Referrals are the one lead generation technique where smaller firms have the advantage over larger one. But first, let's start with some background. 

A referral is a sales lead that comes from a customer.  Of all lead generation methods, referrals are the most likely to result in a sale.  The reason is simple. The greatest hurdle that every sales pro faces is TRUST.  Rightly or wrongly, most people are pre-disposed to mistrust sales pros and see them as time-wasters.  When you enter a sales situation with a referral, your current customer is saying to his or her colleagues that YOU can be trusted and won’t waste their time.

A referral also creates "social pressure" to buy.  Because your customer bought from you, the prospect naturally wants to follow suit.  (I wrote about this phenomenon in an earlier column: "Know When a Customer Will Say: Yes!")

Tactic #1: Ask After Delivery, Not After Closing.

Many sales pros make the huge mistake of asking for a referral right after they've closed the deal.  That's dumb, because you’ve just asked the customer to take a risk by buying from you.  Why would the customer want to take another risk and refer a colleague to you?  Therefore, rather than asking for the referral outright, ask for the "right to ask." Here’s how.

When the customer says "yes", say something like:

Wonderful! Thanks for agreeing to become our customer. I have one request. I want you to think of some friends and colleagues who you think should be doing business with us – providing we are as incredible as I’ve been claiming we are. Once I proven to you, beyond all doubt, that we can deliver and delight you, I’m going ask you to contact those people to suggest they meet with me. Does that sound fair?

Then follow up... after you're certain that you've wowed the customer.  Note: this tactic comes from a conversation with uber-guru Jeffrey Gitomer, author of classic book: The Sales Bible.

Tactic #2: Give Your Customer a Referral First.

This one is so simple that it’s crazy that more sales pros don't use it.  Because you're in sales, you know lots of people, right? If you use those connections to bring in some extra business for a prospect, you've earned the right – tit for tat – to ask for a referral. 

The great thing about this idea is that it really does put you into the proverbial "win-win" scenario.  More money coming into your customer, means that they'll have more money to spend, capeesh? Note: I originally heard this tactic from Sam Reese, CEO of the huge sales training firm Miller Heiman.

Tactic #3: Have Your Customer Contact the Prospect.

Once you get an agreement for your customer to give you a referral, don't settle for contact information. While you can always say something like "Joe told me to contact you," such phrases are used so frequently that they're meaningless. For all the contact knows, Joe might have given you his name simply to get rid of you! (Don't laugh; happens all the time.)

Instead, get your colleague to take a specific action that brings you together with the prospect.  Rather than asking for a name and number, ask the referrer to call and explain who you are and why you are worth having a conversation with. Ask the referrer to get back to you to confirm that the call has been made or send an email (and copy you on the email).

Then follow up, ‘natch.

Note: This tactic comes from a conversation with one of my favorite people: Joanne Black, author of the extremely useful book No More Cold Calling.

READERS: Any other suggestions come to mind?  Love to hear your own experiences!