Smart business owners realize that a sale is not the end. It’s the beginning of a relationship with a customer that needs to be cultivated over time. One payoff is repeat business. But another benefit that often gets overlooked is a referral to a new customer. It can be a cost effective way to grow your business but some might feel sheepish about asking.

The reluctance to ask for referrals often comes from a fear that you’ll damage the relationship with your current customer. Yet the opposite is true. Think about the outstanding service you received at a new restaurant or the great selection of merchandise at that new store down the street. Wouldn’t you want your family and friends to experience the same thing? People want to share a good experience. That’s what a referral does.

Here are some ways to encourage referrals in a way that builds (not harms) the current relationship you have with customers:

• Give Them a Reason to Help – Consider offering and incentive to customers to spread the word. One way is offer a discount to the new referral and the customer who refers them. Some businesses have a coupon on the back of their business card. The customer gives the card to a friend who gets the discount. Once the card is redeemed by the new customer, the business mails a discount coupon to the referral source to use on their next visit.
• Catch Them at the Right Time – Customers may not have an immediate answer if you ask them to name someone who could use your products/services. But they might later. The key is to be visible when that time comes. So give customers multiple opportunities and reminders. For example, include a referral message in the signature line of your emails, have a referral form on your website, publicize referral rewards in your newsletter or add a P.S. referral message to your thank you note.
• Get Social – Use social media, like your business Facebook page, to raise visibility with your followers (and their friends). Entering the conversation positions you as a trusted source of information. When followers are planning a purchase, they are likely to consider you or recommend you to others.
• Jump On It – Referrals are gold. So don’t sit on them. If a customer takes the time to provide you with a referral, follow up promptly with them. It makes you and your current customer look good.

Don’t ignore the power of referrals to grow your business. If managed properly, they can build relationships with current customers and open the door to new clients.