Compared to the usually high cost of acquiring a new customer, there's a much lower cost of acquisition with a referral, because they find you; you don't have to go prospecting for them. This is a huge marketing advantage. Word-of-mouth advertising and referrals occur because of over-the-top, out-of-the-ballpark, put-gigantic-smiles-on-their-faces kind of customer service. There's no doubt in my mind about that. I've seen it time and time again, and it's added to my bank account time and time again. While incredible customer service goes a long way in generating referrals, you don't have to leave them to chance. A formal customer referral program can really be one of your greatest marketing tools.