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4 Types of Effective Referral Systems

Referrals often happen when they happen and, while you can't always control when one friend asks another for a referral, you can influence how often your referral sources think about referring your business.

Referrals are important in business growth. You should look to build multiple referral systems, which gives your customers and clients opportunities to refer you. Here are some of the strategies you can adopt into your business to grow your referrals.

1. Direct referrals

A direct referral programme is the type where you simply state to your existing clients an offer for the act of creating a referral that turns into a client.


  • "Refer a neighbour to our building service and we'll give you the use of a carpenter for a day to fix those nagging projects around the home."

This is an approach that is both motivating and connected to what the business does.

2. Implied referrals

This type of referral is terribly under utilised. In an implied referral programme you want to do things that make it very obvious you are doing work for someone, without necessarily asking for a referral. This sets up a situation where a friend or neighbor might simply ask you to refer the person running an implied referral programme.


  • A building contractor might send a series of letters to neighbors around a project home informing neighbours to call if there are any issues.

Creating a project progress book, with snapshots from each stage of the build, so that the home owners can use it as a tool to show friends when they visit after the home has been built.

3. Tangible referrals

With a tangible referral you put something in the hands of your customer that has real value and that they can give to a referral source. The thing I like about this tactic is that you can run it three or four times a year as a low cost, low exposure way to keep referrals top of mind.


  • Once a quarter or so you send out a $100 gift voucher to your best customers and ask them to share the gift with a friend. It makes the act of referring simple and tangible and you can always reward your client when those gift vouchers turn into customers.

  • "Bring a friend for free" or "give a friend a free product" can also be effective referral approaches.

4. Community referrals

There are so many community organisations that need and deserve your support. When you partner with a non-profit player and support their mission, events and needs you can also offer promotional support by running the occasional promotion that benefits your partner.


  • When you buy this week or sign a contract this week 10% of the proceeds go to benefit our community partner.

Your partner benefits from whatever sales occur and they are certainly motivated to talk about and refer your organisation to their constituents.

Using these four elements gives your referrals a multi-avenue approach. Creating strategies around these avenues are important which is why we've listed practical action steps here.