In a nutshell, referral marketing is the process of developing a reliable network of well established clients who are actively engaging their colleagues, coworkers and friends about the products or services that you have to offer. In the modern marketplace, people are distrustful of traditional advertising because they are keenly aware that a business will do whatever it takes to attract new clients. When they hear about something that they can use from someone they trust, on the other hand, they will extend that credibility to that product or service. Once you have established a solid foundation of satisfied clients that have been educated how to promote your brand, you will have a steady stream of qualified referrals coming in for potential clients who are genuinely interested in doing business with you.

Effective referral marketing begins with two basic components, providing a product or service that people actually like and managing the expectation for referrals. While most businesspeople have an intuitive understanding of the importance of providing a top-notch product, all too many professionals drop the ball when it comes to actively engaging their clients on the topic of referrals. If you are genuinely interested in increasing both the quantity and the quality of the sales leads that come into your business, then the time is now to learn how to start building a referral engine of your own by using a network of existing clients who already know how great you really are.

If you are resistant to the idea of asking your clients to provide you with referrals out of a question of good taste, it is time to reexamine your thinking about the process of referral development. When clients refers one of their colleagues or associates to what you have to offer, they are doing so because they truly believe that your product or service can help someone else reach a particular goal. People enjoy talking about businesses that they have discovered that have provided them with solutions, improved their lives or saved them a great deal out of money. As a result, you are actually doing your clients a favor when you encourage them to spread the word on a product or service that you know that they love.