Referrals!! Just the word itself ignites excitement and a winning mentality for the sales professional and business owner because of the following reasons:

1.         Higher conversion rates = Success and company growth/profit

2.         Lower cost per lead and per sale = Better RIO/higher profit

3.         Shorter sales cycle = Quicker wins

4.         Fewer objections and fewer touchpoints = Improved sales efficiency

5.         Higher sales value = Higher commission and company profit

6.         Better client retention = Company sustainability & long-term growth

7.         Positive brand awareness = Long term success

8.         Creates a confident and successful sales team = a winning culture

9.         Referrals create more referrals = all of the above

Some interesting and amazing statistics around referral selling

•         92% of buyers trust referrals they know (source Nielson)

•         91% of customers said they would give a referral if asked, but only 11% of sales professionals ask! (source Dale Carnegie

•         The lifetime value of a referral client is 16% higher than a non- referred client (source Wharton School of Business)

•         Non-cash incentives are 24% more successful in boosting performance than cash incentives (source The University Of Chicago)

•         84% of buyers now kick off their buying process with a referral (source Harvard Business Review)

•         It takes on average eight touch points to get a meeting compared to 1-2 for a referral meeting

So, if the referral channel is such an AMAZING channel, why is it that even your top performing sales professionals are not leveraging it? A statistic that is not shown above is that less than half of the high performers will be focusing on referrals, and as for the underperforming sales reps, it is even more dismal at around 25%

Reasons why your sales professionals might be failing at referral selling?

Positioning

By this, I mean that sales professionals need to stop positioning it as a referral for the business they represent and start positioning it as an introduction to them personally.

E.g. “Mr Customer, did you gain value from accepting this meeting with me today?”

If you have done your job correctly, there will be a resounding

“YES absolutely Rachel I have gained and learned a lot from our meeting today, thank you!”

“That’s terrific feedback as I know that your time is precious. My goal, when meeting with any business owner such as yourself, is always to provide value and a consultative approach regardless of the outcome. Saying that and seeing that you understand this who else do you know that you could introduce me to that would benefit as you have from a consultation?

Here is the point with this question. Firstly, people buy off people; if you have gained their trust and shown actual value, they will want to help you.  From my own experience with just this small shift in positioning, you will be opening up your network for you can now ask prospects at point of sale and it completely eradicates the common objection of “oh I am sorry, but until I have experienced your product I am not comfortable doing this” for they are not introducing the business but in fact the sales professional!

This is a crucial advantage for the new sales professional who may not have a client base as yet or for the sales professional who has a role where they pass over the client after the sale to an account manager (who is then tasked to focus on referrals!)

Lack of confidence in their ability

Training and development is needed here. It is also about the sales professional taking accountability with consistent activity and asking the questing as practice indeed makes perfect for any skill you are trying to master.

Lack of confidence in the company they represent

A very concerning factor and it comes down to either finding out what it is they are not confident in and showing them a way to overcome this belief. Or, it could come down to the fact that they are representing the wrong company if values and behaviours are not in line with their own. If this is the case, they should not be working in your company, and it might be time for them to move on (a decision they hopefully make on their own accord if they are an authentic seller!).

Laziness and complacency

If a company is providing a sales professional with warm or hot leads, they can be too well fed and not care or bother to focus on this channel. In their mind, they are doing a great job exceeding KPIs and are just too busy being great at what they do! So, here is a controversial statement; it is not so great!  My opinion of this is they are letting the business down who is supporting them. In fact, in more ways than an underperforming rep who may lack the skills or not get the support via the amount of hot or warm leads that they do. All sales professionals have a responsibility to replace their sales with new opportunities. If they are at peak performance, then they should not find asking for a referral hard if they bothered to ask the question correctly and consistently. Keep everyone accountable regardless if they are meeting KPIs or not.

Fear of rejection

Let’s face it no one likes to be rejected and asking for a referral is putting yourself out there knowing that you may get knocked back with a No sorry! Again, this is about training and coaching your people to understand that a no is just a no and not to take it personally. Sometimes you can overcome it (objection handling and an article in the wings here folks!) but sometimes you just can’t. Sales is about resilience and knowing that for every no, there is a yes if you just keep ASKING. The sales professionals who ASK more will always gain more it as simple as that!

Timing and educating the client

When it comes to asking for an introduction, it is all about timing. You need to gain trust and earn the right to ask, so making sure you position it correctly is critical. Part of this process is setting it up. What I mean by that is during your discovery questions make sure you discuss the referral channel with your prospect/soon to be a client and gain understanding and agreement on what a warm introduction in business means to them. Also, remember that your prospect/client is quite probably not a sales expert so you may need to help them by asking questions early on around their network, i.e. who their suppliers are, what networks they belong to, family and friend connections etc. HOT TIP check their website before the meeting as it may just show projects, i.e. clients they have worked with or business or partners they are connected to. Again, this eradicates the common objection “ I don’t know anyone” and the more sophisticated sale professional could even pre-empt it by asking them directly for an introduction to a connection they already know they are associated with in some way because they have done their pre-meeting research!

Low activity in networking and partner opportunities

A long-term strategy which requires a consistent approach around creating relationships that are built on trust, experience, and mutual reciprocation. Many sales professionals fail to receive referrals in this space because they dedicate little or no time and when they do make the effort they make it all about themselves instead of looking at it as a winning partnership.

Referral Process

Once the sales professional has attained a warm introduction or two they need to show their appreciation with a thank you. Next, they need to ensure that there is a mutual agreement on the method of referral ie will it be via phone, email, face to face and in what time frame will this happen. Follow up is key!

I hope this article has shed some light around the skill of referral selling and I would love to hear your thoughts and strategies for success.

And as Jim Ryon said……

Motivation is what gets you started. Habit is what keeps you going.