Sales and Sales Management Blog

January 8, 2015

3 Steps to Getting High Quality Referrals From Your Clients

Are you one of the majority of sellers that isn’t converting the majority of the referrals you get because the “referral” is nothing more than the name and phone number of someone who isn’t a real prospect?  Are you one of the sellers who have simply given up even asking for referrals because they have proven to be more of a waste of time than anything else?   Chances are you said yes because that’s the experience of most sellers–weak or worthless “referrals” that cost more time and waste more energy than they’re worth.  Oh, sure, we all have some clients that will give us referrals all day long.  Just ask and they’ll give you name after name.  Other clients, the majority, aren’t nearly as generous with their referrals.

The biggest problem in both cases is so often the referral we get isn’t much better than pointing at a name in the phonebook at random.

How can you guarantee that you get great referrals?  Simple.  Make sure the client gives you a great referral by creating the referral for them to give you, rather than relying on them coming up with a quality referral to give.

The reality is that clients really don’t know who we’re looking for and most of them just don’t have a real incentive to invest the time and energy to come up with a great referral.

But we know who is a great referral for us.  And certainly we’re willing to invest the time and energy to find a great referral (if we’re not, we have some real serious issues to deal with).

Since we’re the one with the need; and we’re the one with the desire; and we’re the one who knows who makes a good referral for us, why would we rely on anyone else other than our self to come up with the referral?

So how can we create a great referral for our client to give us?

Here are three steps to guaranteeing you get great referrals from your clients:

  1. Get Your Client On-board to Give Referrals.  Most sellers wait until after the sale has been completed before they bring up the idea of referrals.  Bad idea.

    Most clients need time to get comfortable with the idea of giving referrals, so bring up referrals early in the relationship.  Don’t ask for referrals; just let your client know that your business is built on referrals and then drop referral seeds as the sale progresses.  Since your prospects and clients aren’t stupid, if they hear you mention referrals often in a casual manner, they’ll get the impression referrals are important to you and they will be expecting you to ask for them at some point.

  2. Find Out Who Your Client Knows.  We’ve already established that in order to get great referrals you have to do the work for your client, so do it by discovering during the course of the relationship who they know that you know you want to be referred to.How do you find out? Through small-talk (who do they mention in conversation they know); paying attention to what’s in their environment (pictures, association directories, membership plaques, and such); their background (where did they work previously); their work (what vendors and suppliers do they interact with).  Your job is to be a detective and to uncover the relationships they have with people or companies that you know you want to be referred to.  The more you uncover the more quality referrals you uncover.
  3. Don’t Ask for Referrals, Ask for THE Introduction.  Now when it comes time to ask for referrals, you’re not going to be like every other seller and ask a weak question such as, “Donna, do you happen to know anyone else (or another company) that might be able to use my products or services (or that I can help—or any other such weak question)?”

    Instead you’re going to ask for a direct introduction to someone you know is a great prospect for you and that you have reason to believe your client knows:  “Donna, I’ve been trying to connect with David Jones for some time without success.  You mentioned that you’ve worked with David for several years, would you be comfortable introducing me to him?”  You know she knows David.  You have reason to believe David is a good prospect for you.  Don’t waste Donna’s time with that weak general referral question; ask to get connected to a person you know she knows that you know you want to connect with.

Referrals can be the foundation of your sales business if you just develop the skills necessary to be a referral-based salesperson.  If Donna knows three people or companies you know you want to be referred to and you can get introductions to them from her, how much time and energy have you saved getting those three introductions through referrals instead of cold calling or sending out direct mail or hoping to bump into them at a networking event?

Forget what you’ve been taught about asking for referrals.  Referral generation is a PROACTIVE process where you do the work, not your client.  Your client doesn’t have the motivation, you do.  They don’t have the understanding of who makes a good referral like you do.  Your client doesn’t have the time to invest in figuring out a good referral like you do.  It’s your business, not theirs.

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August 12, 2014

Your Client has a Vested Interest in that Referral They Just Gave You

I hope you are generating referrals from your clients.  If you’re not you should be as referrals are one of the most effective, if not the most effective, way of growing your business.  But know that once you have gotten the referral your job is hardly done.  No, I’m not talking about contacting and selling the referred prospect, I’m talking about keeping your client in the loop.

One of the primary reasons clients are hesitant to give referrals is that they are afraid of being embarrassed in front of a friend, relative, acquaintance or co-worker by you not performing as you should.  So, when they do give a referral, they have a vested interest in what’s going on between you and the person to whom they referred you.  Their interest isn’t in whether or not the prospect purchases but in how the prospect perceives you and the value being referred by the client.

When a client gives you a referral, you learn a number of things:

  1. The client will give referrals.  Obviously, you just received one or more.
  2. How well the client understands what you do.  The quality of the referral will let you know how well your client understands what you do and who is a good referral for you.  The better the referral, the more the client understands.  The poorer the referral, the more work you must do to educate them for future referrals (and future sales to them for that matter).
  3. How much they trust you.  Generally, the stronger the trust relationship between the client and the referred prospect, the more the client trusts you.
  4. They have more referrals to give.  Seldom will a client give you all of the referrals they can make at one time.  If a client gives referrals, you can almost bet they have more to give—if you keep earning them.

How do you get those additional referrals?  Additional referrals are earned, just as the original referrals were earned.  You earn those additional referrals by:

  1. Giving your client the assurance that you’re trustworthy with referrals.  You must show through your actions that their trust in giving you a referral was well placed by making sure that the referred prospect has an exceptional experience with you.
  2. By keeping your client fully informed of everything that is occurring with the referred prospect.
  3. By continuing to deliver superior service to your client.

Does the above mean that you must perform perfectly with the referred prospect?  What if there was an honest mistake or miscommunication?  What if something out of your control happened during the course of the sale?  Will these incidents destroy any possibility of acquiring additional referrals?

No, not at all.

The keys to gaining additional referrals from a client are to treat the referred prospect exactly in the same manner you treated the client and to keep your client informed of what is transpiring between yourself and the referred prospect.

Your client gave you referrals because they understood that giving referrals was in their own best interests and because you earned them through the service you gave them.  You must now demonstrate that same level of service for the referral they have given you.  They expect—actually demand—you perform at the same level—or higher—for those they refer to as you did for them.  That level of service you gave them was what demonstrated to them that they could trust with a referral.  Anything short of that and they will reevaluate whether you should be trusted with additional referrals.

That having been said, most clients understand that mistakes, miscommunications, and problems arise in business.  A single issue during the course of the sale to a referred prospect, even a major issue, will not sever your ability to gain additional referrals from you client if you address and resolve the issue in an exceptional manner.

Clients don’t expect perfection, they expect exceptional service—both for themselves and for those they refer you to.  How well or poorly you handle the issues will be a major factor in determining your future refer-ability.

Keeping your client informed of the progress of the sale with the referred prospect reassures them that you’re doing your job—and that all is well.  It is also your source of informing them if there have been problems and how they were resolved.

It is critical that you let your client know of issues involved with sales to prospects they have referred you to before the prospect has a chance to relate the incident.  You can relate the circumstances and the resolution in the most favorable light—the prospect may not.  This doesn’t mean that you can lie or gloss over it, just that you can give the background and the full resolution without the emotional involvement the prospect will have.  Of course, if you’ve done an exceptional job of resolving the issue, the tale told by the prospect should also be impressive.  However, you always want problems to be related to your client by you—you don’t want to get a phone call from the client asking what happened.

Keeping your client informed doesn’t mean bombarding them with emails, phone calls, and notes.  A simple “thank you for the referral” card immediately after receiving the referral and the occasional call or email will suffice.  The object is to keep them in the loop and to reassure them that their referral was well made for both you and the prospect.  Even better than the occasional call or email is to explicitly ask the client how and how often they would like to be informed of the progress.

Clients are interested in what’s going on with the referrals they make.  They want to know the prospect is being taken care of in the manner the client expected, and they enjoy knowing that they have provided you with a quality referral.  More importantly, they want to know that they haven’t embarrassed themselves in front of an acquaintance.

Simple actions will earn those additional referrals your clients have—you just have to earn them.

February 24, 2014

Looking to Grow Your Business? Learn How to Get Directly Introducted to Your Best Prospects

Whether you’re relatively new to sales or are a scarred, proven old pro, prospecting is a tough chore that we all must do otherwise we’ll quickly find ourselves out of business. 

And there are a great many ways to prospect, from cold calling to cold walking to networking to purchasing ads to social media to encouraging word of mouth referrals to the traditional asking for referrals from clients and friends.  Depending upon your industry and personality, some methods work better than others.

But in the end the object is to get in front of decision makers that are great prospects for you, that is, decision makers who need and can afford your product or service.

Like a great many sellers I was taught that after the sale I should ask my client for referrals to others they know that might be able to use my product or service.  And like a great many other sellers I discovered that asking for referrals in that manner simply didn’t produce much of value.  Sure, I’d get some names and phone numbers but most of the time they were either poor prospects or no prospects at all.

Over the years I’ve spoken to thousands of sellers who were taught the same referral generation process who have experienced the same disappointing results that I experienced.  Many continue to ask knowing that only a small portion of the names and phone numbers they get are of value, while many, many others have simply given up on referrals all together.

A few years ago I discovered a referral generation process that is far different than the traditional “do a good job and ask for referrals” process that most of us have been taught that produces so little return for so much time invested.  Rather than asking clients to do our prospecting for us, the process I discovered demands that we do the work for our client and instead of getting a name and phone number of someone who more than likely isn’t a real prospect for us, the process I use generates a direct introduction to my hand picked prospect. 

The process that I teach allows you to maintain complete control of the referral process, takes all the work off the client, doesn’t put the client in an awkward and uncomfortable position of feeling that they have to give a name and phone number, and gets you introduced directly to someone you know is a great prospect for you.

If you’d like to learn more about how to generate direct introductions to your hand picked prospects head over to LeadLifter as I just completed a 45 minute webinar for them that outlines the whole process.  You can listen to the webinar at your leisure and for free at the LeadLifter events page.

July 18, 2013

Are You Committing Any of These 10 Referral Destroying Mistakes?

Filed under: Uncategorized — Paul McCord @ 2:58 pm
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Referrals are touted as being the best prospecting tool in any salesperson’s toolbox. According to sales legend, referrals are the key to becoming a top producer.

Virtually within 30 minutes of entering the sales field, most salespeople are told that if they want to succeed, they must get referrals from their customers and clients.

Yet, the truth of the matter is that few salespeople generate very many quality referrals. Certainly, a few salespeople have figured out how to generate enough quality referrals to run their very successful sales businesses. These men and women are by far the exception, not the rule. Moreover, studies have shown that those men and women who have learned how to generate a large number of high quality referrals earn four to five times their industry average.

There are others who get a few names and phone numbers here and there and think they are getting referrals. Unfortunately, most of these “referrals” don’t turn into sales. They do, of course, get a sale out them every so often, but for the most part, these “referrals” are nothing more than names and phone numbers that are no more qualified than if they simply picked names at random out of the phone book.

Most salespeople, however, find that referrals are not all they’re cracked up to be. In fact, referrals have proven to be so disappointing that the majority of salespeople don’t even ask for them. Many salespeople quickly conclude that referrals just aren’t worth their time and effort. These salespeople determine that referrals are just a myth, or that their clients won’t give referrals, or that their clients don’t have referrals to give, or that they will irritate a client if they ask for referrals.

In fact, the problem isn’t with referrals or their clients. The problem lies with how the salesperson goes about asking for referrals. Here are the top 10 referral mistakes salespeople make:

1. Not asking
It shouldn’t be a big surprise that if you don’t ask, you won’t get referrals. Almost 70% of all salespeople don’t even ask for referrals. They don’t even bring the subject up! Of course, they don’t get referrals. Of course, referrals are a myth. How can you expect to get something if you don’t even try?

Seldom do referrals simply drop out of thin air like manna from heaven. Moreover, those who don’t ask have a legion of excuses as to why they don’t ask. They don’t ask because they know they won’t get them anyway; their clients don’t know anyone to refer; they will upset their client; their clients are too busy to give referrals; they don’t want their client to think they are begging for business or that they are needy. These are simply excuses. Salespeople don’t ask because they are afraid of asking. Pure and simple.

2. Asking only once
Studies have shown that those salespeople who do ask generally only ask once. Certainly, asking once is better than not asking at all. But statistically, asking once will only generate 1.47 names and phone numbers. Less than one and a half referrals per client. And since most of the “referrals” the typical salesperson gets are of poor quality, getting less than one and a half referrals per prospect is pretty discouraging. That means they’ll have to ask several clients to get a single sale.

However, the same studies that show salespeople receive less than one and a half referrals when they only ask once show that salespeople who ask for referrals twice receive 2.03 names and phone numbers from each client. That means for every 10 customers asked, the salesperson who only asks once for referrals will get 14 names and phone numbers, while the salesperson who asks twice will receive 20 referrals–almost 50% more. Now, these aren’t any better quality referrals than the ones the salesperson who only asks once receives, but at least they have many more opportunities to make a sale–simply by asking for referrals a second time.

And those who had the temerity to ask a third time? They received, on average, 3.28 referrals from each customer. Therefore, for every 10 customers asked, these salespeople receive 32 referrals, more than three times the number of the salesperson who only asks once. You think they might make more sales than the person who isn’t asking or who only asks once–or even those who ask twice?

Those salespeople who use the PWWR Referral Generation System(TM) averaged 5 referrals per customer. In addition, these weren’t the typical name and phone number but were high quality referrals. For every 10 customers, these salespeople received an average of 50 referrals, most to high quality prospects. If their close ratio is only 25%, they will close 12 sales without having to spend time prospecting and money marketing.

3. Suggesting instead of asking
Many salespeople “suggest” referrals instead of asking for them. Instead of making a direct request, they try to soft peddle the request by saying something like: “Mr. Client, if you happen to run across someone who could use my product or service, would you give them one of my cards?” Alternatively, “Mr. Client, if you know of anyone I might be able to help, I’d appreciate it if you’d tell them about me.”

This is the chicken’s way out. They don’t want to offend, so they don’t ask. But they don’t want to miss the opportunity for a referral. The solution is to suggest that the client pass their name along. If this is your referral generation format, don’t hang around the phone waiting for the calls to come in.

4. Waiting until the sale has been completed to bring up referrals
Most who do ask wait until the sale has been completed before they even bring the subject of referrals up. One of the issues salespeople have with referrals is they believe based on their experience, that asking for referrals makes their clients uncomfortable. The request seems to be an unwelcome one by most of their clients. And it is–not because the request for referrals is itself an intrusion, but because of the timing of the request.

By waiting until the last minute to bring the subject up, the salesperson has given the client no time to think of whom to refer and they have waited until the client has mentally moved beyond the sale. The sale is complete. It’s over. The client has already mentally moved on to other issues. They’re simply waiting for the salesperson to leave so they can begin to take care of other business. And, bam, here comes a request out of the clear blue that tries to pull them back into the sale. What should have been a simple request is now an intrusion.

5. Focusing on their needs, not the client’s
The typical referral request goes something like this: “Mr. Client, let me ask a favor. It would really help me if could give me the names and phone numbers of a couple of people (or companies) that I might be able to help as I’ve helped you.” Or, “Ms. Client, do you know anyone else that might be able to use my services? It would be a great help to me if you could give me their names.”

Clients don’t give referrals because they like you, because they respect you, or even because you did a good job. Clients are human beings. Therefore, like most human beings, they do things because they perceive them to be in their own best interests. For the most part, clients don’t really care what will help you; they care about what will help them. That’s not to say that a few clients won’t give referrals for no reason; there are a few who will. Most will not.

The majority of salespeople focus on themselves when requesting referrals instead of focusing on the client. To be successful in generating referrals, you must give the client a reason why giving referrals is in their best interest, not yours.

6. Not defining what a good referral is
As basic is it is, few salespeople let their client know what a good referral is. Instead, they assume the client understands what a good referral is. Bad assumption.

Although you know what a good referral for you is, your client doesn’t. They need direction. While you are standing there thinking, “Give me someone just like you,” they’re thinking “what does this person want and how do I get rid of them.” If you want a quality referral, you must let your client know who you’re looking for. If you don’t, no telling what you’ll get.

7. Not understanding the psychology of the referral
Getting a large number of high quality referrals from clients and prospects isn’t easy. In fact, less than 15% of all salespeople generate enough quality referrals to significantly impact their sales.

In order to become a successful referral salesperson, you must come to understand the psychology of referrals. Clients and prospects assume that whomever they refer you to will be more demanding and more critical than they have been. They assume that whomever they refer you to will be less forgiving of the little issues that come up in a sale. They assume that whomever they refer you to will be less satisfied with the sale than they have been.

In addition, clients and prospects will refer you to people whom they have various types of relationships with. Some of the people they refer you will trust and respect them. Others will be casual acquaintances who neither trust nor distrust your client. Some will even be people who distrust and disrespect your client.

To make matter even more complicated, you must understand your psychology of referral selling. What goes on in your brain is just as important as what goes on in your client’s and the prospect’s brain.

Unless you have a thorough understanding of the psychology of referrals and the relationship between your client and the referred prospect, your likelihood of massive success is minimal.

Like much of selling, the process is more psychological than physical.

8. Calling the referred prospect
The natural inclination when you’ve received a referral is to pick up the phone and call the prospect. Wrong move. When you simply pick up the phone and call, you’re giving the prospect the opportunity to determine you’re nothing but another tele-marketer and to mentally cut you off before you even have the opportunity to bring up your client’s name.

There are a number of ways of contacting a referred prospect, but the key is to get a personal introduction, not just a name and phone number.

9. Not helping the client give referrals
Despite their best efforts, even mega-producers who make huge incomes off their referral-based business have clients and prospects who claim not to know anyone to refer. Yet, these men and women still walk away with a fistful of high quality referrals.

How do they do this? They don’t rely on their client to come up with people or companies to refer. Instead of hoping that their client has referrals for them as most salespeople do, they are proactive and help their client make high quality referrals. They discover whom the client knows that they know they want to be referred to and they ask to be referred to those people.

10. Not earning the referrals
If you want a large number of high quality referrals, you can’t just ask for them–you must earn them. They’re not just given, they’re earned.

Successful referral salespeople understand that the number and quality of the referrals they receive is dependent upon giving their client the purchasing experience the client wants, not the one the salesperson wants to give the client. Consequently, they find out what the client wants and expects to happen during the course of the sale and then they give the client the exact purchasing experience the client wants, thus earning the referrals.

You cannot ask and expect referrals if you haven’t earned them. And you don’t get to determine whether or not you’ve earned them–the client makes that decision so you must give them an objective way to determine whether or not you have earned them.

Obviously, generating a large number of high quality referrals is difficult. If it were easy, every salesperson would do it. However, by understanding the issues that kill referrals and then learning how to eliminate those issues, you can generate a huge volume of high quality referrals. Referral selling isn’t dependent upon luck, or having the “right” clients, or using bribes or incentives. It is dependent upon knowing the process that will overcome the issues associated with getting referrals, implementing that system, and then honing your referral selling skills. And once you’ve learned the system and honed your skills, it becomes a natural part of your selling process.

No matter your product or service; no matter whether you sell to individuals or businesses; no matter the cost of your product or service or the length of the selling cycle, you can build a referral-based business. It simply takes knowledge, skill, and practice.

February 25, 2013

Building Your Business on Referrals Pt 3: You Don’t Need Referrals, You Need Introductions

How often as a B2B seller have you been advised to ask your client for referrals?  If your experience is typical then you’ve heard that advice just about every time you turn around.

Most of us have had it pounded into our heads that we need to ask for referrals after the sale has been completed. We just need to do a good job for our client and then, after the sale, ask them if they know of anyone who could benefit from our products or services and we’ll easily and rapidly grow our business.

Depending upon the seller you ask, that referral question can take many different forms, such as:

“Ms. Client, who do you know that could use my products or services?”

“Mr. Client, who do you know that I should be talking to?”

“Mr. Client, who else do you know that I could help?”

“Ms. Client, if you happen to run across anyone else that I might be able to help, would you give them one of my cards?”

But no matter the specific language of the question we’ve been taught to ask, almost all of them have the same root problem that results in our receiving few high quality referrals: all of the questions most of us have been taught to ask require our client to do our work for us.

In virtually every case we are asking our client to come up with the name of someone they know who they believe could use our services—even though our client really doesn’t know who is a really strong prospect for us; even though our client doesn’t know all of our capabilities; and we’ve put them on the spot asking them to come up with a great referral for us with only a few seconds to think about it.

Not surprisingly most of the “referrals” we get—usually nothing more than the name and phone number—prove to be no more qualified than if we had thrown darts at the phonebook and are, thus, nothing more than time wasters.  Certainly one here and there turns into a client—but for most of us the pickings are pretty slim.

So if asking your client for a referral to someone they know who might need your products or services doesn’t work very well, is it possible to get a large number of high quality referrals from clients?

Yes, absolutely it is.

But instead of asking a weak question like “who do you know that might be able to use my products or services,” it makes far more sense for us to do the hard work of finding out who our client can refer by figuring out who our client knows that we know is a great prospect for us and then asking for a direct introduction to that person.

This method demands more than simply popping off a question at the end of the sale trying to get your client to do your work, but it is powerful because:

  • You are making it so easy for your client to give a great referral that all they have to do is say “yes”
  • You have relieved your client of an uncomfortable and often unwanted burden
  • You are far more likely to get a positive response from your client because instead of asking them to rummage around their mental file cabinet trying to figure out who to refer, you’re asking for a specific and easy to fulfill action—an introduction to someone they know
  • The introduction you get will be to a quality prospect because it will be to a prospect that you pick and that you know you want to be introduced to
  • You will have a much greater chance of setting an appointment with the prospect by being personally introduced by your client than if you just get their name and phone number and call them out of the blue
  • Over time, you can get multiple high quality introductions from each client. They become a never ending source of quality referrals by simply asking for additional specific introductions as you earn them

By investing the time and effort to do the detective work necessary to discover who your client knows that you know you want to be referred to you are not only taking the burden off your client, you’re making it so easy for your client to give you a great referral that the only thing they have to do is say “yes” when you ask.

Instead of relying on your client to come up with a top referral you’re insuring that the introduction you receive is one that you want to receive.

The primary issue now becomes how to discover who your client knows that you know you want to be referred to.  That issue demands developing some detective talents such as keen observation, listening, and analytical skills—skills that will be covered in part 4 of this series on referrals.

In addition to being able to uncover great introductions that your client can give you, the question you ask naturally changes.  Instead of asking your client to come up with a name and phone number, your question will now be geared toward confirming that the client knows your intended prospect and then moves on to asking for the introduction.

Depending upon the circumstances the request could look very much like this:

You: “Don, I’ve been trying to reach Janet Smith over at XYZ Company for some time and haven’t been able to connect and it occurred to me that you might know her.  Do you know Janet?”  (Of course since you’ve done your homework you have good reason to believe he knows her.)

Client: “Sure, I know Janet. Why?”

You:  “Great.  Would you be comfortable introducing me to her?”

If you have done your job well and earned your client’s trust and respect, there is an extremely high probability your client will readily agree to introduce you to Janet.  Instead of asking your client to do your work for you all he has had to do was say “yes.”

Although this process is most easily implemented by B2B sellers, it also works well for B2C sellers in situations where the seller has the opportunity to know their client very well.

Rather than asking your client to rack their brain and do your prospecting for you—something they are ill prepared to do—take the time and put in the effort to do the work for your client and you’ll turn introductions from clients into a major source of your new business.

Referrals—rather direct introductions–can be the cornerstone of your sales business if you learn to do a little detective work and make it easy for your clients to give the great referrals you’ve always wanted.

February 21, 2013

Building Your Business on Referrals Pt. 2: Asking for Referrals is Bad Practice

OK, I know, you’ve been told your entire life as a salesperson that you have to ask for referrals and that if you don’t you’ll fail.  But if you’re like most sellers you’ve asked and on occasion get a name and phone number of someone that turns into a new client, but most of the time the names and numbers you get are about as targeted as taking a dart and throwing blindly at the phone book.

The above situation is so common that a great many sellers simply stop asking, thinking that referrals are nothing more than sales mythology, while others, thinking they are the cause of the failure to generate significant numbers of quality referrals, continue to ask with little success and a growing sense of frustration and failure.

The reality isn’t that generating quality referrals are nothing more than a myth or that the seller himself is the root cause of referral generation failure.

Referral generation fails primarily because of the way most sellers have been taught to seek referrals.  The seller isn’t the problem; the strategy they’ve been taught is at fault.

How have most of us been taught to get referrals? 

For the most part out referral training consists of nothing more than “do a good job for your client and ask for referrals with a question such as, ‘Mr. Prospect, do you know anyone else who I might be able to help as I’ve helped you,’ or ‘Ms. Prospect, do you know of anyone who might benefit from my products or services?’

Certainly on occasion the training may be a bit more in-depth—one trainer might encourage sellers to ask the question early in the sale while another stresses the need to ask only after the sale has been completed, or one trainer might use slightly different phraseology or might encourage the seller to ask for a specific number of referrals, but the essence of the training is the same—do a good job and ask for referrals.

The problem is the process taught causes more problems than it solves.

First, the good news—the traditional referral training solves a major problem—it encourages the seller to seek referrals.  Although the success ratio is typically very low, it does produce the occasional prospect that turns into a client. 

Now the bad news—it fritters away one of the most valuable business generation resources a seller has—the potential quality referrals from a satisfied client.

Let’s take a look at the primary problems the traditional referral “method” creates:

  • The Referral Question Comes Out of the Blue:  Most clients are not comfortable when put on the spot to give referrals.  When we ask for a referral we may be thinking that we’re asking a small favor but most clients take the request far more seriously.  When a client gives a referral they believe they are putting their reputation on the line, something most don’t do lightly.  Clients need time to become comfortable with the idea of giving referrals.  If we really want quality referrals, we have to allow our client the time to become comfortable with the idea of giving us referrals before we ask.
  • We Don’t Give Our Client the Opportunity to Give Quality Referrals:  When we follow the traditional training of “do a good job and ask for referrals” we literally stand in front of our client (or are holding on the phone) expecting them to pop off the names of great prospects for us.  We are asking them to go through their mental file cabinet and come up with great referrals in the course of 10 or 15 seconds.  That is simply an unrealistic expectation on our part and we usually get what we deserve when we put a client in that position—little to nothing of value.
  • Our Client Doesn’t Know Who a Great Prospect for Us Is:  Not only do we expect our client to be able to give great referrals just off the top of their head, we expect them to know exactly who we can help when much of the time our client hasn’t had the opportunity to fully appreciate what we’ve done for them, much less know what all of our capabilities are and who is really a top prospect for us.  We’re asking our client to do the impossible—know our business as well as we know it.
  • It Ignores Human Nature:  The traditional referral request is one-sided and offers the client no reason to give referrals.  There are, obviously, clients who will give referrals even when there is nothing in it for them, but human nature being what it is, the referral request can be far more successful if it can be shown that it benefits the client as well as the seller.
  • It Makes the Client do the Work:  Rather than making it easy for our clients to give us great referrals, we make it as difficult as possible by asking them to do something they are ill prepared–and often not inclined–to do.  Giving high quality referrals should be so easy for our client that literally all they have to do is say “yes.”

Although referral generation as traditionally taught is laden with self-defeating issues, referral generation when practiced properly can be a highly successful business generation tool—one that can literally be the cornerstone of a successful business.

February 19, 2013

Building Your Business on Referrals Part 1: Understanding the 4 Pillars of a Successful Referral

At first glance, a referral is a pretty simple thing.  For most sellers, managers, and trainers, a referral is just a name and phone number that a client has given once the seller has completed the sale, has done a good job for the client, and then asks a general question such as, “do you know of anyone else that I might be able to help?,” or, “do you know of anyone else that might benefit from my products and services?”.

Once a seller has received a referral, contacting the referred party is just as simple.  The seller will call the referred party mentioning to him or her that the client, which the prospect knows, referred the seller to them, or on occasion they will ask the client to write a referral letter to the prospect and then the seller will call the prospect after they have received the letter.  A very simple, straightforward process.

Unfortunately, this “do a good job and ask for a referral” process is totally and completely wrong, and has been proven by millions of sellers to not work worth a darn.  Nevertheless, this is what is taught in almost every sales course that mentions referrals.  And not only is it a waste of time and effort, it deceives the seller who don’t succeed when using it into believing that the fault lies with him or her, not with a “system” that doesn’t work.

Generating a large number of high quality referrals requires far more than “doing a good job and asking for a referral.”

If you want to generate a large number of high quality referrals from your clients, you must understand what creates a quality referral.

A high quality referral is built on a foundation that has four solid pillars—and as the seller; you have control over three of them:

  1. Your relationship with your client:  Most clients don’t give referrals because they like you or even because you did a good job.  Certainly there are a few clients that will give referrals at the drop of a hat, but most clients hate to give referrals and unless they have a deep trust that you will not embarrass them and that you’ll deal honestly and competently with the prospect they refer, they won’t be willing to give quality referrals.Most clients believe that when they give a referral they’re not just suggesting that someone they know speak to the person they are referring, they believe that they are endorsing the seller, in essence telling the person they refer to the seller that they don’t need to do any research because the referrer has already done it and this person they’re referring is the best choice.  To get clients to take this step doesn’t come without having built a strong bond of trust.
  2. Your client’s purchasing experience: Discover what your client’s purchasing expectations and priorities are, then meet and, hopefully, exceed them.Few sellers ever exceed their client’s expectations because even though they think they know what the client’s expectations are, they never really try to find out, they never ask.  You cannot afford to guess or “think” you know what your client’s expectations are–you must know exactly, and you can only do that by discussing them with your client and then making sure you meet or exceed them–nothing less will do.If you don’t specifically ask your client what their expectations are, the best you can do is meet or exceed what you think your client’s expectations should be.Clients assume that anyone they refer you to will have a similar or WORSE purchasing experience than they had.  The further away from their desired purchasing experience they have, the less likely they will be to give a quality referral.
  3. The relationship between your client and the prospect:  This is the one pillar you have no control over.  Clients will refer you to people they have very strong, positive relationships with–and people they have very negative relationships with.  If the prospect trusts and respects your client, some of that trust and respect will be automatically imbued to you and you start your relationship with them from a position of strength.  On the other hand, if the prospect distrusts or doesn’t respect your client, some of that distrust or disrespect will also be imbued to you and you will start your relationship with them from a position of weakness.  Your job is to find out exactly what the relationship between client and prospect is and then plan you introduction approach to them accordingly.
  4. Your initial contact with the prospect:  To this point you’ve invested a great deal time and effort in establishing your relationship with your client, making sure they have exactly the purchasing experience they want, and finding out what the relationship is between your client and the prospect they are referring.  After investing so much time and attention to get this far, the last thing you want is just a name and phone number.  Instead of getting a traditional “referral” consisting of the name and phone number of the prospect and permission to use your client’s name, get a direct introduction from your client to the prospect.There are three primary methods of getting a direct introduction:

    Letter of introduction from your client to the prospect:  Ask your client to write a letter introducing you to the prospect.  However, once you’ve asked your client to write the letter, let them know that you know how busy they are and then offer to take the burden off of them by writing the letter for their signature.  If you allow them to write the letter it won’t communicate a reason for the prospect to meet with you and it will be written on their schedule—which could be never.The letter you write should give a brief overview of what you’ve done for your client and why the client believes it would be beneficial for the prospect to meet with you, as well as the time and date to expect a call from you.  Have your client sign it. Phone the prospect at the exact time your client indicated you’d be calling.

    Introductory phone call from your client to the prospect:  An even stronger introduction is a phone call from your client to the prospect to introduce you.  This method puts additional pressure on the prospect to agree to set an appointment with you as it is difficult for the prospect to say “no” to your meeting request when they know that their friend, co-worker, or associate is standing next to you when you ask.The downside to a phone call is it gives the prospect the opportunity to ask questions of your client. If there were aspects to the sale that didn’t go well there is a good chance they will surface during the phone call.

    Lunch meeting with your client, the prospect, and yourself:  A tremendously strong introduction method.  Have your client invite the prospect to lunch or coffee with the three of you. Encourage your client to let the prospect know this is NOT a sales meeting, just an opportunity for the two of you to meet one another.

    One of the strange things that often happens during the meeting is the client ends up being your salesperson and you are there simply as the consultant.  And, again, it is very difficult for the prospect to say “no” when you request a meeting.

As seen above, you have control of the majority of the pillars upon which a referral is based.  If any of the above is weak, your likelihood of generating quality referrals will decline and the weakness must be made up elsewhere.  In actuality, if one of the first two segments is weak, you will not be getting quality referrals–period.  However, you can mitigate the third one by using a strong method of introduction.

Generating a large number of quality sales isn’t done by chance or luck, and neither is generating a large number of high quality referrals.   Just as you need a well thought out process to consistently sell, you need a well thought out process to generate quality referrals.  You can significantly increase the volume and the success of your referrals if you understand the dynamics that generate quality referrals and then control those dynamics.

December 27, 2012

Make It Easy for Your Client to Give You Top Quality Referrals

Are you finding that you’re just not getting the number of quality referrals you want from your clients? Chances are you said yes because that’s the case with most sellers. Oh, sure, we all have some clients that will give us referrals all day long. Just ask and they’ll give you name after name. Other clients, the majority, aren’t nearly as generous with their referrals.

The biggest problem in both cases is so often the referral we get isn’t much better than pointing at a name in the phonebook at random.

How can you guarantee that you get great referrals? Simple. Make sure the client gives you a great referral by finding the referral for them to give you, rather than relying on them coming up with a quality referral to give.

The reality is that clients really don’t know who we’re looking for and most of them just don’t have a real incentive to invest the time and energy to come up with a great referral for us.

But we know who is a great referral for us. And certainly we’re willing to invest the time and energy to find a great referral (if we’re not, we have some real serious issues to deal with).

Since we’re the one with the need; and we’re the one with the desire; and we’re the one who knows who makes a good referral for us, why would we rely on anyone else other than our self to come up with the referral?

So how can we come up with the referral for our client to give us?

Here are three steps to guaranteeing you get great referrals from your clients:

  1. Get Your Client On-board to Give Referrals. Most sellers wait until after the sale has been completed before they bring up the idea of referrals. Bad idea.

    Most clients need time to get comfortable with the idea of giving referrals, so bring up referrals early in the relationship. Don’t ask for referrals; just let your client know that your business is built on referrals and then drop referral seeds as the sale progresses. Since your prospects and clients aren’t stupid, if they hear you mention referrals often in a casual manner, they’ll get the impression referrals are important to you and they will be expecting you to ask for them at some point.

  2. Find Out Who Your Client Knows. We’ve already established that in order to get great referrals you have to do the work for your client, so do it by discovering during the course of the relationship who they know that you know you want to be referred to.

    How do you find out? Through small-talk (who do they mention in conversation they know); paying attention to what’s in their environment (pictures, association directories, membership plaques, and such); their background (where did they work previously); their work (what vendors and suppliers do they interact with). Your job is to be a detective and to uncover the relationships they have with people or companies that you know you want to be referred to. The more you uncover the more quality referrals you uncover.

  3. Don’t Ask for Referrals, Ask for THE Referral. Now when it comes time to ask for referrals, you’re not going to be like every other seller and ask a weak question such as, “Donna, do you happen to know anyone else (or another company) that might be able to use my products or services (or that I can help—or any other such weak question)?”

    Instead you’re going to ask for a specific referral: “Donna, I’ve been trying to connect with David Jones for some time without success. You mentioned that you’ve worked with David for several years, would you be comfortable introducing me to him?” You know she knows David. You have reason to believe David is a good prospect for you. Don’t waste Donna’s time with that weak general referral question; ask to get connected to a person you know she knows that you know you want to connect with.

Referrals can be the foundation of your sales business if you just develop the skills necessary to be a referral-based salesperson. If Donna knows three people or companies you know you want to be referred to and you can get introductions to them from her, how much time and energy have you saved getting those three introductions through referrals instead of cold calling or sending out direct mail or hoping to bump into them at a networking event?

Forget what you’ve been taught about asking for referrals. Referral generation is a PROACTIVE process where you do the work, not your client. Your client doesn’t have the motivation, you do. They don’t have the understanding of who makes a good referral like you do. Your client doesn’t have the time to invest in figuring out a good referral like you do. It’s your business, not theirs. Make it easy to give quality referrals—you’ll get a ton of them if you do.

July 11, 2012

The Key to Generating Business Changing Referrals

Filed under: Referral Selling,sales,small business — Paul McCord @ 10:36 am
Tags: , , ,

Most sellers want referrals.  Almost all sales trainers preach the need to generate ’em, usually by saying something like, “all of my clients give me four or five great referrals to their friends and family, while I’m filling out the paperwork, just write down the names and phone numbers of four or five people who might need my services,” or, “by the way, do you know of anyone else who might need my service?” or the equally vapid, “who else do you know that I can help as I’ve helped you?”

Most salespeople learn very quickly that these approaches don’t work well.  Sure, a salesperson might get an occasional name and phone number, but usually they aren’t much better than taking out the phonebook and pointing at names at random.

There are several reasons these approaches don’t really work such as not defining for the client what a good referral is, not giving the client time to get comfortable with the idea of giving referrals, and not giving the client a reason why they should give referrals.  In order to get a large number of high quality referrals, you must address and overcome each of these issues. 

But one of the major reasons clients don’t give lots of quality referrals is that they don’t know whom to refer.  They just don’t know enough about your business to give you really good referrals.  They really don’t know what you’re looking for-even after you define who a quality referral is.  Besides, they have enough to think about, they don’t need to be doing your job for you.  It isn’t their responsibility to do your prospecting for you–it’s yours.

Does that mean you can’t get great referrals?

No, not at all.

It does mean, however, that you can’t rely on your client doing your job. 

It means that you must do the work for your client and make giving you great referrals so easy for them that all they have to do is say “yes.”

So, how do you get referrals from clients without them having to do the work?  Simple.  You do some detective work to figure out who your client knows that you know you want to be referred to. 

OK, it isn’t simple. 

It takes work on your part–real detective work.  But it’s your business, not theirs.  You have to take responsibility for building your business, not pass it off to your clients.

Being a referral detective means you have to listen to your client. 

You have to ask the right questions. 

You have to observe his or her surroundings. 

You have to be alert to discover who you have reason to believe they know that you know would be a good prospect for you.

Most often you’ll uncover referral opportunities through casual conversations with your client and observing their office or home surroundings. 

A few examples:

  • If you’re speaking with the VP of Finance for XYZ Company, during your rapport building, casually asking them whom they worked for prior to joining XYZ will reveal a potential referral. 
  • If your client is purchasing a car, asking who’s next in their family to purchase a vehicle may reveal a referral
  • If your client has a plaque from the local chamber of commerce for his work as one of last year’s directors, whom in the chamber do you know you’d like to be referred to?
  • If your client is a purchasing agent for ABC Company, what companies do they purchase from that you’d like to be referred to? 

Instead of asking your client a general question that he or she may easily answer in the negative, ask your client if they would refer you to the person or company you’ve uncovered from your detective work. 

Your conversation might go something like this:

YOU: “John, I’ve been trying to connect with Joe Blow over at ABC Company for some time and just haven’t made contact.  I noticed that he’s one of your customers and wondered if you’d be comfortable introducing me to him.  Would you be comfortable doing that?”

 If you’ve done a great job and you’ve uncovered someone they know, they will say yes.

Or you might say something like:

YOU: “John, I’ve been trying to connect with Joe Blow over at.ABC Company for some time and just haven’t made contact.  It dawned on me that you might know him.  Do you know Joe?”

CLIENT (if you’ve done your detective work well): “Sure, I know him, why?”

YOU: “Well, I was wondering if you’d be comfortable introducing me to him.  Would you be comfortable doing that?”

Again, if you’ve done your job well your client will be happy to agree to make the introduction.

Yes, this isn’t as easy as asking the typical ‘referral’ question; but are you looking to build your business or just slide through doing as little as possible? If you’re serious about building your business, take responsibility for its success and do the work for your client.  You’ll get a lot more referrals-and lot better referrals-for your effort.
Connect with me on Twitter: @paul_mccord

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June 11, 2011

Understand the Four Pillars of a Referral and You’ll Get More and Better Referrals

At first glance, a referral is a pretty simple thing.  For most salespeople, managers, and trainers, a referral is just a name and phone number that a client has given the salesperson once the salesperson has completed the sale and has done a good job for the client.

Once a salesperson has received a referral, contacting the referred party is just as simple.  The salesperson either will call the referred party mentioning to him or her that the client, which they know, referred the salesperson to them, or will ask the client to write a referral letter to the prospect and then the salesperson will call the prospect after they have received the letter.  A very simple, straightforward process.

Unfortunately, this process is totally and completely wrong, and has been proven by millions of salespeople to not work worth a darn. Nevertheless, this is what is taught in almost every sales course in the world.  And not only is it a waste of time and effort, it deceives the salespeople who don’t succeed with it into believing that the fault lies with them, not with a “system” that doesn’t work.

Generating a large number of high quality referrals requires far more than “doing a good job and asking for referrals.”  It requires a systematic process of planting referral seeds, watering them at every chance, weeding out problems and issues, and then reaping the rewards. 

If you want to generate a large number of high quality referrals from your clients, you must understand what a referral is based on.

A Referral is Based on a Foundation with Four Pillars-and you can control 3 of them:

The relationship between you and your client:  you can control this pillar of the foundation.  By instituting the full client relationship building process in detailed in Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals (John Wiley and Sons, 2007), you can create a strong relationship with your client built on mutual trust.  Clients don’t give referrals because they like you or even because you did a good job.  Clients hate to give referrals and unless they have a deep trust that you will not embarrass them and that you’ll deal honestly with the prospect they refer, they won’t be willing to give quality referrals.

Your client’s purchasing experience: you can control this pillar of the foundation.  You must discover exactly what your client’s expectations and priorities are, then meet-, and hopefully exceed them.  You cannot afford to guess or “think” you know what these are-you must know exactly and you can only do that by discussing them with your client and then making sure you meet them or exceed them-nothing less will do.

The relationship between your client and the prospect: you have no control over this pillar.  Clients will refer you to people they have very strong, positive relationships with and people they have very negative relationships with.  If the prospect trusts and respects our client, some that trust and respect will be automatically imbued to you.  On the other hand, if the prospect distrusts or doesn’t respect your client, some of that distrust or disrespect will also be imbued to you.  Your job is to find out exactly what the relationship between client and prospect is and then plan you approach accordingly.

Your initial contact with the prospect: you control this pillar also.  If you have built your relationship with the client properly, your client will be happy to contact the prospect in whatever method you desire.  As outlined in Creating a Million Dollar a Year Sales Income, there are a number of methods of contacting clients, each with their own pros and cons, depending on the strength or weakness of the client/prospect relationship.

As seen above, you have control of the majority of the pillars upon which a referral is based.  If any of the above is weak, your likelihood of generating quality referrals will decline and the weakness must be made up elsewhere.  In actuality, if one of the first two segments is weak, you will not be getting quality referrals-period.  However, you can mitigate the affects of the last two.

If the relationship between client and prospect is weak, use a stronger contact method.  Moreover, if the contact method is weak, convert the method into a stronger one.  For example, if your contact method is a phone call to a prospect who has a weak relationship with your client, try to bring in one or two other clients the prospect may know by reputation to build additional credibility.  Better yet, try to arrange a conference call between the prospect and your client.

Generating a large number of quality sales isn’t done by chance or luck, and neither is generating a large number of high quality referrals. Just as you need a well thought out process to consistently sell, you need a well thought out process to generate quality referrals.   You can significantly increase the volume and the success of your referrals if you understand the dynamics that generate quality referrals and then control those dynamics.

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