I talk to lots of small business owners and marketers about referrals. One of the burning questions always revolves around the topic of motivation. In other words, how do you motivate someone to refer your business when the time comes. Or, the perfect situation, how to do you get them to proactively evangelize your business.

The tried and true approach (although while it’s tried I’m not sure it’s really true) is to offer incentives. You do this I’ll give you free service or $10 bucks. This can generate some business, but I’ve found that over time it won’t create evangelists, in fact, it may turn evangelists off.

Highly motivated referral sources do it for two reason – 1) they think you offer a good deal, good service, something of value and 2) they know, like and trust you enough that they want to help, want to see you succeed, want to connect at a deeper level and be a part of what you are doing – particularly if that can help a friend.

So, can see how payola could actually demotivate that second reason.

I did two interviews this week with successful business owners who had moved their entire marketing focus to systematically generating referrals. In both cases, they had started with traditional pay for referral approaches and quickly realized (in some cases with direct input from the referral sources) that appreciation was all that was needed. In other words, keep us in the loop, thank us, send us the occasional handwritten note or unexpected gift – and keep providing over the top service to our friends.

Mike MeDerment with FreshBooks.com says that his most successful referral tactic for his online business is to make personal thank your calls and invite local customers for a dinner when he’s on the road at a conference.

Zane Safrit of Conference Calls Unlimited sends referral sources the occasional stunning bunch of flowers from out of the blue. That bouquet sitting on the desk does more to generate word of mouth than all the 20% off your next purchases in the world.

So, when designing your referral system consider making creative appreciation a big part of it?

What have you successfully done to motivate referrals?

I would love to interview you if you have a great referral success story. Send your idea to me at [email protected]