Referrals are a lot easier way to get to new prospects than cold calling. The professional salesperson will have a system for asking for and getting referrals on a steady basis. Refer to chapter 7 pages 218-222 on the Referral Cycle. Most buyers say they are willing to give a referral if asked. Most salespeople have head trash about asking, or only feel they “deserve” to ask after six months or more of successful service to the client.
Even the word “referral” has some negative baggage by the way it has been abused by salespeople. What if there was a way to get referrals without even using the word “referral?” Another issue is when you ask for referrals, a Ferris wheel sized Rolodex (contact list) goes off in the prospect’s mind and she responds, “Well sure, I’m sure I could think of some. Let me think about it and I’ll get back to you” but they never do. The best approach is avoid the word “referral” and get them to think about one but not more than two people at a time. It might sound like this:
“Well John, I really appreciate your business. I’ll do my best to assure you get the level of service you expect. I recall you said you were in the local Rotary club. Do you meet up every week or so? (yes) Thinking back to your last meeting, who were you sitting next to that you talked about business? (Joe Smith and Don Jones) If you don’t mind me asking, would either (Joe) or (Don) be open to having a conversation like we just had, that might have similar challenges in their business? (Not sure, maybe) Really? Which one? (Joe) Why’s that? (He said he was having a similar challenge) How would you suggest I reach out to (Joe)? Would it make sense for me to be your guest at the next Rotary, where you could introduce us? (Sure, I’ll let him know I have someone he could meet).”
There is a difference in the quality of referrals — in terms of how they are made. If someone gives you a name and number, that is really just another lead — not a referral, just another cold call to make. If they warm it by leaving a voice message “Be expecting a call from Joe, I just met with him and I think it makes sense for you to meet him,” that’s warmer and may help. The close ratio for these are around 3-5%.
The next tier is a phone introduction or social media (LinkedIn) introduction. The customer makes a call to the referral and tells him how you met and what you are providing him, and asks if he is willing to take your call. The close ratio on these is about 50%.
The top tier is a face-to-face introduction. He may have lunch or coffee and personally introduce you. The close ratio on these is about 85%.
Understand that most new salespeople must start in the lower tiers and work their way up as they build their client base.
Assignment
1. Based on what you’ve learned (in both the textbook and here), write a short paragraph on how you plan to ask for referrals from your clients.
2. What can you do differently that will encourage your clients to help you?
