A guest post by Joanne Black --
Every salesperson in every industry proclaims that referrals generate new business the fastest and most cost effective way. When you receive a referral introduction you:
• Arrive pre-sold-the prospect knows who you are and actually wants to meet you
• Gain trust and credibility-the most difficult thing for salespeople to garner
• Shorten your sales process-and spend more time working with great clients
• Ace out the competition-while others are still figuring out who the decision maker is
• Incur no hard costs-just a small amount of change for coffee or a meal
• Convert prospect to clients more than 50% of the time-and most likely 70 to 90%
And yet so few run a 100 percent referral-based business. Why not?
After conducting interviews with salespeople and sales executives, I discovered the four reasons holding companies back:
1. It feels uncomfortable. Referral selling is downright personal. We're asking someone to help us, and it's not easy asking for help. The biggest fear of all is that our Referral Source might say no. So, we don't ask.
2. It's a skill. Sales people don't know how to ask. Typically, a salesperson's idea of asking for a referral is to say: "By the way, if you know anyone who could benefit from my services, please pass my name along." The only thing that achieves is we can check "Ask for a referral" off our list. It gets us nowhere.
3. There haven't been metrics. Referral selling sounds like the right thing to do, but historically, there haven't been any hard numbers on the success rate of referral business. There are metrics for cold calling, direct mail, advertising, but few widely known for referrals. That's all changed: Now we have metrics! Typical referral metrics include: the number of people asked; the number of referral meetings held; the number of new customers; the amount of increased business with existing customers; and overall increases in revenue and profitability.
4. It hasn't been part of our sales process. We must work referrals every single day. It is a proactive strategy and not something we leave to "word of mouth." Word of mouth is passive, waiting for the phone to ring; referral selling is active and results-oriented.
The Power of Referrals is endless. Addressing your referral-selling hurdles is easy with the right process.
If you want to run a referral-based business, begin by examining your strategy and your process:
• Do your salespeople know the importance of referrals?
• Where in your sales process should they ask for referrals?
• What metrics can you put in place to reinforce referrals?
• How will you recognize people for their success?
It's time to move referral selling from common sense to common practice. Determine how the four excuses for not asking for referrals play out in your company. Talk to your salespeople and build a plan to shift the way you work. Drop the excuses and adopt referrals.
Joanne S. Black is America's leading authority on referral selling. A captivating speaker and innovative seminar leader, Joanne works with sales executives, business owners, and their teams to increase revenue while decreasing their cost of sales. Joanne is the author of NO MORE COLD CALLING™: The Breakthrough System That Will Leave Your Competition in the Dust from Warner Business Books. Contact Joanne at [email protected] or 415-461-8763. Visit www.NoMoreColdCalling.com. Get Joanne's Back in the Black Newsletter and receive your Referral I.Q. Quiz-your checklist to build a referral business.