The secret on how to double your sales in the next 60-90 days.
-Implement a “formal” referral program.

Make the most of one of your greatest assets – your existing customers! Your greatest wealth is in your own back yard!

Many people ask me, “What is the fastest way to grow sales?” And my answer is always the same,

“Make the most of your existing customers,
instead of looking for new ones.”

Statistics show it is five times more difficult to get new customers than to get business from existing customers. Further, because you have already made a sizeable investment in getting your customer base, so does it not make sense to leverage it? The second biggest asset that your company has (the first are your employees), is your customer base.
When you are always chasing new customers, you’re not running a business – you’re running a promotion. The purpose of business life, according to the late Peter Drucker, is getting customers and sustaining them. The key word here is “sustain.”
In my Special Report Number 15 (under recommended reading on my web site), I showed you that two-thirds of the revenue is always on the “back-end” not the front end. So just by always getting people to buy, you are missing out of nearly two thirds of all revenue opportunity.
So if you want to grow sales, focus on your existing customers:
• Get them to buy more
• Get them to buy more often
• Get them to refer more

In this report I focus on how to get them to refer more. I will walk you step by step through establishing a “formal and systematic” referral system. This system will ensure your customers become your 24 hour a day, no cost sales force!

I will even show you how I was able to triple the sales of my own company in four months by implementing a formal referral system. Believe me, referrals work! (A “Formal Referral System” is a secret known by all top-flight marketing professionals.)

Have you looked at your business lately? You may be surprised!

Most people get their business in one of a few ways:
• Hire professional sales people
• Use the telephone
• Send out mailings
• Get referrals
In a majority of cases, the business usually comes from referrals. In the case of small business, usually more than 80 percent comes from referrals.
Small business owners – (a doctor, dentist, optician, handyman or insurance agent, for example) always tell me the majority of their business comes from referrals.
I recently worked with an insurance agent who was spending $1,000 per month on web leads, but when I asked him where the majority of his business came from for the year, he answered referrals. Then I asked him why he was spending $1,000 per month on leads. He agreed that the leads were very cold, mainly people just browsing the web for quotes, rather than well-qualified prospects that he would have gotten if he asked his existing customer base for referrals.
One of the most important things I teach in my sales training classes is that the only difference between a poor sales person and a top sales person is that a poor sales person focuses on suspects. A top salesperson focuses on well-qualified, hot prospects ready to be closed. And referrals are the quickest way to get to these folks.
Although most business owners claim they have a referral system in place, it’s not true. The way I identify this is by asking questions. Is it:

1. Disciplined?
2. Systematic?
3. Measured?
4. Monitored?
5. Tracked?
6. Consistent?

Most will answer ‘NO’ to these questions. You see, their definition of referrals, and my definition of referrals are two entirely different things.

I define referrals as formal – A process whereby you proactively manage the referral generation process.
Within seconds you can tell me what percentage of your business comes from referrals, because you instigated it and you are able to track results. Compare it to what most business people do, leaving referrals to an ad-hoc process. They hope customers will refer them based on the quality of their work, without any formal initiation. They assume their customers will automatically refer them.

As I say in my book Marketing is King!, one of the biggest mistakes you can make in marketing is assuming rather than asking. Never assume, always ask.

Accounts receivables, for example is a managed system in most offices. Thirty days net is standard. That process is managed.
It works the same way with a formal referral system. It’s a mechanism, a system to ensure you ask each and every one of your customers for referrals. Without one, you:

limit the amount of business that a customer can do with you, because you are not allowing your customers to introduce you to their friends and other business associates.
let money slip right through your hands!

Now that we know most of our business comes through referrals, let us formalize the referral generation process and make life a lot easier. Most likely, no one ever taught you how to get referrals in a systematic and logical fashion! I hope this step by step guide is able to help you make the shift.
Stop living in a world of probability and start living in a world of possibility!

Word of mouth advertising is the best form of marketing, plus it is FREE! All you need to do is to put a formal system in place that allows the word to spread! It is probably the most powerful yet simple thing you can do for business.

Been there, done that, check! The recipe is proven!

Several years ago, I was managing a start-up of one of the fastest growing companies in the USA. Its sales were about $300,000 at the time, and it had been in business for six months. It was losing money when I was appointed division director.
The first thing I did was to implement a formal referral system. I got all my sales reps to ask each and every one of their customers for referrals. Within four months the sales had tripled! We achieved profitability, and I got a great bonus check!

Don’t make life more difficult that it needs to be!

As I’ve repeated, referrals are the quickest way to grow any business. Look at the INC 500 fastest growing companies in the country, and you’ll be surprised to learn that most say very clearly that business grew through referrals!
Why focus on referred customers? Because it’s a fact that those customers:
– Don’t haggle on price
– Buy fast
– Are already super hot, well qualified
– Are the most loyal
– Are the most profitable
– Buy more
– Buy more often
– Refer more—A never ending process
– Become your silent sales force.


It’s not how many referrals you are getting. It’s about how many you are losing!

If you are still a little skeptical about the power and impact of having a formal referral system, let me prove it to you another way.
Most people I present this argument to agree with me, but insist their sales force asks for referrals on a regular basis. I push them again and say, “Out of every ten customers you have, how many do your sales force ask for referrals on a consistent basis? Their answer will usually be: “Oh, at least 70 percent.” Then I call the sales rep directly and ask him or her, the answer drops to “about 50 percent”! Be honest with yourself!
But for now, I leave the benefit of the doubt, so my next question is: “On average, how many referrals come from one customer?” The answer is “about two.” So, if they are getting 75 percent referrals, they are still losing 25 percent of referral revenue!! This assumes all customers would refer at the same level.
You must absolutely ask each and every one of your customers for a referral or you limit the amount of business people can do with you and the revenue you can generate.

Go back to old-fashioned networking!

Referrals are nothing more than old-fashioned networking, and networking is one of marketing’s biggest secrets. Please read Special Report Number 16 on my web site under recommended reading.
All you do when you get a referral is network with your customers’ customers. Why is this so important? Because the biggest problem in marketing these days is getting people’s attention.
From the time that you get up in the morning to the time that you go to sleep at night, you see and hear some 15,000 to 30,000 ads! That includes everything from the ad on your toothpaste tube, to the ads in the newspapers, on radio, etc.
What people want today is your undivided attention! When I teach marketing, I tell people in my classes to imagine a line with at least 15,000 people ahead of you to get to who you want to get to! I said it in my book, and I will say it again: I hate Network marketing! The only thing that I like about it is that it works, and works wonderfully!

I am not talking about Multi Level Marketing, I am talking about getting to see the people you need see as soon as possible. We network all the time: When you want a quality doctor, dentist, plumber, or restaurant, you usually get it through a referral (basically network marketing).

The quickest way from A-Z is always through a network!
In the business world statistics show that it takes 15 cold calls to get to the equivalent of one quality referral. So if you are not asking for referrals you are making your life so much more difficult by cold calling!

Here is the added bonus. It’s a never-ending process!

The beautiful thing about referrals is that they never end! Once you take care of the new referrals, they will refer more people again!

In fact, on average statistics show that each person knows at least ten like-minded people! People move in networks of similar types of people.

If you manage the referral process correctly, you will set up a cash generating machine!

Because people continue to refer you time and time again, you will never need to do any formal advertising again. Million dollar businesses have been built on referrals alone!
I call referrals the compound interest of marketing! Let the math work for you! Here’s how it works. If I gave you a dollar and told you it could double in value every day if you made the right investment, how much would it be worth in 30 days?

Days Amount
1 2
2 4
3 8
4 16
5 32
6 64
7 128
8 256
9 512
10 1,024
11 2,048
12 4,096
13 8,192
14 16,384
15 32,768
16 65,536
17 131,072
18 262,144
19 524,288
20 1,048,576
21 2,097,152
22 4,194,304
23 8,388,608
24 16,777,216
25 33,554,432
26 67,108,864
27 134.2mn
28 268.4mn
29 536.8mn
30 1 Billion!!!


In the same way, one customer referring two customers per day would mean that you could have one billion customers in 30 days!!!

Let me show you how to get referrals

Now that you appreciate the power and impact of referrals, you know it must absolutely be a part of your marketing growth strategy – if you are to be successful at maintaining a constant stream of revenue.

Most companies tell me that they have a problem with sales, in that they are not consistent. My response to them is that it is not a sales issue, it is a marketing issue. A sale is no more than a result of doing your marketing right in the business world. Please read my Special Report Number 19, found under recommended reading on my web site. Here I show you the relationship between sales and marketing.

You see, if you always ask all your customers for referrals and ask all your referrals for referrals in a systematic and logical way, then you will never have a problem getting business. It must be done in a systematic way.

Getting referrals is a three step process

1. Get all your existing customers to refer you to their customers, friends, and business associates – get access to their Rolodexes!
2. Get the referred people to buy!
3. Get the people who buy to refer more! Yes, back to step 1!

Now, let me make one thing clear, the reason you ask for referrals is because you believe you deserve them – based on the quality of the product, experience or service that you provide!

You simply want to help more people. You absolutely must believe this. You are doing your customers a favor by allowing yourself to help their friends. If you don’t think like this, then don’t bother asking for referrals! Marketing is always about being good and helping others. Referrals make you perform at your best!

Unless you are good at sales, you will never be able to implement a formal referral program. My recommendation is that you read my Special Report No.11, How to Sell Anyone, Anytime. (Again, it can be found at my web site under recommended reading.)

Get your MS (Master of Sales) first!

Most people I have worked with on a one to one basis very quickly understand the importance and significance of referrals, but when it comes to implementing a formal referral system, have no idea how to move forward, because they are not trained in sales. Sales is a process, and it takes a series of steps to get referrals.

How to implement a formal referral system

1. Write a letter to all your existing customers and ask each of them to refer you to their friends and business associates.
2. Follow up with every one up via a phone call one week after sending the letter.
3. Meet your existing customer in person.
4. Get the names of 3-5 possible referrals.
5. Send a letter to each of those referred (hot prospects).
6. Follow up every one of them with a phone call one week after sending the letter.
7. Meet the new referral in person.
8. Get the names of 3-5 more possible referrals
9. Go back to step 1!

Yes, it’s a never-ending process!

Bonus Tip!

Don’t just approach your existing customer base, go to people who’ve used your complimentary products, and ask them to refer their customers to you!

Most conventional marketing texts call these Joint Ventures. I believe it’s still old-fashioned networking and referrals at work!

I hope by now you are excited about what referrals can do for your business. Successfully implementing a formal referral system is like striking oil!

My experience has shown that each customer on average will provide two referrals (what I call the referral ratio) and on average the conversion ratio is about 60 percent.

Do you need to pay to get referrals?

Many people offer what is known as an “ethical bribe” (some form of monetary incentive). Do you need to do the same thing? Answer the question this way:

1. It costs you to get a new customer anyway, so be generous if you do offer a monetary incentive. Simply calculate how much it costs you to get a customer = your total marketing spend/amount of customers you get, then offer 50 percent off.

2. If your product or service is exceptional, you will not have to offer any monetary incentive. Your customers will go out of their way to provide you with referrals.

Do what all top flight marketing professionals do – TEST! Find what works, then change your approach.

If you have heard me speak in the past, you will have often heard me say that I am a big believer in systems and procedures. Be it the stock market, sales or referrals, the only way to be successful is in using systems and procedures to ensure all opportunities are followed up in a systematic and disciplined way. Otherwise, you will lose opportunity.

What if they don’t want to give you a referral?

If any of your customers do not want to give you a referral, view it as an immediate red flag. It tells you that you are underperforming!

In the world of marketing, feedback is food for champions. Find out the underperformance problem, and make the necessary corrections in your product or service. Feedback = Improvement!

You simply cannot lose by asking for referrals. You will either get them, or find out what you need to do to improve your business effectiveness!

The numbers are in your favor!

Before we move onto some real world examples of how to get referrals, let me show you a matrix that I developed and use to show my clients how simple it is to double your sales by implementing a formal referral program.

The table below shows an example of a theoretical company that has 100 customers or clients. In the first column are the clients, the second column shows the referral ratio (how many referrals gained from each customer), and in the third column, you can see the conversion ratio (how many of the referred clients or well-qualified prospects are able to be converted to “real paying customers”).

As you can see with the different mix of referral and conversion ratios the ability to double or even triple the number of new customers and sales is relatively simple.

Add Image Here

When I present this very simple chart, most business owners are “blown away.” I simply remind them that the math is in their favor when they choose to work it!

Real World Examples from my files

However much I try to explain the power and impact of referrals, some people like to see the real thing. The best way to teach is to show. So below are two actual referral letters I wrote for my clients. Both got incredible responses. One received 21 referrals from one letter, and the other was so strong that the agent was worried how he would handle the response, so only sent it out to a limited number of customers.

Please study these letters and jot down what you learn. Simply adapt these to your unique situation. You have my permission to do so. But please don’t forget to e-mail me your success stories to, with the headline ‘success story.

Case Study Number 1: How to get Referrals

A Self Employed Consultant. This letter / e-mail got 21 referrals from one customer alone!

Business is great! But I want to help more people!

Dear X,

Since we last spoke, business has been booming and I’ve been adding a number of new high profile clients. Over the last seven months, I have added a major Bay Area real estate investment company, Publicis Dialog, the world’s largest advertising agency, and have been managing the website of the new 10 million dollar San Francisco Rock and Roll Hall of Fame! (So I suppose you could say business rocks!)

I believe I’ve been so successful because I’ve invested more time where it is best utilized, and that is in creating solutions and strategies to significantly increase my clients’ marketing effectiveness and income, and spending less time seeking out new clients. By default, I’ve discovered that my time is better spent adding value to my clients rather than cold calling to add new clients.

I very much enjoyed the engagement I did for you, and hope it’s been beneficial to your organization. I would like to offer the same level of service and value to your friends and business colleagues, so they may also benefit by developing long term and sustainable marketing strategies. I want to help more people!

I would like to meet with you to update the project, and to see what I can do to help you get to the next level. I would also like to use this opportunity to obtain a short list of quality people like you that you feel would benefit from my service.

I’ll call you next week to schedule a convenient time, and I look forward to catching up with you.

Respectfully yours,

When my student followed up after this letter, he got 21 referrals from one person! He didn’t need to follow up with others, because he only had 50 customers!

Case Study Number 2: An Insurance broker. This letter / e-mail got three referrals from each person who received it.

Business is growing, but I want to help more quality people like you!

Dear X:

I hope you enjoyed the holiday season and wish you health, happiness and success in 2006.

Year-end is always a time to reflect back on accomplishments and plan for the future. I’ve reviewed all my client files, and looked at the estimated savings I provided by recommending insurance policies to provide optimal coverage. I want to make sure you do not over- or under- spend and get maximum value for your money.

And of course, I want to make sure that all your information is up to date. I am proud to say that on average I save each client about 27 percent overall over other insurance options.

Unlike most insurance agents, I periodically review your policies to ensure they provide you, your family, and assets with maximum protection.

I actively send out mailings, informing you of important updates in the insurance field. I ask for a face to face meeting at least every six months. I want to be seen as part of your extended family, and only stop working when I know all my clients are covered against life’s unforeseen changes.

Building any business is tough these days, but I believe I’ve been successful because I invest the time where it is best utilized, that is, with my clients.

By default, I’ve discovered that most of my business for 2005 came from referrals. I’ve been blessed because people have been so happy with the knowledge, education and protection I have provided.

So this year I want to spend more time working for you, my existing clients. Our industry is changing rapidly and there are so many alternatives and options available.

All this takes time, and does not allow me to do conventional marketing. As such I ask, that based on the level of service you’ve received, if you will refer me to your friends and business associates. They will also enjoy the uncompromised level of service and protection I provide.

Should one of your referrals purchase a policy, I will send you a check for $XX per policy as a small sign of appreciation. I will also offer a 10 percent discount on every first policy, to ensure we can start our relationship as quickly as possible.

Finally, since it’s been a while since we last met, I would like to get together with you to catch up and see if I can help you. Many times as our lifestyles change, policies need to change, too. I would also like to use the opportunity to obtain a short list of quality people you feel would benefit from my service.

I’ll call you next week to schedule a mutually convenient time, and I look forward to seeing you again.

Thank you for trusting me to take care of your insurance needs. Rest assured I am always working and looking out for your best interests.

Respectfully Yours,

The insurance agent decided to send this letter to only 10 of his 300 clients, because he was worried he could not handle the response!