As a small-business owner, you probably know the value of referred customers -- ones to whom friends have recommended your site. They come to you with a positive mind-set, ready to do business with you.

But do you have an automated referral system in place? One that generates a constant flow of new customers every month?

You can get one by setting up a customer-referral affiliate program.

Most affiliate programs are created with the expectation of having other Web sites resell products and services for a commission. But you can use an affiliate program to get your existing customers to recommend your business to their circle of contacts.

Businesses that don't communicate with their existing customer base not only neglect a rich source of new customers, referrals, they risk losing those customers to businesses that make an effort to stay in touch and show they care.

Know Your Customers

Do you have a customer database? For your sake, I hope you do. But what if you don't? Start collecting customers' contact information today. How? Give them an incentive.

I recently gave United Airlines my e-mail address. In return, it added 2,000 miles to my air miles account. That's a smart way of building a customer database.

What I'm about to tell you is nothing new. It is not revolutionary. It has been done for centuries. That's why it works.

Show your current customers you care. Communicate with them. Look at each and every one as a potential friend. A good exercise when writing e-mail messages to your customers is to write a message to your best friend first. In that e-mail, you'll naturally use many key elements for successful communication with customers.

Clue Customers In

Give your customers compelling, easy instructions on how to start referring people to your business.

Every time you deal with customers on a one-to-one basis, either through e-mail, over the telephone or in person, ask for referrals. Tell them you enjoy doing business with them, and remind them that they probably know other people who have the same values. Help them see a clear picture of who in their inner circle could benefit from your product or service.

Come up with a referral incentive that is easy to pass on, such as a discount, a gift certificate, or a free item of some kind.

Offer this incentive to customers for referring a friend. Or you could have them pass it on to contacts they refer; many people don't like to make money off close friends. Relaying an offer through your existing customers makes them look and feel good among their circle of contacts.

You can also use finder's fees or commissions, but these are more successful in a business environment, where people are more comfortable making a commission on transactions.

Or you can surprise your customer affiliates with a bonus of some sort a week after they make a referral or purchase.

Track the Wild Lead

Take advantage of technology. Set up an affiliate program to track which customers referred which new leads so you can reward them -- or the new potential customer -- promptly and accurately. The tracking system uses hyperlinks with individual affiliate ID codes to identify participants.

Companies offering affiliate programs are listed on the Web. Whenever someone buys something from your Web site, that customer should receive a thank-you message. This is common sense. Acknowledgment makes people feel appreciated.

You can automate this process by setting up an e-mail autoresponder. Any number of autoresponder suppliers can be found via a Web search. Sites include 2-Tier Affiliate Program Directory and Dave Central Software Archive.

Be Sure to Ask

Keep in touch with your customers. Tell them you want their feedback. Interact with them. Get customer testimonials you can use in the sales copy on your site or when you communicate with other customers. Testimonials are easy to get if you ask for them, and they're an extremely powerful tool for attracting new customers.

Ask your customers: Why did you buy from me?

Simply put: Let your own customers be your strongest sales force. It can work if you stay in touch with them.

Now, before I sign off: Where do I go to tell my contacts about your business? And what will I get for doing that? Or, more important, what will they get?

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