Regardless of your company's size, cultivating referrals can be an important business development tool. A customer referral speaks directly to the quality of products or services you provide.

Referrals are an inexpensive yet highly effective form of marketing. Customers who are comfortable with you, and trust your products or services, are more likely to refer their friends and acquaintances to you. A referral lead is probably the most qualified sales opportunity you can receive. In many cases, the deal is practically done before you meet.

Because a referral customer trusts the person who referred them, they are likely to do business with you unless there is a personality conflict or price problem. advertisement 
 
People ask friends, colleagues and neighbors they trust for referrals. Ask the people to whom you are giving the referrals to let the reference know that they were referred by you.

Also, it is important that while you are referring people to others that you be honest as to whether you have used their products or services yourself. If the information is from another source that you trust, make sure you make that known as well.

If you are a business owner, make sure you ask everyone you know for referrals and give them your business cards to distribute to their friends and acquaintances.

How are referrals most commonly generated? To paraphrase the real estate adage: Relationships, relationships, relationships!

The more people with whom you meet and develop trust, the broader your potential referral pool will be. Maintaining strong, positive connections to a broad group of colleagues increases your chances to be mentioned when a potential client calls on them for a recommendation.

Sometimes a strong testimonial, properly placed and effectively delivered, can create more value for an individual or business than a new client. One good testimonial can generate several new clients, and effective testimonials truly keep on giving. Support others and they will support you. The more testimonials you create and deliver for other people in your network, the more likely it is they create and deliver testimonials for you.

It's practically a given that your customers, vendors, friends and neighbors are going to be asked for a referral. It's in your and your company's best interests to make sure the name they mention is yours.