How to Grow Great Referrals

By Heather Baldwin

Your sales reps know they should be asking for referrals. In fact, they tell you they have asked a lot of customers for referrals but the responses are always lukewarm, and their “referrals” rarely turn into business. What’s going on here?

Referrals are a tricky business if you don’t know what you’re doing – and many reps don’t. Many say they don’t want to ask for referrals because they don’t want to irritate a customer with whom they have good rapport. Or, in an effort to be casual about it, they ask in such an oh-by-the-way manner that the customer quickly dismisses it. Or they ask once and drop it. And none of these approaches will result in good, solid referrals.

So what’s the answer? Referrals must be an integral part of your sales approach, from first contact until post-sale. To generate higher numbers of quality referrals, here are four rules to follow from Paul McCord, author of Creating a Million-Dollar-a-Year Sales Income: Sales Success Through Client Referrals.

PLANT referral seeds. From the very first contact with the customer, establish the fact that you’re a professional salesperson who works primarily from referrals. When you’re on the phone with a new prospect, you might say something such as, “Mr. Smith, I called today because, even though I primarily work only by referral, I ran across your name and believe that my service could greatly benefit your company.” During the sales process, remind your client that you work from referrals and that you will be asking for referrals once the sale has been completed.

WATER the referral seeds. This step is about cultivating the future referrals. As you exceed expectations, get verbal commitments from your clients to supply quality referrals after the sale. And make sure your customer knows exactly what a quality referral is for you. Simply asking your customer if he or she knows of anyone else who could use your service won’t cut it. When you clarify that quality referrals are referrals to CFOs at technology companies larger than 1,000 employees, you’ll get names you can really use. Finally, change your voicemail, email, and printed materials to include a statement about your referral-based business.

WEED the referral garden. The weeds of the referral garden, like the weeds of a real garden, are undesirable problems. They can be eliminated by promptly and honestly addressing problems or issues that arise during the sales process. Weeding is also about building trust with your clients by keeping every promise you make, no matter how small. You weed the garden when you meet your client’s exact needs and objectives, not those that you think are the client’s needs and objectives, says McCord. In short, weeding is about earning the referrals.

REAP the rewards. Once you’ve closed the sale and have done a top-notch job for the client, set up an appointment with your client for a referral meeting. Let your client know that A) the meeting will be short, only 20 to 30 minutes; B) that he or she should be prepared with names, addresses, and phone numbers of the referrals; C) that you’ll be asking a few questions about each referral (i.e., how long the client has known the person, how well, in what capacity, how long the person has been with his or her company, etc.); and D) you may have a few potential referrals to ask about. End the discussion about each referral by asking why you’re being referred to this person. “Hidden in the answer, you’ll often find your primary sales approach,” says McCord.

Don’t think your client has the time for this meeting? McCord says you’ll be surprised at how willing customers are to share their time and connections with you if you have done a good job for them. McCord says he has received great referrals from physicians, CEOs of Fortune 50 companies, and other people usually considered too busy to give referrals.