Not surprisingly the perfect motivation for referral is not money or direct compensation in any form. In his book, The Referral Engine, John Jantsch talks about how the perfect referral motivation lies in our deep seated human need for community. People get pleasure from offering help and knowing they can be called upon as a source of reliable information.

When referral sources are motivated, intentionally or unintentionally, out of a desire to help, they will often go to great lengths to do so. On the other hand, when the motivation is monetary, they will view it as a market transaction, and the motivation is significantly lower - ranging from indifference to distaste - depending on the industry. That's not to say that you can't reward a referral but the motivation to refer should never be solely based on self-interest or a financial reward. The reward should rather be seen as a way of getting a potential referrer over a tipping point and helping them remember to refer you when the opportunity arises. All messaging should be around the greater motivation of helping a potential referrer help their friends by sharing your product or service with them.

The key challenge is then to see if you can design a referral program that taps into people's desire to help? Can you enable them to use their influence to add value to their relationships. If you can get this right, you've found the perfect referral motivation which is the holy grail of referral.

References

1. The Referral Engine by John Jantsch