I have studied the idea of referral marketing for years and, when designing a referral marketing system, it almost always comes down to answering this simple question.

What would motivate someone to refer you?

The good news is – the answer is always the same. The bad news – designing a system that gets at this answer can be tricky.

So, the answer. People refer businesses, services, products, people, movies, barbers – you name it – if it makes them look and feel good.

That’s the answer 90% of the time. (Some do it to be nice, but you can’t really build a business counting on that)

People want to pass on a smart buy, a new find, a great experience – in part because it makes them look and feel smart, loyal, counted on, savvy, cutting edge, crafty – whatever the thing they need to look good. I’m not pointing this out as some cynical conclusion about the world – I’m pointing this out to say that any successful referral marketing effort you engage in better give your referral source this motivation.

I guess another way of saying it is that no one wants to refer something or someone that makes them look bad.

Keys to looking good.

There are many, many variables in figuring out what people will perceive makes them look good, but you can bet your business needs some amount of:

• Buzz – People want refer things that are new enough to be a bit of a find but solid enough that thought leaders are in the know
• Met Expectation – People want to be sure that you will meet their expectation – they want the same experience over and over again
• Value – People want to be able to say, “here’s what is so great” in very simple terms

Build your referral systems in ways that let people feel good about referring you and you will tap into the master human motivation.