Excerpt from "The Complete Idiot's Guide to Cold Calling" by Keith Rosen. Reprinted with permission by Alpha Books, a member of Penguin Group (USA) Inc. 2004.

What exactly classifies as a referral? If we were to create some parameters that define what a referral is, this is what it would look like.

Synonymous with "recommendation" and "testimonial," a referral is a potential prospect that is directed or given to you by someone you know or someone you don't know who feels that you are the best source for help or information regarding a specific, subject, product, or service.

What makes a referral so incredibly attractive and desirable is that it is, for the most part, a warm lead. That is, when you approach a referral, there is less of a need to convince or sell them. A certain degree of interest, credibility, and comfort has already been established. Chances are, there's already a need present. All you have to do then, is turn that need into a want or a desire for your product using the questions in your needs analysis.

Typically, your clients are going to be the top source for referral business simply because they are the ones who actually utilize your product, making them the most effective testimonial you can find to endorse your product.

The following dialogue illustrates how you can establish a referral agreement with your clients. This way, you will be able to identify the clients who are willing to become a referral source for you and the most appropriate time to ask them for referrals. This is a great example of how to set up your strategy to increase the amount of referral business you currently generate.

You: "Mrs. Client, may I take a moment to share with you how I build my business?"

Client: "Sure."

You: "Well, what I enjoy most about what I do and where my time is best served is working with my clients. I want to spend as much time as possible serving my clients and exceeding your expectations. In order for me to spend more time with my clients and less time marketing or prospecting for new business I really need the help of my satisfied clients.

Please understand, I'm certainly not asking for any referrals from you now. Personally, I feel that would be incredibly presumptuous to ask you to introduce me to other potential clients before you even have a chance to truly utilize and benefit from my services. After all, we just started working together!

However, in a couple of months or even weeks, when you are clearly realizing the benefits of my services and have gotten even more value than you expected, would you be comfortable sharing the results you have experienced with others and introduce me to those people who might also benefit from my services?"

Client: "Sure, I don't see why not.

You: "That sounds great. Thanks in advance for this consideration. Just so I know what it will take to make you a raving fan, what can I do to make you comfortable enough to actually want to refer business to me?"

The most effective way to earn referrals is to over- deliver on the value your clients expect so that you actually exceed their expectations. Once you confirm this to be true, it now becomes a great time to ask for testimonials or a reference from a happy client.

If you find that you are having difficulty asking for referrals, then question how strong your belief is in your product, your commitment to serving your clients, and the value proposition you can deliver.

Setting up a referral agreement with your clients will remove any reluctance and make you feel much more comfortable when asking them for referrals. Since they now know this is something you will be asking of them, it's okay to ask.