How to Get More Referrals - An Interview with Clayton Shold
By Colleen Francis
The best way to reduce your selling time - and cost of sales - is to sell through referrals. In this article I will share with you the unedited transcript of an interview I gave at www.Salesopedia.com. My challenge to you is to implement at least one referral strategy this week and to let me know what one you chose and how it's working for you!
Clayton: Why should we be asking for referrals?
Colleen: Well, Clayton, this is a great question. If a sales person wants to work from a target list, or to cold call they could expect to close some where between 1 in 75 to 1 in 125 calls. That means out of every 75 phone calls, you might get one sale. I have seen ratios as good as seventy five to one and as bad as 125 to one.
What's interesting about referral selling is that closing ratios drop dramatically. In fact, we have seen closing ratios as tight as 3 to 1. That means you are making 3 calls and getting one sale as opposed to 75 calls and making one sale. Now, I don't know about you but I would much rather make 3 calls and get 1 sale instead of making 75 calls! So, if you are looking to sell more in a limited time, then referred leads are really your best way to do that.
Clayton: That given the case, and those numbers are certainly compelling, why don't people, sales people particularly, like to ask for referrals?
Colleen: I think there are 2 reasons. One; a lot of sales people think that asking for referrals makes them sound desperate. They think their clients are going to say, "What do you mean? Aren't you good enough to sell without my help?" And so, they don't ask. And really nothing is further from the truth. Clients want to help.
Two, sales people are scared to ask for referrals because they are concerned that the client may not be as satisfied as the sales person thinks they are! If a sales person is unsure of the customer's satisfaction they will not ask for the referral.
Sales people who are unsure of their service level and who don't want to appear or sound desperate, tend not to ask. Also, when I am able to dive deeply into the problem with a sales person we find truthfully that most sales people don' know how to ask for a referral properly, and so they don't go about doing it at all.
Clayton: So, on that note Colleen, what is the best way to ask for referral?
Colleen: The biggest mistake that I see sales people make is that they ask too soon. Asking too soon ensures you are less successful, which then of course reinforces the thought that you shouldn't be asking in the first place! Most sales people will ask for referrals before the service is even delivered, and I don't believe that you should be ever asking for a referral before the customer has had a chance to experience your product and can speak favorably about it. Only ask for referrals after the customer has had some experience with you and you know that their satisfaction is high.
Do give a referral first. Use the power of reciprocity, a very strong human influencer, to our advantage. I encourage sales people to give referrals to their customers first.
So what do I mean by that. Let's just say that you are a life insurance sales person, and you are selling to a business owner. You could ask that business owner what type of client they are looking for and perhaps refer clients or potential clients to that customer. Maybe you know that your client has just moved to the neighborhood and needs to locate services for their…dentist, doctor or new landscaper. The referral can be personal. Maybe you know that the HR manager you just sold to is desperately looking for new hires and you could refer them to a staffing company. Always look for ways to refer other resources and add value to your clients by helping them grow personally and professionally. It's in our best interest to help our clients grow, because when they grow, they are going to need more of us!
Give first, and then take a referral. That's the best way to get a referral.
Now, how to ask. The very best approach is to be very specific. So, Clayton, for example, if I was trying to meet you, I might speak to one of your colleagues who is a client of mine, and I would say, "I have been trying to meet Clayton for some time now, do you know him?" "Would you be able to introduce me?"
That's a much better question than just asking "Who do you know?" What I find is customers want to help, but when the question is too broad, they don't know how.
Clayton: Let's say you do get the referral, what's next, what do you do next?
Colleen: First, thank your referral source. Sit down at your desk, pull out a piece of stationary, and hand write them a thank you note.
"Dear Clayton, thank you so much for the referral to Bob. I will be in touch with him this week and let you know what happens."
The most critical part of that thank you note is letting them know that you are going to follow up to tell them what the end result was. Simply you will not get more referrals if you don't close that referral loop.
If I don't follow up with you, and say, "hey, I talked to Bob and we are moving ahead". Or "I talked to Bob and it's the wrong time". You, Clayton, the referral source are left wondering, what happened to that referral you gave me. As soon as you pick up the phone to call me and find out what happened, our relationship has eroded because your trust in me has eroded. In your mind, because you have not heard any different from me, it seems like I am not doing a proper and professional follow up.
Step number one, write a thank you card. Email doesn't cut it. It has to be a hand written thank you card. Pop the card in the mail. Follow up with your referral, and make sure that you use the referrers name right upfront. If I was calling Bob, for example, I would say:
"Hi Bob, this is Colleen from Engage Selling. Clayton asked me to give you a call" Or, "I am calling because Clayton…."
The referrers name has to be right upfront because "Bob" has to hear the connection early. If you wait until the very end of your called call to mention the referrer, "Bob" has tuned out. He doesn't know why you are calling, he sees no connection.
Finally you need to follow-up with your referrer and let them know what happened. If "Bob" comes on board and does business with you, reward your referral source! Small gifts, a donation to their charity, their favorite wine, pick something that is personalized to the referrer. There is no point in buying them a bottle of wine, if your referral source is not a wine drinker. The gift has to be personal. And, it doesn't have to be expensive. You could give a five dollar Starbucks card. Any gift, as long as it's personal, goes a long way to helping secure more referrals in the future.
Clayton: Colleen, great advice. One last question, when you've got an established client base, and normally, you would say that timing is critical as to when you ask for referrals. So; let's say you've got that established client base. How frequently might you go back to that client and ask for referral, say that you've done business with for a number of years?
Colleen: That's a great question. I suggest creating an advocate program with your best referral sources. This is a way to ask for a referral each month in a soft way by delivering value first. The advocate program ensures you are creating a culture of reciprocity with your clients and referral sources, keeping your name in front of them, so that they think of you first, and refer you more often. Keep in mind that you are delivering value first - articles, content, books, etc. NOT advertising or marketing materials.
For example, if you were on my advocate list I would send you a resource each month that could help you be better personally or professionally. This resource is not an advertisement of my services, but maybe a magazine article that I thought you could use in your business to help, or maybe a book that I really liked that I thought would help you personally or professionally. As well, maybe I will take you out to lunch, or introduce you to someone I think will be of value to your business. By constantly delivering value, maybe not even related to the business services I provide, you are encouraged to send me more referrals on a regular basis.
Clayton: Oh, excellent. So, there is just that, it becomes less of an event asking for a referral, as opposed to a matter of just doing business.
Colleen: Exactly! To summarize: Ask specifically for introduction, thank your clients for the referrals, follow up, and send a thank you gift! Lastly, set up an advocate program to create a culture of reciprocity.
Clayton: Colleen, thank you so much for being with us today in Salesopedia Media. If somebody wanted to find out more, could you give us your website contact information?
Clayton: Colleen, it's been a pleasure speaking with you today. Thanks for joining us on the show.
Colleen: Oh, my pleasure Clayton, thanks for having me.
Clayton: That's it for Salesopedia Media this week, thanks for listening.
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Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.
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