Sales and Sales Management Blog

March 31, 2008

Pump Up Your Pipeline Using the 5 by 5 Referral Method


You’re probably aware that it’s getting tougher to find qualified prospects and turn them into clients. It’s getting tougher to make your numbers, and to maintain, much less increase your commissions. Working the phones, sending out direct mail, faxing fliers, buying ads, haunting the halls of the chamber networking night aren’t producing what you need.

It’s time to look inward. No, I’m not suggesting you look inside yourself, although that’s also a good idea; rather look inside your database of clients. Your database has more sales locked up in it than you will probably ever find through any prospecting or marketing strategies you employ.

There simply isn’t a more effective or profitable prospecting or marketing strategy you can use than generating quality referrals from your clients. Your database is the single most valuable asset you own. Right this second your database of clients has a lifetime of commissions locked up in it. That’s true whether your database has 200 clients or 20,000.

If that’s true, how do you unlock those sales? To tap your database and to build a referral-based business you must learn a comprehensive, disciplined, logical, effective referral generation process. Learning such a process takes time, energy, commitment and work.

But you don’t have the time to learn a new process, you need sales now, you say. Well, here’s the good news. You can begin to tap your database and generate quality referrals—and new business–while you learn the process of referral generation that will keep you from being in the position you are now.

The 5 by 5 Referral Generation Short cut

Although you must learn a disciplined referral generation process if you want to put your sales business on solid ground where you don’t have to scramble, dig, and discount for business, you can put a nice pop in your pipeline by instituting the 5 by 5-method of getting referrals from your clients.

The 5 by 5 method is not a permanent solution to your pipeline woes. For most, this is a short burst of new blood in their pipeline. A permanent solution only comes from learning and instituting a full referral generation process. However, the 5 by 5-method allows you to generate 15 to 25 high quality referrals in a matter of less than a week. If you work the referrals correctly, you should see a nice jump in your sales very quickly.

Here are the steps you need to take to make the 5 by 5-method work:

1. Sit down with your database and find 5 of your best clients. These are not necessarily the 5 biggest clients you have. Look for 5 clients that you know well, have an excellent relationship with, and that fit what you consider to be your ideal client profile.

2. Once you have identified your 5 clients, think about whom each of these clients know or probably know that you know you want to be referred to. You may have to do a little research on potential prospects that you believe your client may know. For example, if your client were the owner of a small engineering company, what other engineering companies would you like to be referred to? Don’t know? Do some research. What vendors of your client do you know you want to be referred to? Again, you may have to do a little research. What customers of your client do you want to be referred to? Yes, you may have to do a little research.

3. Once you have your list of 5 potential referrals from each of your 5 clients, it is time to approach the client. At this point, we are assuming you’ve selected your clients and your potential referrals carefully. The more care you take in your selection of each, the better the results you will have in both getting the referrals and converting the referred prospects to clients.

Since these are clients that you know well and with whom you have an excellent relationship, simply call and ask for a short appointment. Your request for referrals will be more successful, more comfortable, and more professional if you ask in person rather than over the phone or through an email.

When you meet with your client, explain that there are some folks you’ve been trying to connect with but haven’t had success and it dawned on you that your client might well know them. Ask your client for permission to ask them about each of your 5 potential referrals. If you’ve selected your potential referral prospects well, you client will probably know anywhere from 3 to 5 of them. If they know them, they will give you the referral.

By the end of the week, you should have at least 15 to 20—and possibly as many as 25—referrals to people or companies you know you want to be referred to.

4. Once you have your referrals, don’t rush off and call them. Ask your client for a direct introduction through a letter (written by you for your client’s signature), a phone call to the prospect (with you on the call also), or a lunch meeting with the three of you. You don’t want a “referral,” you want an introduction from your client directly to the referred prospect.

5. After the introduction, keep your client informed of what is happening with the prospect. Your client wants to know what is going on not only because they want to know they have helped you, but also because they want to know that you haven’t messed up with someone they referred you to. Reassure them that all is well.

If you would like more detail on how to execute each of these points, you’ll find much more detail in Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals. However, if you follow the above process, you should be able to generate a large number of high quality referrals fast—and pump some new blood into your pipeline in no time at all.

By the way, you can expand this to 5 X 10 or even a 10 X 10 method if your relationships are strong and you are willing to invest the time in giving serious consideration to whom your client might know that they can refer you to.

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