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For example, in our business we describe why we setup a referral program and how it works, including the incentive for the referrer and referral.
Once people start circulating the bulletin, it's possible to see how many times it's been forwarded by looking at the referrer.
Third, you need a way to track the referral, so you can capture the referrer and referral information and handle the follow-up for each.
The last step is to follow up and thank the referrer, contact the referral, then deliver the incentive to each when the referral becomes a paying client.