New Leads Wanted! The Key to Referral Success
January is already halfway over. Whoosh! If this trend continues, 2016 will be gone before we know it. Are you ready to make this a great sales year, no matter how fast it speeds by? Whether or not you rank your sales performance last year as successful or sorry, you can do this one thing to increase your chances of higher sales this year: Generate new leads.
Last week, we discussed how to effectively analyze your pipeline and remedy some common issues. Leads are where sales start, right? So generating new leads is a necessity. And one very effective way to generate more leads is to use a referral strategy.
A referral strategy is a powerful tool
Referrals offer sales reps a multitude of advantages: You can get your foot in the door more easily (and you know the saying about a warm lead versus a cold call!). You can gain immense credibility depending on your reference. And you will gain the prospect’s trust faster, because some level of trust is already established.
Purposefully going after referral sales can help you get ahead of the competition and keep your pipeline looking healthy—particularly when it’s a B2B referral program. According to B2B News Network, 82% of sales leaders say referrals are the key to sales success, and 78% of marketers surveyed said that referrals have a higher conversion rate compared to any other type of lead.
In fact, when referral tools are used strategically, they are three times more likely to accelerate referral generation and conversion.
How to start building referral sales
So what can you do to start building referral sales? Be strategic about it, and be comprehensive about it. Don’t just pick up the phone and start asking clients for names. If you’re a sales rep, make this whole way of thinking part of the way you do business! Continually build a foundation of trust and quality in your client base so they will want to pass along referrals. If you’re a sales manager, enact a referral sales program at your company with this same mindset.
Timing the ask
One key point to learn and remember is when to ask for a referral, because timing is everything. The right time to ask for a referral isn’t after you close, but after you deliver. You don’t want to ask your customer to take another risk as soon as they’ve decided to take a risk on you by buying from you. Asking too soon, before a relationship is built, can be detrimental to your referral success. It puts your new client in an awkward position, because they don’t even know if you can deliver quality yet. That means they don’t know yet that you are referral worthy! Ask too soon in the relationship, and you could ruin your chances of getting a referral in the future.
Planting the seed
Here’s some other sound advice for those sales reps looking for a referral strategy: “Rather than asking for the referral outright, ask for the right to ask.” In other words, plant the idea in your customer’s head. Let them know that this is something you’d like to pursue, but only after you’ve delivered a quality product. This gives them a chance to observe your follow through with some objectivity and to carefully think about a relevant referral. Plus it lets them know that you will be asking for their opinion on your performance, in a way.
This also gives you time to ensure that they are happy and satisfied with your work before you start asking for a referral. If you go about it right, this whole “preparing to ask for a referral” becomes about your relationship with your existing client which is just good sales anyway. When you make this relationship mutually beneficial by helping them solve their problems, they will want to help you grow your client base in return. Once a strong foundation of trust is built, you can begin asking for referrals.
Not everyone says “yes,” and that’s okay
When building a referral sales program, remember that not everyone is right for you and that there will be people who say “no.” Don’t let this hindrance prevent you from asking for referrals from other clients. Just like in sales itself, every “no” gets you closer to a “yes.” In this case, every “no” gets you closer to a referral. And wouldn’t you rather have quality than quantity when it comes to referrals anyway?
It could be too that the timing is not yet right. Perhaps the client doesn’t know enough yet about your skill set or capabilities. You have a little more proving to do, that’s all. Or it could be that they simply don’t know of anyone at the time to refer you too.
Getting referrals from referrals
Also keep in mind that a referral is a potential referral source. It could be that your solution is not needed at this time but they know someone else who is actively looking. That’s why referrals must be treated with the same courtesy and respect as your clients…because they might have the name of your next big client in their Contacts!
Having a referral mindset from the top down
This referral strategy should come from everyone in your organization, and especially from the CEO. The reason why a CEO should lead your referral sales program is because “sales responsibility starts at the top.” However, even if such a referral sales program isn’t set up in your organization, it doesn’t mean that you can’t start your own! And that starts with being a trustworthy solution provider when you do close a sale.
Lastly, referrals can help to grow your network and expand your influence to individuals who you might have never gotten in contact with otherwise. In addition, they will be better quality leads. According to B2B News Network, referrals have a higher conversion rate, the sales close faster and referral customers have a higher lifetime value…all of which makes sense because a referral is going to have some level of trust with you right from the very start since someone thought enough of you to refer you, right?
Pursuing referral sales is not easy because you have to invest time in your existing clients and earn their trust before you can even start asking. But isn’t that going to benefit you as a sales rep too? Clients who trust you enough to give you someone’s name are clients who are more likely to stick around and stay loyal to you. So in a way, you’re building your sales and your network at the same time as you cultivate relationships that lead to other relationships as part of your referral strategy.
Sounds like a good start to 2016!