Last weekend a strange man knocked at my front door. It turns out it was a painter named Steve with a unique specialty: painting your home address on the curb in front of your house. Steve wasn’t looking for my business...
In fact, he reminded me, he'd already painted my address on the curb a few years ago. Steve was looking for referrals and told me that his number one source of new business is referrals. In fact, a few weeks earlier, one customer recommended Steve on a local neighborhood online user group, and he could barely keep up with the business.
Why Sales Referrals Work
Sales referrals work because they help bridge the trust gap between you and the referred prospect. According to Nielsen, people are four times more likely to buy when referred by a friend. And 92% of people trust referrals from people they know.
In the absence of a referral, you're a stranger to that prospect, they have no basis for trusting you. Think about Steve the painter: without a referral, he is just some strange guy at your front door holding a paintbrush.
The benefit of a referral is that it leverages the goodwill between the referred customer and the referring person. A referred prospect already has confidence in you, your company, or your product. Thus, referred prospects will generally move through the purchase process at a faster rate than cold opportunities. That’s why Steve the painter is so keen on getting them – he knows it’s the fastest way to close business.
So how can you train your sales team to leverage this power? Like Steve the painter, start by focusing on your current customers.
Start with Your Best Customers
The first step to getting a referral is identifying your strongest relationships. That's because the referral value is proportionate to your relationship with the person giving it. If you have a strong relationship with an existing customer and they trust you, they will enthusiastically refer you.
How do you know how strong your relationship is? Do a quick audit of your current customer relationships based on the following criteria:
- Length of relationship
- Frequency of communication between you and the customer
- Speed of customer’s response to your communications
- Overall satisfaction with your product or service
Customers with high marks across these areas are excellent candidates to ask for referrals.
Follow These Steps for More Referrals
#1: Recognize the Best Timing
The ideal time to ask for a referral is after the customer has benefited from your product or service. A great cue is after a customer gives you a compliment.
#2: Ask for Help
Most people want to be helpful if they can so ask for your referral using language like: "I would really appreciate your help..."
#3: Make it Easy
Avoid using the generic; "Do you know anyone else who could use my services?" This usually results in a "no". Be more specific with your request. Use your target customer criteria to create a short description of exactly who you're looking for.
#4: Use LinkedIn
Make it even easier for your customer by researching their connections. "I noticed that you are connected to Jane Smith on LinkedIn. I think we could help Jane... Do you think you could help me with an introduction?"
#5: Link the Referral
Ask permission to use the customer's name. "Susan uses our services and thought you might be interested in hearing about how they have helped her..." Another option: "Jim said I should call you..."
#6: Say Thank You
Always thank the customer for giving you the referral and keep them updated on your progress. Send a thank-you note or a gift card to nurture your best referral givers. And, if someone is sending you business, be sure to reciprocate.
One note of caution: you will often get an appointment with the referred person because of their relationship with the referrer, but that doesn’t mean they have any intention of buying anything. You must still carefully qualify these opportunities so you are not wasting anyone's time.
In Conclusion
Asking for referrals is one of the simplest ways to generate new business. But many salespeople are uncomfortable asking for referrals because they don't know how or they're afraid of rejection.
Steve the painter is a great example of the power of referrals. After speaking with me, I later referred him to my neighborhood user group. This resulted in two new customers for Steve.
💬 Join the Conversation
What tactics have you found most effective when asking for high-quality sales referrals? Share your tips and experiences here.
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