Sales and Sales Management Blog

January 30, 2008

Referral Selling Isn’t About You


Becoming a referral-based salesperson has tremendous benefits: 
•  You spend far less time prospecting
•  Your sales increase
•  You spend less on mass marketing activities
•  Your income increases substantially. 

Referral selling isn’t about you

To become a truly successful and profitable referral-based salesperson, your focus must be on your client and their needs.  Your client, no matter how much they may like and respect you, is NOT concerned about your wants and needs.  They are concerned about THEIR wants and needs and in order to generate a large number of highly qualified referrals from your clients and prospects, you must communicate to them why it is in their best interests to give you referrals. 

Certainly, there are clients who will give a couple of good referrals now and then simply because they like you or they respect the work you do.  Buy you don’t want a couple of referrals every now and then.  You want a large number of highly qualified referrals from every one of your clients.  Unless the client understands that giving referrals is in his or her best interest, you will not generate the volume and quality of referrals you are seeking.

Why is it in the client’s best interest to give referrals? 

TIME AND ATTENTION:  you must make the client understand that you, as a referral-based salesperson, are unique.  You, unlike the vast majority of other salespeople, have the time to take care of their wants and needs because your clients provide you with your client base through their referrals.  If it were not for your clients providing referrals, you, like all the other salespeople, would have to spend 70-80% of your time prospecting for new clients, leaving only 20-30% of your time to sell and to monitor and administer your client’s purchases.

Asking your client a few simple questions will generally help remove any doubts about the value of you having the vast majority of your time free to see to their needs.  Ask your client:
•  if they have had purchasing experiences in the past where the salesperson didn’t properly monitor their purchase
•  if they have had experiences in the past where the salesperson was difficult to contact
•  if the salesperson didn’t keep them fully informed during the sale
•  if they have had an experience where problems arose during the sale that were not deal with in a timely manner
•  if they have had experiences where their expectations and priorities were not met. 

Every client you deal with will answer yes to at least one–and probably all–of these questions.

Explain that the root cause of these problems and issues is that the salesperson did not have the time and freedom to oversee the client’s purchase.  Rather than taking care of their client, the salesperson had no choice but to spend his or her time seeking out new commissions, leaving their current client’s sale to be worked on as they could eek out time.

After this line of questioning and your explanation of where the problems in past purchases arose, virtually every client I’ve dealt with quickly grasps how referrals are in their best interest.  People are self-centered.  They want their purchase, whether dealing with the most sophisticated high-tech system or simply a new washer and dryer, to go smoothly with all the details attended to.  They don’t want problems, and if they can legitimately help you pay more attention to their purchase—and you’ve earned the referrals—they will give referrals because it helps them, not because it helps you.

Since you don’t earn the referrals until after the sale has been completed, you must come through with results.  Just because a client agrees to give referrals upon completion of the sale because it is in his best interests, if you don’t perform to expectations, you will not receive the referrals because you have not earned them.  In fact, you will have lost all credibility with the client because your explanation of why you deserve referrals and how they benefit the client will have proven to be false.

EGO:  Clients will also give referrals to stroke their egos.  If you have established yourself as a referral-based salesperson whose business is exclusive enough to demand potential clients come through referral, then many clients will be happy to refer you to others for no other reason than to flaunt the fact that they work with you.  From your perspective, that is a valid enough reason.  You want the referral; the client wants the perceived prestige.  You both win.

In both of the above cases, the focus is on the client.  And of the two reasons for giving referrals, you will find far more clients motivated by the care you can afford their purchase than by the stroking of their ego.

Either way, you must take the time to explain to your client why you work by referral and why providing referrals are in their best interests, not yours.  If you are mindful that the client is self-centered and needs to be motivated by self-interest and you live up to the promises you make, you will find almost all clients are open to giving a number of quality referrals.

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1 Comment »

  1. Hi Paul,

    Some other benefits of referral-based selling I’ve experienced:

    Usually faster establishment of trust with the referral customer
    Eliminates many common ‘objections’ or sale conditions
    Greater profitability
    Greater customer satisfaction
    Increase chance of referrals from customers who have themselves been referred
    Improved closing ratios
    More time-efficient (for salesperson and customer)

    Regards,

    Liz

    Comment by BMW Sydney Sales — September 4, 2008 @ 5:54 am | Reply


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