By Valerie Khoo (Valerie has a great business blog at valeriekhoo.com)
Sydney Morning Herald
When it comes to getting new customers, one of the most powerful sources of leads is through referrals. Good old-fashioned word-of-mouth. After all, many consumers are going to be far more influenced by their friends - or people in whose opinion they trust - than a paid advertisement. I'm not suggesting that you shun advertising but, rather, consider including referral marketing to your mix. That is, actively asking and encouraging your existing customers or fans to spread the word about your products and services.
If you have quality products and services, chances are that your customers are spreading the word anyway. But, sometimes, they might just need a nudge. Or to be given an easy way for them to pass on information about your business to a friend. Some may be ready to recommend you but could just need an incentive to take the next step.
However, we've come a long way from leads exchange networking groups where participants were actively encouraged to refer new business to each other. Those groups still have their place. But with so much communication proliferating online, referral programs can be implemented relatively easily and cheaply. Importantly, they can be rigorously tracked so that you can determine where your leads are coming from, exactly how much it's costing you and whether your resulting customers are worth the investment.
So what are some initiatives you could use?