Sales Management Digest

Quick Tips for Getting Better Customer Referrals
Geoffrey James
More referrals means more sales. But, for referral selling to work effectively, it must become the overarching sales strategy of the organization.

This means much more than a directive from upper management commanding sales reps to ask for more referrals. For referral selling to work, management must decide shifting to a different sales model – and providing the training and reinforcement required to integrate the new behaviors into the organization – is in the best interest of the organization.

Beyond this, experience has shown that referral selling is most successful when sales management embraces the concept passionately. This is important, because referral selling runs counter to most traditional sales models, which tend to emphasize tactics that limit sales-rep activity to actual sales encounters.

For example, many sales organizations suggest that sales reps gracefully extract themselves from sales calls that aren't likely to result in a sale. In a referral-selling environment, however, the sales rep sees every call – even those that aren't with future customers – as an opportunity to discover new contacts that might actually become customers.

In other words, referral selling is exactly the opposite of what's usually called "selling by the numbers." Organizations that sell by referral attract more loyal customers who will refer you elsewhere, based on your good relationship. Because referral selling has a higher closure rate and higher average sales amount than other selling methods, sales typically result in 20 percent higher revenue and profit than the old, hard-driving way of doing business.

Quick Tips for Gaining Better Referrals
  • Define your niche, and position yourself as the expert. Buyers will spend money on people with the expertise they need. Be specific.
  • Network like crazy! Your goal should be to attend at least one event per week where you'll have an opportunity to meet potential clients.
  • Translate what you offer into the business results your client will achieve. Be a "need to have" and not a "nice to have."
  • Think of everyone you know as a potential referral source. It's not about who they are; it's about whom they know – and you have no idea whom they know until you ask.
  • Always get an introduction. When you are introduced to a person you want to meet and who wants to meet you, your call will now be h-o-t, hot!
  • To set yourself up to get a good referral, tell your referral source you are building your business through referrals and would like that person's help.
  • Describe clearly the business results you typically deliver to your clients.
  • Describe your ideal client and ask the referral source if he or she knows anyone who fits that description.
  • Ask your referral source to make the introduction – either by phone, in person, or by email.
  • Follow up with a thank-you/reminder, and keep your referral source posted on your progress.
How can you reinforce the concept of referral selling with your sales team? In your next team meeting, ask everyone to write down a list of everyone they know – current clients, past clients, peers, neighbors, service providers, friends, past coworkers, volunteer groups, etc. Set the target at 100 names. At an average of 10 seconds a name, this should take about 15 minutes.

Then, repeat the exercise; but, now, have salespeople role-play as a sales rep who is seated next to a potential referral source during a trade-show conference lunch. Point out that, in this situation, they will need to create credibility and trust prior to asking for the referral.

Finally, tell your team that you want regular reports on the progress of their referral-selling effort, and thank everyone in advance for their participation.

Tips are taken from a conversation with referral-selling expert and author Joanne Black. Visit her website at NoMoreColdCalling.com.
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