Here’s a question: Would you rather your sales reps spend their time on a prospecting activity that generates a 2% return or one that generates at least a 50% return? If you think that’s an obvious question, then why are the vast majority of organizations doing the former? Think about it. Most companies find prospects from activities that yield single-digit results, such as cold calling, advertising, direct mail, email blasts and so on. Yet when reps get a referral, on average they get a new client at least 50% of the time, a number that has grown closer to 80% to 90% in the last couple months, says Joanne Black, founder of No More Cold Calling (www.nomorecoldcalling.com), a company that transforms salespeople into referral selling stars.
“When someone is referred they usually want to hear about your solution,” says Black. “As a result, you can have business conversations instead of having to justify why you’re there. You eliminate all those initial steps and shorten the sales process – you start with a different relationship.”
If you’re nodding your head thinking you already know all this, you’re not alone. Most people in the sales business agree that referral selling is unbeatable, but they still aren’t doing it, says Black. The reasons: it’s a learned skill, it feels too pushy to some people, there haven’t been any metrics around referral selling and it’s not part of most companies’ sales processes. To change all that – to stop playing the numbers game and transform your sales team into a referral selling organization – Black suggests starting with the following steps.
1. Ensure you’ve got passion and commitment from your executives. In addition to the sales executives, that means you need enthusiastic buy-in – from the CEO, the CFO, the head of IT – because you’re going to change how you measure and track prospects and others. “They truly have to believe that this is the way they’re going to work,” says Black. The message and actions need to be consistent, unlike they were at one company that said it was committed to the transformation, but then made all its sales reps conduct a cold-calling blitz one night. Make the switch; then stick with it.
2. Set up metrics for the sales team. With metrics you’ll know when this initiative becomes successful. Black is a supporter of weekly measurements, such as: How many people are reps going to ask for referrals each week? How many referral meetings should they aim to have? These kinds of metrics need to be established and then tracked.
3. Launch the initiative. This is the formal kick-off when you let everyone know they’re switching to a referral-selling culture. At this point you need to start doing things that will change people’s thinking about how they sell. For example, compensation should be changed to reflect the shift. One of Black’s clients gives a bonus for each referral client.
4. Create experts. Here’s where you do the training to provide your sales reps with the skills and tools they need to ask for referrals.
5. Implement the process. This includes setting goals with individual reps, coaching them, reinforcing, measuring and rewarding. “The hardest part of every change is implementation. Unless the high beams are on what you’re doing, people tend to let things slide,” says Black. “So implementation must be ongoing.”