This is a guest post written by Amanda DiSilvestro of Resource Nation.

Remember when you were a kid and you played the game telephone—you’d think of a sentence, whisper it into the next kid’s ear who would then whisper it to the next all the way around a circle until the last person blurts out what they hear. The best part about this game is how funny it was when the last person says something entirely different than was intended by that first little kid who started the phrase. Believe it or not, this same concept translates into the business world through referrals.

One of the best ways to generate referrals for your business is through word of mouth. In an ideal situation, everyone will hear the right information about your business and everyone will make it to your website.  There are lots of ways to make your word-of-mouth efforts more appealing, targeted, and clear. Consider some of the ways below to make sure that your company’s message gets all the way around the circle correctly.

5 Tips for Generating Referrals for Your Business

1.    Offer a gift to those who refer your business

You want to give people an incentive to refer your business because it will not only give them some motivation to, but it will also show your appreciation. In the end, a new customer will be much more valuable than any coupons or free gifts you offer.

After all, getting a new customer can often grow into many customers if they take too take the initiative and continue to refer your company to their family, friends, and social networks they belong to. This tactic is great because it will work with family, friends, existing customers or clients, and even employees. After all, who doesn’t love free stuff?

2.    Build relationships with other businesses

Chances are your business works with others within the industry. People within your industry obviously work with your target audience, so their referrals might very well be a great way to get a lot of customers and clients quickly.

If the company you work with has a good reputation and is trusted amongst their own clients, a referral from them could be extremely powerful. The best way to make this happen is to create a partnership by offering to refer their company as well.

3.    Make sure you are easy to find, simple to contact, and approachable

This is probably the most obvious form of generating referrals, yet many companies struggle with it. Make sure that each time a customer or client leaves your office, you hand them a business card with a telephone number and an email address. Should they need to contact you, they’ll know how.

Make it easy for someone to refer you. If they have to jump through hoops to find your contact information, they'll probably forget about the referral.

4.    Pull together testimonials

While first-hand referrals are the best way to get new clients, testimonials are also great. If you can ask customers or clients about their experiences with your company, you can get signed authorization that will allow you to use that testimonial in your advertising. The easiest way to gather testimonials is to ask a client or customer how their experience was just before they leave. If they had a good experience, many people will be more than happy to let you know. Through testimonials, some of your best customers will be able to get their opinions out there even if they don’t have any friends or family members who need your services.

5.    Don't be afraid to ask

If your company simply cannot afford to offer an incentive or change up your advertising to include testimonials, asking for referrals from customers is completely appropriate. Many small business owners and startup companies may worry that this is rude or out of the ordinary, but asking for a referral is a very common occurrence.

If you’re friendly and appreciative, there is no reason that anyone would be upset with you asking for their help.

One of the biggest things to remember is that you shouldn’t be trying to convince people your company will do the job. Instead, focus your resources on making sure your company is worth all of these referrals. If you have a solid, quality business, there is no reason the referrals won’t start piling up. While generating more referrals is important, you must start with the product or service you are hoping will be referred. If your business plan is wishy-washy from the start, there is no way the kid at the end of the circle is going to listen to what you have to say.

Amanda DiSilvestro is a writer on topics ranging from social media to payroll services. She writes for an online resource that gives advice on topics including small business payroll services to small businesses and entrepreneurs at Resource Nation.