Sales and Sales Management Blog

June 19, 2009

Boost Your Sales series: “Your Connections Are Your Key to Sales Success,” by Paul McCord


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Your Connections Are Your Key to Sales Success
by Paul McCord

I hear many sellers complain that directly asking for referrals is too uncomfortable so they would much rather generate referrals by asking their clients to recommend them when the opportunity occurs. 

Bad mistake.

Not only do they misunderstand how to generate referrals, they’re confusing referrals with Word of Mouth Marketing. 

They’re not the same. 

Both can be highly valuable in building and maintaining a solid and growing sales business.

Neither can be done successfully if left to chance as most sellers do.

Unless you are selling a highly specialized product or service in a narrow market, your connections can be the foundation of a business that puts you in the top earnings category of your industry.

But to do so, you must learn how to turn both referral generation and word of mouth marketing into a disciplined process rather than a chance happening.

Referral Generation

First, let’s clear up some language issues.  We’re not talking about “asking for referrals.”  Asking for referrals traditionally has entailed asking a lame question such as “do you know of anyone who might be able to use my products or services?”  The goal of such a question is garnering the name and phone number—if you’re lucky, two– of someone your customer knows.  Over the decades this method has been taught, most sellers have discovered it isn’t very effective and a great many sellers simply quit asking.

Instead of “asking for referrals” we’re going to talk about “referral generation.”  Referral generation isn’t a question, it’s a proactive, disciplined process that begins the moment you meet a prospect and continues throughout your relationship with the person or company that generates a consistent flow of high quality referrals.

The traditional method of seeking referrals, the “do a good job and ask for referrals” method that is taught by the vast majority of sales trainers and training programs that address referrals, creates so many issues that failure is almost inevitable.

By simply “doing a good job” and then “asking for referrals,” you create these issues for your client:

  • This question is normally thrown at a client at the very end of the sales process and without any forewarning what-so-ever.  It’s a question that comes out of the clear blue catching an unsuspecting client by surprise and often making them feel that they’ve been ambushed by the salesperson. 
  • Most often, upon asking for referrals, the seller stands in front of the client waiting for an answer.  Is it any wonder that many clients are uncomfortable and feel that they’ve been cornered by the seller?
  • If the client gives a “referral,” it is most likely nothing more than a name and phone number that is no more qualified than if the seller had opened the phonebook and pointed at a name and number at random.  The seller has given the client no time to become comfortable with the idea of giving referrals and only about 10 or 15 seconds to go through their mental file cabinet to find a quality prospect to give; nor has the seller defined for the customer what constitutes a good referral for them.
  • Not only has the seller put their client in an uncomfortable position, they haven’t given their client a reason to give referrals.  Despite the common assertion by sales trainers to the contrary, most clients don’t want to give referrals.  Certainly, there is a small percentage that gladly give referrals, but most need a good reason to give quality referrals and with the traditional method of asking for referrals, the seller hasn’t given the client a reason to give them.
  • Although we may think of a referral as nothing more than our client giving us the opportunity to talk to someone who might need our product or service, our client thinks of giving a referral as telling the referred prospect that they wholeheartedly endorse us and that the prospect should trust the client and work with us based on their endorsement.  For most clients, that’s a big step and a great many are reluctant to take it.  Many clients believe that the people they refer us to will be more critical and more demanding than they have been and, therefore, they need to be sure that we aren’t going to embarrass them by disappointing the prospects they refer.  Consequently, we must let the client know that they aren’t going to give referrals but rather we’re going to earn them.  Therefore we must give them an objective way of evaluating whether or not we’ve done that.  Like the issues above, the traditional method taught by most trainers and training methods ignores this issue.
  • Finally, the traditional method of asking for referrals makes the client do all of the work.

Is it any wonder sellers feel uncomfortable asking for referrals?  If I was going to do this to my client, I’d be pretty uncomfortable too.  In fact, I’d probably not even ask.

Fortunately, there is a process that allows you to work with your client, eliminates all of the above issues, and will consistently generate a large number of high quality referrals.

Although I could write the book about the process and how to implement it in your sales business (actually, I did write the book, Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals, Wiley, 2007), for brevity’s sake, I’ll simply lay out the process:

Let Your Prospect Know You’re Referral-based: From the moment you meet a prospect, begin planting the referral seeds by letting them know that you are a referral-based seller.

Consistently Drop Referral Seeds:  You don’t have to beat your prospect over the head about referrals, simply gently mention that you’re referral-based when the opportunity arises.  Prospects and clients aren’t stupid and if they hear it enough, they’ll put two and two together and figure you’ll eventually be asking them for referrals.

Have a Direct Referral Conversation with Your New Client:  Once your prospect has converted from prospect to client, you need to have a direct conversation about referrals with them.  The conversation is to let them know why your clients give you referrals, that is, why it is in your client’s own interest to give you referrals; what a quality referral for you is; that your client doesn’t just give you referrals, you earn them, and set the standards by which your client will judge whether or not you’ve earned them; and get your client’s verbal agreement to give referrals if you’ve earned them.

Continue the Referral Seeds:  After your referral conversation, go back to just dropping referral seeds.  Again, there’s no need to beat your client about the head, just gentle, conversational reminders is all that’s needed.

Set the Referral Acquisition Meeting:  Once the sale has been completed, set a meeting with your client to get your referrals.  Set the meeting for a date a few days in the future—remind your client of their agreement to give referrals if you’ve earned them; confirm that you have earned them; review what a good referral for you is; give them a bit of time to think of whom to refer.

Don’t Make Your Client Do All The Work:  While you were working with your client you should have been paying attention and learning whom your client knows.  At the referral acquisition meeting, after your client has given you their referrals, ask them to refer you to the people you’ve learned they know—or you think they may know—that you know you want to be referred to.  By paying attention and asking for specific referrals, you’ll double, triple, quadruple or more the number of quality referrals you receive.

Don’t Get Names and Numbers, Get Introduced:  Instead of just getting a name and number like everyone else, get a direct introduction from your client to the referred prospect.  Get a letter of introduction, arrange for a conference call between the three of you, or set a lunch meeting with your client and the referred prospect.  An introduction turns a name and phone number into a real referral.  A name and phone is nothing but a name and phone number.

Keep Your Client Fully Informed:  Thank your client for every referral and make sure you keep them fully informed of what is going on with each referral they give you.  Not only do they want to know that they’ve helped you, they want to know that you’re not giving them reason to regret having given you referrals.

Word of Mouth Marketing

Word of mouth marketing is a very different animal than generating referrals. 

Word of mouth marketing is the verbal (most often) recommendation of a good, service, or provider of a good or service.  Where a referral is the direct introduction of you to a prospect by a client (or other referral source), word of mouth marketing is having someone suggest a prospect contact you.

These are two radically different forms of prospecting and personal marketing–with very different result expectations.

You control what happens with a referral.  You work with your client to generate the referral.  You get a direct introduction to the prospect.  You’re in control.

With word of mouth marketing you hope your client (or other source) recommends you to a prospect, then you hope the prospect contacts you.  You are almost totally dependent on the effort of someone else to generate prospects for you.

Because they are diametrically opposite in approach, they complement one another well.

Although you have little control over word of mouth marketing, you need a process that will give you as much control and allow you to capture as many word of mouth recommendations as possible.

What process works to help capture as many word of mouth recommendations as possible?  Here’s what works for me.  Again, as above, in abbreviated form:

Earn Recommendations Before Asking for Recommendations:  Although your family and friends may recommend you no matter whether they think you’re the best at what you do, few customers and acquaintances will.  Make every contact’s experience with you exceptional.  Earn their word of mouth recommendation before you ever bring the subject up—and if you’ve failed to make their experience exceptional, don’t ask for recommendations.

Let Your Recommendation Sources Know You Appreciate Their Recommendations:  Let everyone know that you sincerely appreciate their efforts.  Thank them before you get a recommendation from them.  Thank them after every recommendation you receive from them.

Let Your Recommendation Sources Know You Would Like to be Notified When They Recommend You:  You need to know who your sources have recommended you to so you can contact them if you don’t hear from them.  Studies have shown that only about 40% of the people whom you are recommended to will ever contact you.  If, however, you can follow up with them, the number you talk to increases to about 65%, increasing by over 50% the number of recommendations that you have the opportunity to sell.

Give Your Sources a Reason to Take the Time to Recommend You:  Offering your sources a small incentive for making a recommendation is a tangible ‘thank you’ that most clients and recommendation sources will appreciate.  Your incentive need not be particularly large, but it does need to be valuable in the sense that it has value to your source.

Keep Your Recommendation Source Informed:  Just as with a referral, you need to make sure you keep your recommendation source informed of what is happening with the person they recommended you to.  Seeing that their recommendation has proven beneficial for both you and the person they recommended you to will encourage them to make additional recommendations.

To make referral generation and word of mouth marketing effective, you can’t leave them to chance.  If you are willing to invest the time, effort, and dollars to learn how to turn referral generation and word of mouth marketing into effective processes, they can take your sales business to new levels quickly. 

 

Paul McCord, a leading Business Development Strategist and president of McCord Training, works with companies and sales leaders to help them increase sales and profits by finding and connecting with high quality prospects in ways prospects respect and respond to.  An internationally recognized author, speaker, trainer and consultant, Paul’s clients range from giants such as Chase, New York Life, Siemens, and GE, to small and mid-size firms, as well as individual sales leaders.  He is the author of the popular Sales and Sales Management Blog (http://salesandmanagementblog.com). 

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3 Comments »

  1. Great article! I have often found by producing a great job that a client is happy with that they are quite happy to give referrals in fact they feel quite often that they should because at the time they are overwhelmed with the quality of the job you have produced for them.

    http://optimiseit.net/

    Comment by optimiseit — June 19, 2009 @ 6:49 am | Reply

  2. Paul-
    Great attention to referral selling this week. Glad referral sales are getting some press and that you’ve included different points of view on referrals. Bravo!

    Comment by Joanne Black — June 19, 2009 @ 4:42 pm | Reply

  3. […] to real sales and sales leadership issues with ACTIONABLE guidance, … The rest is here:  Boost Your Sales series: “Your Connections Are Your Key to Sales … This entry is filed under Love, Management, Sales Management, sales. You can follow any […]

    Pingback by VandeNikhilam USA » Boost Your Sales series: “Your Connections Are Your Key to Sales … — June 24, 2009 @ 4:39 am | Reply


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