Welcome to the latest edition of my new weekly blog series, “Free Marketing Ideas”. Each week I will identify and explain a simple marketing idea that you can employ at low or no cost. Last week’s topic was Start Producing Videos.

This Week’s Topic = Develop a Referral Program

The best form of free marketing is when your customers voluntarily tell other people how incredible your company is. It’s this word of mouth marketing that every company seeks. It’s efficient and effective, and for the very best companies, it happens organically.

But there are things you can do to encourage this type of chatter. And one way you can incentivize people to tell their friends and family about you is to develop an easy to use referral program.

The best referral program I’ve ever seen in terms of ease and effectiveness was ING Direct. They aggressively marketed a referral program to existing customers, promising $25 for every person you referred who signed up for a savings account. In addition, the person who you referred would get $50. That money was deposited directly into your account. And that was that.

A good referral program does two things. First, it makes an offer. Both the referrer and the referred get something for participating. Two, it makes referrals easy. The act of referring and the action that the referred need to take are simple and intuitive.

There are companies that offer out of the box referral program solutions for a fee, but you can have someone with basic programming knowledge set one up for you at a minimal cost. You probably already have someone on staff that can do the work.

And once the program is set up, it should run itself. You can market it to current and former customers. And you can direct people to it from (even integrate it with) your social communities. So it all comes together!

Share your thoughts on this idea, and other free marketing ideas in the comments section below and keep the conversation going!