I personally know of several very successful small businesses that don’t spend a dime on advertising? Why? Because they have implemented a referral marketing program that automatically brings in more clients than they need.

The very best way to get a new customer is to simply ask a happy customer for a referral. And do you know the best thing about referred customers? You will almost always be able to charge them full price because they are presold on your quality and work.

This article discusses three very simple but power referral marketing strategies. Pick the one that most appeals to you and work to implement it in your business today.

Referral Marketing Strategy #1: It takes One to Know One
Don’t dismiss this referral marketing strategy as too simplistic. I promise you it is very powerful. Here’s how it works.

As soon as you have completed a successful transaction with a good customer, simply ask, “Do you happen to know anyone like yourself that would benefit from my products & services?” The key to this referral idea is twofold.

1. You have completed a transaction with the customer that ended in high satisfaction.

2. You have asked for the referral at the point of maximum impact.

You’ll be amazed by how much new business you can bring in by just asking a happy client for a referral. Most satisfied customers will be happy to provide a name or two upon request. Don’t be shy about this one. It may be simple, but it works!

Referral Marketing Strategy #2: Show Me the Money
This referral idea uses the idea of complementary businesses. A complementary business is one that serves the same target customers as your business but is not a direct competitor. For example, let’s say you owned a roofing repair company. Complementary businesses would include other types of home repair business such as weatherproofing, tuckpointing, remodeling, etc.

I recommend only approaching businesses you have some type of established relationship for reasons that will be obvious in a moment.

Work with one business at a time and ask them to mail out a letter to all their clients introducing your business and recommending your products and services. In return, you promise to pay the company a percentage of all sales that you obtain through this mailing.

Don’t be stingy here – make it worth their while. While you may need to offer 25% or more of first-time sales produced, the value comes from retaining these customers for future business.

This referral idea really does require you have a trusting relationship with the complementary company as they will be relying on you to track the business you book from the mailing.

Referral Marketing Strategy #3: You Scratch My Back & I’ll Scratch Yours
This referral marketing strategy is simple but powerful. Your client sends you people that make a purchase and you give them coupons worth 20% off a specific product or service.

Let’s say you are a consultant and have an established relationship with a client for whom you are working on a project. The project is a day-long training event and you are charging $2,000. You tell your client that you will knock 20% off the price for every client they send you that makes a purchase.

What makes this system so compelling is that there is no limit to what they can save. If they send you 5 prospects that end up doing business with you, then their $2,000 training session is free (5 x 20% = 100%).

Would you trade a free service for five new paying clients? I would! This referral provides a strong incentive for the client to send you good referrals.

Pick one of the above three referral strategies and work to integrate it into your business. You’ll be surprised by the results!

Corte Swearingen is the creator of the Integral Marketing System and CEO of SmallBiz Marketing Tips. For more information, please visit Building a Referral Marketing Strategy.

By Yvonne Meacham Buchanan

Wouldn’t it be deadly dull if everything was the same? One type of breath mints: Tic Tacs cinnamon. One flavor of ice cream: pistachio. Variety is the spice of our lives. It’s what makes the eyes twinkle, the taste buds tingle, and the ad guys rich. If every toilet paper was squeezably soft, what could you say about Charmin?

As we all know, though, every toilet paper is squeezably soft (unless you’re in a public restroom – where do they find that stuff?). But Charmin was the first to call itself squeezably soft, and they communicated this message every chance they got using a variety of methods (a spokesperson who couldn’t resist squeezing the Charmin, soft focus product shots, splashy magazine ads, billboards, you name it.) This is what’s known as differentiating a product. It also positions the product within its marketplace: if Charmin is squeezably soft, where does that leave its competitors? They’ll have to come up with another “position” because that one’s already been filled.

The above is an example of how advertising positions and differentiates. But who has the bucks to do an expensive ad campaign like this one?

Let’s take a look at how we can do the same thing (albeit on a smaller scale) with public relations.

A public relations program for differentiating Charmin might work something like this:

• Attend the major bathroom product trade shows. Set up meetings in advance with bathroom paper analysts and the editors of Toilet Paper: Just Kleenex On a Roll?, Two-Ply Gazette, and Bathroom Products Journal. (Of course, I made these up)
• Hold a “Softest Toilet Paper” contest. Publish the results; Get media coverage. Send demo products to toilet paper reviewers.
• Get Charmin’s spokesperson on the popular talk show, “Potty Talk.”
• Garner an industry award. Send a press release.
• Do a press tour of the bathroom paper trade magazines.

I won’t go on because I’ve still got that product demo image in my head, but you get the idea. In all of these activities (called “tactics” in PR lingo), the key message would be reinforced, like a mantra: squeezably soft, squeezably soft, squeezably soft. Pretty soon, the target audience (people who use toilet paper) find themselves thinking: “I think I’ll buy Charmin this time. I don’t know why, but I have this feeling it must be squeezably soft.”

For larger organizations like Charmin’s parent company, Procter & Gamble, a combination of advertising, marketing, merchandising and public relations is used. But if you can only afford one avenue, public relations can be an effective, low-cost way to differentiate and position your company, its products or services.

Yvonne Meacham Buchanan is a public relations instructor for PR Essentials, an online public relations course available through Careers in Public Relations http://www.careers-in-public-relations.com.