Back to the on-screen lesson ·
Ask for a referral after a result the customer has seen and valued, briefly and easy to decline; count the referral rate and what a referred customer costs against other channels.
Paper packet. Every task here also exists on screen, where it is checked automatically; answers written on paper are not assessed by Nydus. When you are back at a device, enter your answers there.
You will choose the moment of value to ask for a referral, ask in a way that makes declining easy, compute the referral rate, and compare what a referred customer costs with a paid channel.
You can measure whether customers come back. Customers who come back, and those who were simply delighted once, can also send others, and a referred customer is often the cheapest new customer a small business ever gets.
| Term | What it means |
|---|---|
| Referral | An existing customer recommending the business to someone they know. |
| Moment of value | When the customer has seen the result they wanted. |
| Thank-you | What the business gives for a referral, if anything. |
| Referral rate | Customers who sent someone over customers asked, times a hundred. |
| Referred customer | A new customer who came because someone vouched. |
| Condition | A benefit that depends on referring, which turns a favor into a deal. |
A referral is a customer lending their own reputation to the business: telling a friend 'use these people'. Nobody does that for a promise, only for a result they have seen. So the timing is not a matter of style.
For Bright Home Cleaning's move-out clients, the moment of value is not the day of the clean. It is a week later, when the inspection has passed and the deposit has come back. That is when the client is relieved and grateful, and when a question lands naturally: 'I'm so glad it went well. If a friend is moving out, would you mention us? No worries if not.'
Three things make that request work. It follows the result. It is brief. And it makes declining easy, so that the customer who would rather not can say so without awkwardness. Asking before the work, asking after a complaint, or tying a discount to a referral all turn a favor into a transaction, and customers feel it.
Another way: table
Moments of value in the five businesses.
| Business | The moment to ask |
|---|---|
| Bright Home Cleaning | Deposit back after the inspection |
| Northside Repairs | The repaired bike ridden around the lot |
| Neighborhood Kitchen | A lunch the office rated highly |
| Maya's Ceramics | A busy month without a chipped cup |
| Monica's Market Stall | A regular's fourth weekly bag |
Another way: steps
Referrals are not free, but they are usually cheap. If Bright Home Cleaning gives a 15-dollar voucher for each new client referred, a referred client costs 15 dollars. The newspaper advert that cost 480 dollars and brought 6 new clients cost 80 dollars a client. Measured the same way as the channels in unit 3, referrals often win by a wide margin, and the referred client arrives already trusting the business, which shows up later in retention.
Count the referral rate too: of the customers asked, how many sent someone? It tells the owner whether results are good enough to vouch for. A falling referral rate is often the earliest sign that something in the service has slipped. If a thank-you is given, keep it modest and the same for everyone, and say what it is openly. The Federal Trade Commission's Endorsement Guides require that any reward for a recommendation or review be disclosed, and some fields, such as real estate settlement services and health care paid for by government programs, restrict referral payments by law.
Find the moment of value. For each service, name the point at which the customer sees the result: the deposit back, the bike running, the lunch rated highly, the cups surviving a busy month.
Check the customer is happy. A rating, a thank-you, a word at the counter. If something went wrong, put it right and do not ask.
Ask briefly, with a way out. One sentence: who might benefit, and 'no worries if not'.
Thank them either way. The answer is theirs to give.
Record each referral. Who asked, who referred, who came, and any thank-you given.
Count. The referral rate, and the cost of a referred customer next to each paid channel.
Check the request. Before using a referral line, read it as the customer would. Does it come after a result they valued? Could they say no without feeling awkward? Is any thank-you disclosed and the same for everyone? If the answer to any of these is no, rewrite it.
Waiting for the moment of value is needed because the customer is lending their own reputation. They can only vouch for what they have seen, and a request before that asks them to vouch for a promise.
Making declining easy is allowed, and wise, because a referral given under pressure is a weak one. The friend can tell, and the customer who felt pushed is less likely to come back.
Counting referred customers like any other channel is allowed because a referral is a channel: it brings new customers at a cost. Comparing that cost with an advert's, in dollars a customer, is the same division as in the acquisition cost lesson.
Not asking after a failure is needed because the request would tell the customer the business cares more about its next sale than about putting this one right.
A customer who is willing to refer still has to remember the business and know how to pass it on. Make that easy. A short card with the name, what the business does and how to book, handed over at the moment of value, is easier to pass on than a memory. An email signature line, 'if a friend is moving out, here's our booking link', does the same job online.
Give the referred customer a reason to mention who sent them, such as the same small welcome the referrer received, so the business can record the referral and thank the right person. And tell the referrer when their friend has booked: people like to know their recommendation was taken, and it is the natural moment to thank them.
A drop in referrals is a signal worth reading. If the referral rate among customers asked falls from 35 to 15 percent over two quarters, something has changed in the result customers are seeing: slower service, a new staff member who has not learned the standard, a price that no longer feels fair. Look at the retention figures and the latest complaints together.
The fix is never a bigger thank-you. A larger voucher may buy a few more names, but it cannot make a weaker result worth vouching for. Restore the result first, and the referrals follow.
Referrals do not only come from customers. The property managers who hand out Bright Home Cleaning's card, the shop-fitter who recommends Maya's cups, the vet who mentions the groomer: each is referring, and each should be treated with the same care. They vouch for the business to their own clients, so they need to see results worth vouching for, and they need to hear when a referral went well.
A short note to a partner after a referred job, 'your tenant at Elm Street passed the inspection on Friday', does more to keep the referrals coming than any fee. It shows the partner that their name was safe with the business, which is the only reason they will lend it again.
Record partner referrals separately from customer referrals, so each can be counted and compared with the paid channels. A partner who sends ten good clients a year is one of the most valuable relationships a small business has, and it is worth a visit or a call each season to keep it.
An online review is a kind of referral: a customer vouching for the business to people they will never meet. The same rules apply. Ask after the moment of value, briefly, and make it easy to say no. Ask every happy customer the same way, rather than choosing only those sure to give five stars, and never offer anything in exchange for a positive review.
The Federal Trade Commission's rule on fake reviews, adopted in 2024, bans buying reviews, writing fake ones, and suppressing negative ones. A small business that asks honestly, at the right moment, needs none of those tricks: its reviews describe the results customers actually saw.
Reply to reviews, good and bad, briefly and in the same spirit as the listening lesson: say back what the customer said and what the business will do. Future customers read the replies as closely as the reviews, and a calm, specific answer to a complaint often reassures them more than a page of praise.
A pet-sitting business in Boise spent its first year on paid listings that cost about 60 dollars for each new client. Its owner noticed that the best clients, the ones who booked every vacation, had nearly all come from friends. So she built the habit into her service.
At the end of each booking she sends a short report with photos of the pets. When a client replies with thanks, which most do, she answers with one line: 'So glad Biscuit was happy. If a friend ever needs a sitter, I'd be glad to help; no pressure at all.' She attaches a card the client can forward, and she gives both the referrer and the new client 10 dollars off their next booking, stated plainly on the card.
In the next year, 40 new clients came by referral at a cost of 20 dollars each, both credits counted, against 60 for a listing client. The referred clients also rebooked more often. She cut her paid listings by half and spent the time on the reports instead, which kept the referrals coming.
The FTC's Endorsement Guides say that when a business gives someone something of value for a recommendation or review, the connection must be clear to the people who see it. A referral card that states the thank-you openly meets that standard, and a hidden reward does not.
Ask every stranger for referrals first. A referral comes from someone who has seen the result.
Ask as soon as they book. There is nothing to vouch for yet.
Ask after fixing a complaint to turn it around. It reads as the business caring about itself.
Make the discount depend on referrals. That turns a favor into a condition, and customers resent it.
A bigger reward fixes falling referrals. Only a better result does.
Deliver the result.
$\text{the bike ridden around the lot}$
The owner sees it work.
Check the owner is happy.
$\text{shifts cleanly now? yes}$
The moment of value.
Ask briefly, with a way out.
$\text{mention us to a friend? no worries if not}$
One sentence.
Hand over a card.
$\text{name, service, how to book}$
Easy to pass on.
Thank them either way.
$\text{thanks, ride safe}$
A favor, not a deal.
Ask each office for a rating.
$\text{out of five, after each order}$
A record of the moment of value.
Ask only the fives.
$\text{a line in the thank-you email}$
After a valued result.
Make it easy to decline.
$\text{no obligation}$
Easy to ignore.
Count those asked and those who referred.
$20 \text{ asked; } 7 \text{ referred}$
From the order records.
Work out the referral rate.
$7 \div 20 \times 100 = 35$
Referred over asked.
Note the cost.
$\text{one email each}$
Cheaper than any paid channel.
Note the voucher.
$15 \text{ dollars a referred client}$
The same for everyone, disclosed.
Count the referred clients.
$12 \text{ this season}$
From the booking records.
Find what the vouchers cost.
$15 \times 12 = 180$
One thank-you each.
Find what an advert client cost.
$480 \div 6 = 80$
Spend over clients.
Compare the two routes.
$15 \text{ against } 80$
Referrals are far cheaper.
Compare their retention.
$9 \text{ of } 12 \text{ against } 2 \text{ of } 6 \text{ rebooked}$
Referred clients arrive trusting.
Decide where effort goes.
$\text{results worth vouching for}$
That is what keeps referrals coming.
Find the moment of value for a weekly-bag customer.
$\text{after a few weeks of bags that saved time}$
The result they wanted.
Write the ask.
$\text{if a neighbor would like one, point them my way}$
Brief.
Add the way out.
When should Bright Home Cleaning ask a move-out client for a referral?
Complete the worked solution: last season Bright Home Cleaning gave a $10$-dollar voucher for each new client referred, and $5$ clients came by referral. A newspaper advert cost $336$ dollars and brought $4$ new clients. Find what the vouchers cost in all, what an advert client cost, and how much more an advert client cost than a referred one.
Find what the vouchers cost in all.
$(\text{voucher}) \times (\text{referred clients}) =$ t
One thank-you for each referral.
Find what an advert client cost.
$(\text{advert spend}) \div (\text{advert clients}) =$ a
Spend over the clients it brought.
Find how much more an advert client cost.
$(\text{advert client}) - (\text{voucher}) =$ d
A referred client costs one voucher.
Say what keeps referrals coming.
$\text{results worth vouching for}$
No voucher can replace them.
Dev hands a repaired bike back to its owner at Northside Repairs. Put his referral request in order.
Number the steps in order (write the number in the box):
Four referral requests Maya has used or considered. Mark every one that follows a delivered result and makes declining easy.
This task has no paper form; do it on a device.
Neighborhood Kitchen asked $20$ offices for a referral after lunches they had rated highly. $15$ of them passed the kitchen's name to another office that went on to order. What percentage of those asked produced a referral?
Of the offices asked, v percent produced a referral.
A dental practice in Charlotte asks patients for a referral after a check-up they rate highly, and thanks each patient whose referral books with a $20$-dollar gift card. A new patient's first visit contributes $90$ dollars. This quarter, $3$ referred patients booked a first visit. How many dollars did the referrals contribute, after the gift cards?
Answer:
A math tutor's student has just passed an exam they were worried about, and the parent is delighted. What is the best way for the tutor to ask for a referral?
Lesson test: one question per skill, one attempt each, no hints. Your answers are checked when you submit.
Bright Home Cleaning thanks a client who refers a new client with a $14$-dollar voucher. An advert in the local paper cost $516$ dollars and brought $6$ new clients. Fill in what one new client cost through each route, in dollars.
| Cost of a new client, dollars | |
|---|---|
| Referral | |
| Newspaper advert |
You can ask for referrals at the right moment and show what they cost next to an advert. Tell someone why asking before the work spoils the request. Next: what a customer is worth over time.
18. Your turn: Monica's weekly bag, step 3
$\text{no pressure}$
Easy to decline.