Everyone talks about referrals, but few actually pursue them.
Referrals should be considered the reward for a job well done. They are the by-product of your excellent customer service.
True sales professionals have earned the right to ask for and receive referrals. If people are not asking for referrals, they are only cheating themselves.
Earning referral business is a cost-effective way to grow a business, and the best part is that all of the calls are warm leads.
There are two main types of referrals:
* Client to Client
* Client to Co-worker (in-house hand-off)
Both of these offer a plethora of untapped sales opportunities. The hardest part is actually asking for the referral. Sometimes it may seem pushy, or people may be fearful that they haven’t earned the right to ask for referrals.
The referral concept is one of those areas where people must have a game plan and well thought-out strategy. They need to think about what they are doing: they are asking someone to put his or her neck out on the line and jeopardize his or her reputation by recommending the company to another client or co-worker.
The concept of “ready, aim, fire” should not be used. People get one or maybe two chances to do this the right way, so be prepared. Most importantly, be professional.
If at all possible, it’s best to approach this topic after the client has successfully implemented the product or service. Keep in mind that the client is busy, so pursue referrals after the close of their quarter, project, or general busy time.
People need to view the referral concept as they would any other sales pitch. They are pitching the client on giving the company a referral. With this being said, sales people don't say, “Hey can you give me some referrals?”
They need to show why they've earned the right to a referral. They need to present the hard work and excellent customer service that has been given to the client. He or she should want to refer the company to others.
The overall idea is to have a review session with the client to assess their needs, if any, and then transition into the company's needs (referrals).
Start first by asking the customer for a lunch meeting or perhaps a conference call to review his or her account and get an overall status check. During this time, present the client with something tangible, such as customer service reports, product breakdowns, returns, or project deadlines. Get the client thinking, “Yes, I have been very pleased.”
If the company can’t present a favorable overview, then they most likely haven’t earned the right to ask for referrals. Make sure the client is satisfied and happy with the service. The presentation should be structured and professional. During the presentation, communicate three things to the customer:
1. The company and the client agreed upon X.
2. The company delivered X.
3. The client is happy with X.
Here is a sample dialogue:
Sales Rep: “Mrs. Customer, I wanted to take this opportunity to thank you for your business and get a feel for how things have been going over the past few months. I’ve prepared a detailed report outlining our most recent project and high points within the project. As we discussed, you wanted XYZ implementation to be up and running by XYZ date. As you can see, we came in ahead of schedule and under budget.
Also, you said it was imperative there were no glitches, and everything seems to be running smoothly, and the project was delivered without problems.
With this being said, how would you rate your overall satisfaction with our most recent project?”
Client: “We are extremely happy with the implementation and look forward to working with you in the future.”
Sales Rep: “I echo your sentiments. I do my best to deliver on expectations and provide excellent customer service. Based on my proven track record, do you feel I’ve earned the right to ask you for some referrals?”
The sales rep is not doing this for the practice! The company is here to make money! If the company has held up their end of the bargain, don’t be afraid to ask for a bigger piece of the pie. The company said they were going to do X, they did X, and the customer is happy. Clients understand that asking for referrals is part of the process.
The Two Types of Referrals
Client to Client
The client-to-client referral allows the company the leeway to take care of the personal interest of the existing customer. A client-to-client referral is typically a referral to someone outside the customer’s company—perhaps an associate in the same field but employed at different company. It is okay to offer up some sort of reward for a lucrative referral, such as a monetary amount simply paid to the client for referring new customers. Conversely, companies often can simply get the referral because the existing customer respects you and doesn’t expect anything in return.
Upon making an introduction to the new client,the company has to immediately let them know that they have a successful relationship with the mutual contact, and that based on past success, the contact suggested the company give them a call. It has to be clear that the company is calling to earn business based on a previous achievements with the mutual contact. The company is calling with the purpose of getting in the loop and earning business. They will appreciate the sales person not wasting their time with a bunch of meaningless chitchat.
Don’t show up expecting to have business handed to the company. Remember, the old client’s reputation is on the line. The company not only has to impress the new client, they have to make the old client proud and confident in his or her decision to give the referral. Be eager and confident. Be humble and honored to have the opportunity to earn the new client’s business. Be knowledgeable of his or her industry and business model. Most importantly, be professional and respectful. Don’t talk about details regarding the other client except the professional relationship that exists. Breaking the ice doesn’t mean being anything other than professional.
Once the company has established some rapport with the new client, it is up to the company to keep the relationship alive and thriving. A referral simply allows an opportunity to get a foot in the door, and the rest is up to the company. The sales person can’t expect someone to buy from the company simply because he or she met with the company. Show credibility and earn his or her trust just like with any new account.
Client to Co-worker
This isn’t too different than the client-to-client referral, but it requires a little more hand-holding. The company can’t offer up a bonus incentive because it could be a conflict of interest. The goal is to have the client champion the company into other departments of his or her company based on the added value brought to the table. Remember, if the company has been holding up their end of the bargain, the client should want to have the company working with the other departments and contacts.
Use the same concept outlined before: “Based on this proven track record, do you feel okay with me offering my services to other areas of your company?”
Lunch meetings or joint conference calls are a great way to do introductions. The company should Approach these referrals the same way they would approach the client-to-client referral. Make sure they are on the game and prepared to put the best foot forward.
Referrals don’t always have to be sales related. The concept is simply the company proving itself and earning the right to ask for something in return. The company can prove itself without the customer even making a purchase. If the company has bent over backwards to get them information and product demos, the company has still accomplished the three criteria: the company agreed on X, the company delivered X, and the client was happy with X. Even if they haven’t purchased anything from the company, they have still executed and met expectations. This can apply to anything. It shows the company is dependable.
Also, referrals don’t have to be to a new contact. The company can use the referral concept to expand offerings within the same contact. If the company has accomplished the three criteria, then they have earned the right to ask for other business from the same contact. This is a way of referring the company into net-new business with existing contacts. If the company hasn't given clients a reason to doubt the company, then why wouldn’t they give the company a shot at more of their business?
Referrals should be viewed as the low-hanging fruit when it comes to increasing business. Completely take cold calls out of the equation and basically have the best introduction to a new opportunity. Having someone refer the company into new business based on his or her past satisfaction levels.
Lastly, always remember to thank the client for any successful referrals. It is just common courtesy to thank someone for a referral, regardless of the outcome. The company will lose credibility very quickly if they forget to thank existing clients for their helping hand.
Adapted from article by Jim Cross, author of Bacon & Eggs: How to be Totally Committed to Your Sales Career. He is also founder of The Cross Corp. For more information, visit http://www.thecrosscorp.com