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Some very smart people have responded. As the answers roll in, we’ll post the best answers with links back your websites here:

“Referrals are everything. If you are a sales person, always ask for referrals, whether you get that one particular sale or not. In my opinion, the value of referrals in a sales process goes up in direct proportion to the risk/cost/complexity of the product or service being sold. The riskier/costlier/more complex the product or service, the more a buyer will rely upon referrals to help them make decisions… and therefore the more you as a sales professional must focus on generating - AND EARNING - these referrals.” - Mark Seghers, CEO, ASK Insurance Consulting, LLC (http://www.askinsuranceconsulting.com)

“Your referrals are the show of your quality. They are the ones that really build your business.”

“I think referrals do work but they work better as part of an official referral program. I like to create a program that is mutually beneficial so it gives more incentive for people to give the referrals. They are much more willing to help you out if they get something in return. It also makes the process a lot smoother. Let’s say, for example, you’re selling technical services and you feel a little awkard asking for a referral from a particular client because things didn’t go 100% according to plan,(as things often do in any industry) - a few glitches in installation or whatever…..even if everything else went well this customer may or may not be willing to give you a referral. BUT if you have a program in place that can he / she can benefit from then that’s a different story. (This is a customer referral program I’m speaking of). There are also agent referral programs, which can REALLY be beneficial, if established and run properly. And depending on how the company wants to set it up, a customer can also be an agent.”

Inexpensive online rewards programs help agents improve CLV

ReferNow.com, the leading web-based customer and referral rewards program, announced a new program that helps insurance agents increase Customer Lifetime Value (CLV).

Customer Lifetime Value (CLV) projects the value of a customer over the entire history of that customer’s relationship with a company. Agents that measure CLV generally place emphasis on long-term customer satisfaction, rather than on maximizing short-term sales.

ReferNow.com helps health, auto and life insurance agents leverage their relationships with existing customers and increase CLV by offering rewards for new customer referrals.

Referrals are my bread and butter, said Bill Levin, co-founder and president of www.HealthInsurancePricing.com an online portal that allows consumers to price various health plans. “I see so many agents spending thousands of dollars on new customer acquisition this approach is becoming less and less effective. The best way to grow your business in the long-term is by mining your existing customer base for referrals.

The cost of acquiring one new customer is staggering, said Nicole Wicks, president of ReferNow.com. “Asking for referrals from your existing customers is one of the easiest things you can do to rapidly increase the value of every customer you worked so hard to acquire.

Wicks says, agents who use ReferNow.com and actively conduct a referral marketing campaign will inprove CLV, lower advertising costs and increase the number of referrals they receive.

“Whether you are an independent agent or a marketing coordinator for a larger agency, asking for referrals from your existing customers can quickly build your business, said Wicks. It is the best way to increase the CLV of every customer. Plus, at $49.95/month, ReferNow.com quickly pays for itself.

About ReferNow.com

ReferNow offers an online referral rewards and marketing tool that motivates your customers to talk about and recommend your business from day one! ReferNow.com has helped business owners and sales people increase their referral business by as much as 500 percent. ReferNow.com is available for a no-risk 30 day trial from the company’s website at http://www.refernow.com.

Big hitters are the ones that have overcome the fear of asking for referrals. Paul McCord conducted a survey of sales people and his survey finds more than 90 percent of salespeople are poorly positioned to maintain production if the economy slows, according to a survey of 2,500 salespeople in the United States and Canada.

Seattle Times

http://infotech.indiatimes.com/ITs_taking_internal_referrals_seriously_/articleshow/2074731.cms

“Internal referrals fulfil more than 50% of our requirements. Apart from the base incentive defined across our requirements that vary on the level or band at which the referred candidate is recruited, we also give employees an all-paid vacation and other incentives, if they help recruit for special/rare skills,” says Shantanu Banerjee, director - HR, Xansa India.

While browsing the web, I came across a great abstract by V. Kumar on Customer Referral Value - the other side of Customer Lifetime Value.

In this research abstract, Kumar states

“Many firms are now using viral marketing programs to harness the power of word-of-mouth and referrals in order to acquire new customers. We introduce the concept of Customer Referral Value (CRV) which quantifies the value of the referrals that each customer gives to the firm. We not only demonstrate how to measure CRV, but also illustrate how to maximize it. We show the role that CRV plays in evaluating the importance of each customer to the firm is critical. This is because many of these same firms are using customer selection metrics like CLV (Customer Lifetime Value) to identify their “best” customers and then allocating resources to those customers with the highest CLV. In the process, these firms frequently alienate low and medium CLV customers because of the lower level service provided and the differentiated treatment. An important question is whether these low and medium CLV customers may in fact be of value to a firm due to their word-of-mouth and referrals and if so, what is this value to the firm? In this
study, we show that customers who tend to score highly on CLV often do not score highly on CRV. In fact, it is indeed the low and medium CLV customers who score highly on CRV. Therefore, any customer management strategy must take into account both the CLV and the CRV measures when determining the value of any customer. We also show through case studies how measuring and implementing marketing campaigns that consider both CLV and CRV can lead to the firm better understanding who their high value customers are and their characteristics.”

I will attempt to track down this research and if possible, link to it.

(PRLEAP.COM) Santa Monica, CA (May 3, 2007) - ReferNow.com, the leading web-based customer and referral rewards program, today announced a new program that helps independent plumbers, electricians, lawn care and other trades compete more effectively against national chains. ReferNow.com gives plumbers and other trades the ability to create and manage customer referral reward programs.

http://www.prleap.com/pr/75907/
www.refernow.com

Online referral marketing tool helps Iowa printer find new customers.

Santa Monica, CA, May 4, 2007 - ReferNow.com, the leading web-based word-of-mouth customer reward and referral management and measurement system, today announced a new program that helps print shops find new customers.

ReferNow.com gives printers (self-service print and photocopy shops, pack and ship retailers and offset printers) the ability to create and manage customer referral programs. Like a “customer rewards program” - ReferNow.com helps track and manage referrals, points and any referral rewards the printer is offering.

“Print-shops can reduce the cost of finding new customers by running aggressive referral campaigns,” said Nicole Wicks, ReferNow’s president. “Referral campaigns are inexpensive and they are the best source of new business for any company. ReferNow has the capability of providing any business with a system that motivates customers to talk about and recommend a business to friends, family, and associates.”

http://www.printondemand.com/MT/archives/010884.html

Everyone knows that exercise and eating will make you lose weight! The idea is simple. So why doesn’t everyone do it? The same holds true for marketing and sales. You know referrals cost less than traditional advertising. You know referrals usually create better, more profitable members. So why aren’t you asking for and receiving more referrals?

http://benbradley.net/2007/05/03/the-difference-between-knowing-something-and-doing-something-about-it/
www.refernow.com