Referrals are the one lead generation technique where small businesses have the advantage over large ones. But first, let’s understand what a referral is.
A referral is a sales lead that comes from a customer. Of all lead generation methods, referrals are the most likely to result in a sale. The reason is simple. The greatest problem that every sales person faces is trust. Rightly or wrongly, most people mistrust sales people and see them as time-wasters. When you enter a sales situation with a referral, your current customer is saying to his or her colleagues that you can be trusted and won’t waste their time.
A referral also creates “social pressure” to buy. Because your customer bought from you, the prospect naturally wants to follow suit.
Ask after delivering your services, not after closing the deal.
Many sales people make the huge mistake of asking for a referral right after they’ve closed the deal. Let’s look at it this way; you’ve just asked the customer to take a risk by buying from you, why would the customer want to take another risk and refer a colleague to you? Therefore, rather than asking for the referral outright, ask for the “right to ask.” Here’s how.
When the customer agrees to buy from you, say something like: “Wonderful! Thanks for agreeing to become our customer. I have one request. I want you to think of some friends and colleagues who you think should be doing business with us – providing we are as incredible as I’ve been claiming we are. Once I proven to you, beyond all doubt, that we can deliver and delight you, I’m going ask you to contact those people to suggest they meet with me.” Then follow up. After you’re certain that you’ve wowed the customer.
Be sure to refer your customer first.
Most sales people haven’t thought of this. Well this is most applicable when dealing with another business. Because you’re in sales, you know lots of people, right? If you use those connections to bring in some extra business money for the customer you are selling to, you’ve earned the right to ask for a referral.
The great thing about this idea is that it really does put you into the “win-win” situation. More money coming into your customer means that they’ll have more money to spend.
Have your customer talk to the prospective client for you.
Once you get an agreement for your customer to give you a referral, don’t settle for contact information. While you can always say something like “Olebile told me to contact you,” such phrases are used so frequently that they’re meaningless. For all the contact knows, Olebile might have given you his name simply to get rid of you! Don’t laugh; it happens all the time!
Instead, get your customer to take a specific action that brings you together with the prospect. Rather than asking for a name and number, ask the referrer to call and explain who you are and why you are worth having a conversation with. Ask the referrer to get back to you to confirm that the call has been made.