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Unlocking the Power of Referrals: Strategic Steps for Business Growth

July 14, 2023

In the vast landscape of business growth strategies, one timeless approach continues to stand out—referrals.

Which got me thinking, how often do you refer people?

Truthfully, I've spent the last 20-odd minutes thinking about the places I refer people to the most; while there aren't many, a restaurant and a used bookstore are at the top of my list. While I'd love to talk about the sweet older man who manages the bookstore, the handmade bookmarks he makes, and his wild ability to recall almost every author and book that exists in the store, we'll talk about the restaurant (which is equally as charming.)

Upon further investigation, I don't just refer people to the restaurant because their food is good; I do it for many different reasons, most of which have everything to do with what motivates me personally. The same is true of your future clients or community members. While your service or product is important, what attracts clients to referring you or joining your community is often motivated by their identity, and how they want to be perceived.

The Social Identity Cycle

The Social Identity Cycle is a journey for people to understand who they are and how they fit into different groups, and it happens in three phases.


Identification is essentially the discovery phase. It's when people decide that some aspect of their personal identity aligns with that of the community identity.

In the case of this restaurant, it popped up in the stories of someone who owned a restaurant in my neighborhood already. I liked their taste in interiors, food, service, and values. After doing some light internet stalking, I could see this new spot hit just about everything I wanted in a restaurant.


Participation can mean a lot of different things depending on the community. It can be commenting, buying, attending an event, etc.

In my case, it meant going to the restaurant. The food was good, but the service put it over the top for me. They hit the sweet spot of being knowledgeable without being pretentious. The vibes were on point. So I shared the experience with a friend.


This is arguably one of the most essential phases because rewards release dopamine, telling us, "That was good! We should do it again!" There are two kinds of rewards, intrinsic (something internally gratifying), like respect, a sense of belonging, and extrinsic (something externally gratifying), like rewards or money.

Let me tell you, the high I get from sending people there who end up loving it is unmatched. Not to call me out, but it's an intrinsic reward because I love being seen as helpful and having great recommendations. Externally they've rewarded me with free desserts and wine after I tell them how many people I send their way. Although I don't send people their way for free things, it's a nice little perk.

The Same Rules Apply

Regardless of whether or not you're building a true community or simply looking to serve your clients, the same rules apply. For you to build a collective of people who are happy to sing from the rooftops and send people your way, you must first get clear on:

  • Who you are (what the business is)
  • What you believe (aka your values)
  • What you do (everything you offer)

Side Note: I'm sure you already know this, but you have to be as specific as possible when answering those questions.

Increase Your Chance Of Referrals At Each Stage

Now that you understand the theory behind how people identify you, participate in what you're offering, and how you might validate that, it's time to look for small shifts you could make to your business at each stage. Because how helpful would I be if I didn't give you concrete examples?!

Easy Identification


How easily can people identify your community or business through its visuals? What story are your visuals telling? Think about your website, social media, blogs, etc.


Who is associated with your business or your community that you could tap for a testimonial or shout-out? This is why I'm such a fan of testimonials and even case studies. They are a natural way for people to see themselves in your community or using your services. If you want to learn more about feedback, check out a podcast episode here, where I detail the questions I ask.


Repeat the things that matter the most on your website, your social media content, blogs, and anywhere else people find you. These are things like your values, your approach, the change you want to see, etc.

Easy Participation

Clear offers

People like ease. It has to be clear how people can participate in your business or community. What are you offering to them? How can they get involved?

Clear understanding of what the process looks like

People generally like to know what to expect, especially if they're doing something new. The best way to ease their fear is to show or tell them what it looks like to work with you. What is the process of joining or paying for services?

Customer experience

If you focus on anything from this section, let it be this! From the moment someone says yes, how can you reassure them that they've made the right decision? How you onboard clients or community members impacts their perception of everything moving forward.

Make it easy to refer

You need to consider two elements to make it easy for someone to refer you.

  • Ask at the right time. When are they most excited? This could be after they've purchased or after you've sent over the final deliverables. I do this after I get great feedback from clients.
  • Remind them how you help people. When I ask for a referral, I often say, "If you know anyone who could use "XYZ" support, and if so, I'd love to connect with them."

Increase Validation

Meet their needs

On the surface, you might think this means delivering what you told them you would provide, and while that's true, plenty is going on beneath the surface. That's why understanding your clients or ideal community members pays well. Think about what else clients might want that they don't articulate.

Reward them

Anytime a client refers someone to me, I will always follow up with an email expressing gratitude because it's a big deal for someone to send people your way! You don't have to, but I often send a small gift and written note because that's how I roll.

What next

Referrals have the potential to be a game changer for your business, I myself made an extra $46,000 when I focused on referrals in my business. If you want to learn more about how, feel free to listen to the episode I did on it, here.

Zero in on each phase of the Social Identity Cycle to improve your chances of securing really solid referrals in your business. And remember, if you have a great restaurant, bookstore, or any other amazing service, don't keep it in your back pocket; share it with those around you.

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