The greatest compliment a customer can give you is their endorsement. How do you create referral business? If you work the system correctly, you can create hundreds of sales reps (referral partners) for yourself within 12 months. Here is how: 

Give. The first step in creating a referral system is to come up with a simple reward system. Figure your average ticket and determine what a sale is worth to you. Our average ticket is $2,000. If a person refers a paid sale over $2,000, we send them a certificate for $100. Paid sales below $2,000 are good for $50. If your average margin is 40%, you will be trading $100 to make $700. That is a great investment on a sale you may not have otherwise had. Our referral system has a proven track record where almost 90% of the sales close. What you give is up to you. The important part is that your message is clear and consistent. Keep your promises. 

Stay in Touch. Regular communication with your referral partners is the key to repeat business. When they receive their certificate for cash, your customer must drive to your location to claim it or they can use it as a credit towards a future purchase. While this may sound cumbersome, there is a theory behind it. When they visit your store, they are physically staying connected to your business. Invite them on a tour of your facility if they have time. This only increases your credibility with them. If a tour was conducted on the last visit, ask them if you can take a picture of them with the cash and post it on social media. 

Track it. A simple spreadsheet can be made to track referrals. Enter the customer, the referral partner, the dollar amount. Once the sale is paid and the certificate is sent, highlight the entire line. This is a great way to get a snap shot of how successful your program is working. We like to see a lot of yellow highlighting. Since some referral partners do not cash in their cards and continue to send business, we have determined a $14,000 per $100 ratio in closed sales. When advertising companies call to solicit our business, we ask them if they can guarantee better results, they can’t seem to hang up fast enough. 

Snowball Effect. Once you pay out a referral, word will spread fast. We love what we call a second-tier lead. This is when a customer sends a customer, who sends a customer. In most cases, you would have never had the third customer if the second one had not sent them. We have cases where we have fourth, even fifth-tier leads. At that point, the system becomes exponential and priceless. 

These are just a few ideas that are outside the box ways to create a referral system. I would love to hear some of your success stories. This article does not even come close to nailing down the details of our referral system. If you would like to hear the rest of the story, feel free to email me at to share!