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What's necessary to have a successful business? Whether you're providing health-care, legal, or automotive services, or selling flowers, cards, and gifts, good customer service is the key to retaining clients. Clients who have appreciated your services will recommend you to friends and family. This word-of-mouth advertising is especially valuable because it is so much more powerful than paid advertising. It is also completely free.

One step beyond word-of-mouth advertising based solely on the good customer service you provide is a referral program. When you develop a referral program, you put in place a system in which you will ask for and reward referrals that you receive from your present clients. Beginning this program can be as simple as writing a letter to your present clients letting them know that you welcome and appreciate referrals. Your newsletter is a perfect place to print this letter because it will reach all your present clients with the word that you are looking for them to refer new clients to you.

Some businesses offer rewards as part of their referral program. It could be a dinner for two, a discount on one of your services, or a flower arrangement. Whatever you offer, you'll need to have a way of tracking the referral so you can deliver the reward. Be sure to ask new clients how they found out about your services. If they were referred, find out who referred them and be sure you reward that person right away.