Word of mouth referrals are manna from heaven. They are free and those who come to you via a word-of-mouth referral are much more likely to buy from you.
If your business is good at what it does you might pick up a few of these but why leave it to chance? Beware the business that says it gets all of its work from referalls. This is often a rationalisation for, 'I'm no good at marketing but I'm lucky enough to scrape a few referrals'. Here's how to do it properly.
First of all have a look at how you do what you do. You want to get it in to every part of your material - from your brochures to your sales presentations - that you get, and would like to get, referrals from your customers. This gets it deep in to your customers' thought trains that a, You are good at what you do, and b, when you ask for a referral from them it won't be a surprise.
Importantly you need to ensure that your customers are 'absolute raving fans' of yours. Not just pleased, but truly, truly delighted. Once this is the case, asking for a referral becomes easier because people will far more naturally want to tell others about you.
Then you can ask for referral in many different ways. On the bottom of your continued correspondence with them; by sending them a referral slip by post or email; by offering incentives for them to introduce friends, colleagues or associates; or if it's appropriate, by offering commission.
Of course if it is appropriate, do pay a commission but don't underestimate how easy it is to actually generate free referrals. Tip: the free ones are usually better quality too!
If you know that somebody is out there singing your praises, do something to surprise them. Send some flowers, a ticket for a night out somewhere, a case of wine, whatever you feel to be right. Above all though, ensure that they stay in love with your business.