felt the last time someone gave you a sincere word of thanks? People feel good about doing things for others, but receiving acknowledgment makes them feel better about themselves and the person who acknowledged them.

Two simple words yield phenomenal results. Best of all, these are fun works to say because you feel good about yourself for making someone's day. Ironically, a sincere thank you is rare in today's busy world. Seek to change the status quo. When you increase the number of positive exchanges that take place during your week, the net result is an increase in business referrals because people feel good about you.

Being knowledgeable is one of the best ways to win referrals. Not knowing and admitting it still enables you to win referrals. Winging or faking it is a surefire way to lose referral opportunities. Whenever a person asks you a question you cannot answer, admit it. Don't give answers you think people want to hear. Don't misrepresent yourself or your company by overstating your capabilities. If you guess, everyone loses. You put your reputation at risk by delivering a substandard or incorrect solution; your contact loses either money or time. Sparing one awkward moment is not worth risking your good reputation (and the referrals that come with a good reputation).

No great ideas ever entered the mind through an open mouth. Remember, we all have two ears and one mouth. This is the ratio of how much we should listen versus speak. People appreciate being heard and understood. The value of listening is evident to many salespeople; however, after an objective evaluation, many are surprised to discover they do just the opposite.

Many people who assume they are good listeners do not realize they need improvement until a problem occurs. Have you evaluated your listening skills lately? When speaking to someone do you listen - actively listen? Do you think about what you are hearing? Take notes? Ask questions? Repeat back what you think you heard? Continual refinement of your listening skills enables you to learn about the people who will inevitably like you, remember you, and want to refer you to others.

Use memorable phrases to describe your service. Consider the plumber who says, "A flush is better than a full house." Or the insurance company who says, "If you drive it, live in it, or work with it, we can insure it." Create a memorable phrase to describe what you do and you will get more referrals.

If you do not have a competitive advantage, don't compete. If you have a competitive advantage, tell everyone. What does your product or service do for your customers that separates you from competitors? Make certain you focus on the benefits of your products or service; i.e., How can you save your customers time, money or aggravation? People need to understand what makes your product or service different and better, so they can enthusiastically refer you to others.

Always be interrupted in obtaining new business, even excited, but do not appear as if you really need the business. What kind of behavior makes you appear in need? Self-deprecating comments about yourself or your business are "red flags." How would you feel if you heard the following comments from someone?