Referrals cost you nothing to acquire, they let you start at a higher point of trust, they make price less of an issue, your sales process moves faster, your closing ratio is higher, your sales are often larger, and your new prospects and clients are more likely to follow your suggestions, according to Bill Cates in his book Beyond Referrals: How to Use the Perpetual Revenue System to Convert Referrals into High-Value Clients.
How do you go about getting more referrals and maximising the advantage to your business from those referrals? It starts by leveraging existing relationships and creating a process to generate referrals. Once a client indicates a willingness to give you a referral, you do your best to covert that into an introduction. You then convert the introduction into an appointment, and hopefully your appointment results in a new client, whom you can ask to provide new referrals.
I certainly agree that the easiest and most productive source of new work, after new work from existing clients, is work from new clients referred by existing clients; however, the willingness of existing clients to give referrals is proportional to their level of satisfaction with the services you provide, so the referral process really starts with providing exceptional service. If your service is only mediocre, you cannot expect to benefit from referrals, no matter how hard you seek them.
Subject to that disclaimer, I found the book quite helpful and interesting. Like other aspects of sales, referrals work best if you use them naturally and with integrity, but they work much better for you if you recognise their importance and plan for them.