Referral programs have many different potential advantages and disadvantages for businesses. One potential benefit would be the cost of having a referral program. Word of mouth advertising costs the company practically nothing (Small Business). Referral programs can also provide additional sales even if the company does little or no advertising (Small Business). However, for employee and customer referral programs, people are rewarded for successfully referring people to a company. Another benefit is trust. People tend to trust their family members and relatives more than they might trust businesses (Forbes). A single satisfied customer might only tell a couple of people, but a strong recommendation from a friend will have more influence than an advertisement (Forbes). However, there are also disadvantages to referral programs. A company cannot control how or when referrals will occur. This can be a big problem because a company has no way to increase their referral program and when people talk to each other it's not always positive (Forbes). Customers who have had negative experiences can discourage future potential customers from trying goods and services (Small Business). Another problem is expectations, reports set high expectations for customers that the company cannot meet (Small Business). It has been proven that people who don't know much about a company tend to be more satisfied than people who come in with high expectations (Forbes). Customer referral programs take time and money to develop, and it's all to the benefit of the customers because the company hopes to gain an advantage in the future as well. The company must take into account the budget for implementing a referral program. It wouldn't make sense... middle of the paper... t referral and what rewards they get for a referral. If a company informs its referral sources, it has a better chance of getting more customers. Step 5: A company needs to outline its bid reference system. This is where the company presents a creative offering that entices people to recommend the company to people they know. Don't use money as an approach as it rarely works. Step 6: A business needs to create a referral transformation strategy. A business needs to ensure that its referral leads turn into referral customers. A business needs to create steps in which to convert their referral leads. Don't overly raise the expectations of future customers. Step 7: A business should create a referral follow-up strategy. Create different ways to reward referrals. A company should always communicate with its customers and referrals about what the company is doing