Sales Laundry

Archive for April 5th, 2009

Looking around these days it appears we could all do with more sales.  Sales experts have, since time began I guess, been telling the great sales unwashed that the best and easiest source of new sales are referrals from existing happy customers.  So why aren’t we all out there asking and working referrals on a consistent basis?

 According to a statistic I have seen plastered all over the Internet, but never sourced, 15% of sales professionals do ask for referrals on a consistent basis.  I assume there is a measure of truth to that statistic as it fits my anecdotal sales coaching experience.  So why would an estimated 85% of all sales people prefer cold calling among other methods to collecting referrals as a means of finding new opportunities?

 Because done poorly, through a lack of training or otherwise, the referral collecting process can damage our valuable hard won personal relationships.  Rather than risk doing more harm than good, most choose to do nothing.

 I think we can do better.  Here are some strategies, both relationship and transaction driven, to help you become part of the enlightened 15% that have referral based selling figured out.

Relationship based strategy:

Strategy 1: Ask a better question.  Instead of asking “Who do you know that could benefit from my product or services?” I would ask a more targeted to my profession.  “Can you think of anyone that is having difficulty hitting their sales numbers” or “…anyone struggling to get their new business off the ground?”

With the first question, you are asking your client to understand the problem your business solves and apply that to the lives of the people they know.  It is much simpler to just present the problem you solve and let them figure out who might be a fit.

When you do get a name, follow up with “What made you think of that person?”  This will give you an understanding of your clients thought process and give you something to work with when you do engage the prospect.

Ask your customer to make an introduction for you.  Ideally this would happen face to face, perhaps over lunch, but a three-way call, or an email between all parties could work in less than ideal situations.

Every few months ask your customer base a new question and begin the referral generation process all over again.

Strategy 2:  Tell a story.  More specifically, tell one of your success stories that involves the kind of referral client you are looking for and how you were able to help them.  It does not need to be long, just where the client was, where they wanted to be and how you helped get them there.  After you finish relating the story, ask them if they have ever seen a situation like that or know anyone in that situation now.  Asking this way changes the conversation in the head of the person you are talking to.  Instead of asking them to sacrifice one of their friends who may or may not need your services you are asking them to play a game of Classic Concentration in their head and match someone they know to the character in the story.  If they can make that match, their is a greater likelihood they will tell you because you have helped them identify a solution to a specific problem one of their friends has.   

Strategy 3:  Find vendors with complimentary products and establish a referral system with them doing reciprocal work.  Think auto parts and car washes, software and hardware vendors, advertising agencies and production studios, insurance agents and clinics/body shops for instance.

 Strategy 4:  Work with the people you know and depend on like barbers, waitresses, dry cleaners, your coffee shop guy, your realtor, or your insurance agent and where appropriate leave them with a stack of your business cards if a referral opportunity presents itself and do the same for them.

Transactional based strategy:

Strategy 4:  Build a repeatable transaction driven referral process.

Every time you engage a client in a meaningful way give them an opportunity to refer a friend and a reward them for helping you win a new client.

When you send out an invoice, drop in a flyer for your referral program detailing the reward for giving you a new prospect.  Technicians can leave a flyer when they complete their onsite work.  Promotional letters could be packed with shipments.     

Obviously, in your industry, mileage may vary.

The objective is to build a system that provides your business with a steady stream of referrals by consistently making your customers aware of your search for new customers and rewarding those who choose to help you identify and land new business.       

Strategy 5:  http://uRefer.com.  Pay to use a referral system someone else has already built like uRefer that just bolts onto your existing web infrastructure.  For the record I have never used uRefer, nor do I have any incentive for recommending them over any other company.

 I, myself, have ignored the “benefits” of having a formal referral program in place over the years because I did not honestly see a need based on the numbers we were turning.  In light of where we are today that seems careless and more than a little silly.

 If you told me today that a successful referral program could potentially bump my top line revenue 10-20%, again, mileage may vary, I would make that an immediate priority.

Thank you for taking the time to read this article.  Please spend another two minutes on this 5 question survey.  I would appreciate your feedback as it will shape some future posts.

Want to see how the Guinness Book best car salesman in the world used referrals? 

Image courtesy of http://trismartcoaching.com