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6 Key Tactics for Getting High-Quality Sales Referrals

Selling Skills | Prospecting

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 had already painted my address on curb a few years ago. No, Steve was looking for referrals.

Steve 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. Moreover, 92% of people trust referrals from people they know.

In the absence of the referral, you are a stranger to that prospect, they have no basis for trusting you. Think about Steve the painter: without a referral, he just some strange guy at your front door holding a paint brush.

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 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 referrals – he knows it’s the fastest way to close business.

So how can you leverage the power of referrals?  Like Steve the painter, start by focusing on your current customers.

 

Who to Ask

A critical element of getting a referral is the strength of the relationship between you and the one giving the referral.  The strength of the referral is proportionate to the strength of your relationship with the one giving the referral. 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?  Consider conducting an audit of your current customers by assessing your relationship 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 relationship scores are excellent candidates to ask for referrals.

 

How to Ask

Salespeople are often uncomfortable asking for referrals because they don’t know how. Some ask too early in the relationship when the odds of getting a referral are low—and others don’t ask for referrals because they are afraid of rejection.

Here are a six key tactics to help you ask for referrals:

  1. Timing. The best time to ask for a referral is after the customer has benefited from your product/service. A great cue is after a customer gives you a compliment.
  2. Ask for help. People want to be helpful if they are able. “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 makes it easy to say no. Be specific with your request. Based on your criteria of your target customer, prepare a short description of the type of referral you want. This makes it easier for the customer to help you.
  4. Use LinkedIn. Research who your customer knows. “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 customer’s name. “Jim said I should call you…” Or, Susan uses our services and thought you might be interested in hearing about how they have helped her…” Better yet, if your relationship score is extremely high, ask the customer to make the initial introduction.
  6. Say thank you. Thank the customer for giving you the referral and keep them updated on your progress. Send a thank you note or gift card. Nurture your best referral givers. If someone is sending you business, reciprocate.

One note of caution: you will often get the appointment with the referred person because of their relationship with the referrer, but that doesn’t mean they have any intention of buying anything. So, you must still carefully qualify these opportunities.

Asking for referrals is one of the simplest ways you can generate new business. Ask Steve the painter. After speaking with me, I later referred him on my neighborhood user group recommending Steve, resulting in two new customers for Steve.

 

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About David Jacoby

As a Managing Director at Sales Readiness Group, David helps large B2B sales organizations improve sales performance. Previously, David was a Principal at Linear Partners, a sales consulting firm providing sales strategy, sales operations, talent management, and interim management services to emerging growth companies. In the past, David has served as Vice President of Business Affairs of Xylo, Inc., where he was responsible for the Company's business development, sales operations, legal affairs, and financing activities.