The Key To Unlocking The Power Of Referrals In Business

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The Key To Unlocking The Power Of Referrals

The Key To Unlocking the Power of Referrals

Today’s Sales Insight post looks at how to unlock the power of referrals, one of the keys to driving sales revenue.

We all know the positive impact that referrals can have on our ability to close more deals, and there are many statistics to reinforce their importance in our sales prospecting activity. A New York Times survey suggests for example that 65% of new business comes from referrals, and Nielsen did a study that stated people are 400% more likely to buy from a friend’s referral. Dale Carnegie also said that 91% of satisfied customers are willing to refer.

The mistakes sales people make when it comes to referrals

So we know the power of referrals and yet there are three mistakes that we typically find sales people make:

  1. They’re too afraid to ask 
  2. They ask at the wrong time 
  3. They forget to ask 

My first piece of advice is, just do it. We all feel some discomfort in asking people to refer us to friends and colleagues, but the benefits of doing so should far outweigh this.

The point at which you ask for a referral makes a big difference

If we think of a typical buying cycle – a customer decides they want to buy something, they consider their options, they think about the impact of those options on their personal or business circumstances. They will then make their decision based on these factors and implement or process this buying decision.

The typical point sales people plan to ask for an referral is once the customer has actually experienced the service or the product that they are purchasing, ie. at the end of this cycle. However, this is too late in the process and often gets forgotten by both parties.

Ask for referrals earlier in the sales process

What I suggest is, ask for your referrals early on. Ask upfront at the very start of the sales process, I dare you. It may seem counter-intuitive to ask before a customer has experienced our service or product, but actually our findings and research supports the idea that the ‘thing’ being referred is not typically the product of service, it’s you – the sales person who is part of the process.

The customer or the prospect can get a sense and a flavour of you through your sales conversation whether they choose to buy or not. So, ask right at the start; you don’t need to ask for the actual referral straight away but just make sure you’re teeing up the idea that at the end of this process you will be asking. What this will do is remind you and the customer that it’s coming.

Ensure referrals are never overlooked

The third mistake is having no systematic process for asking for referrals. Build referral requests into all aspects of your sales process and also your service interactions with customers after they’ve bought your product or service. Make it a natural part of what you do and you’ll start to see your referrals increase. Use my REFER acronym to help you remember to make this a systematic part of your business:

Remember – Remember this, people want to refer! You will have done it yourself; people like to help people.

Explain – If 65% of new products are sold through referrals than most business comes from word of mouth or someone referring you in some way. So tell customers this is how you do business.

Feature – Feature it early in the conversation as suggested, don’t wait until the end of the sales process when both parties have forgotten.

Elicit – Don’t stop at one referral, people will be willing to give you more and more based on how you interact and the value and trust that they have in you.

Reciprocate – Find a way to reciprocate in any kind of way. The key here is to try and make it unexpected and bespoke because that increases the impact of the reciprocation.

I’d really love you to grab a piece of paper and develop a list of referral contacts that you could proactively speak to and ask for referrals right now. By the way, these don’t have to be people that you haven’t dealt with yet, they could be people you’ve spoken with for years or who have bought something off you in the past but were never asked for a referral. Go back to them and say ‘I can’t believe I never asked you this, is there anyone else that you would recommend to me as having value and having a conversation with me about the kind of things we do…’

If you’d like to chat a little bit more about how you can make referrals a systematic part of your sales process, please contact me steve@salestrong.co.uk.

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