Last month, Jeff Gardner introduced referrals as a sales tool for growing a customer base. Some advantages include a higher return on time invested (ROTI), a shorter selling cycle, better quality prospects, reduced prospecting time, and more time to service current clients. This month, he explains how and when to ask for referrals.
Timing is crucial once you gain commitment from a customer. You must make sure that the customer’s product or service arrived on time and met quality expectations; you must ask the customer if you can help with additional needs; you must apprise the customer about new products or services offered by your organisation, and…oh yes, you must ask for a referral!
It seems that I always hear the same answer whenever I ask salespeople if they use referrals: "Yes, of course." So, I enquire how they ask for a referral and the typical response is: "Well, I don’t ask, I just get them." Salespeople that ‘just get’ referrals are true underachievers, no matter how much money they earn. Referrals are not handouts and not automatic, so never expect one and never take one for granted.
You probably have a computer program such as GoldMine, Act or Outlook to keep tabs on your contacts and customers. Use that database (or a method of your choice) to help you keep track of referrals because you will continuously be adding new names to your source database. I promise you, once the referred business picks up, it is easy to forget who sent which referral your way and you will have many people to thank. As they say in Hollywood, never forget your roots.
The 80/10/10 rule says that 80 per cent of your customers will give you a referral if you ask. 10 per cent will never give you a referral and 10 per cent will give you a referral even if you don’t ask for one. Do you want to hinge your career on the possibility of a few trickle-down referrals? Would you rather cold call?
Ask every satisfied customer for a referral – make it a part of your everyday routine. Don’t be alarmed if your customers need a few days to think of someone for you. Be patient! If you do your part and ask, sooner or later the phone will start ringing, the emails will start flying, and your sales numbers will start rising. Get in the habit of asking your customers and your customers will get in the habit of thinking of you.
The law of reciprocation dictates that human beings, when treated nicely, want to return the favour. The easiest opportunity for you to ask for a referral is when a customer compliments you or thanks you for your help and customer service. Simply thank the customer for the kind words and, in the same breath, ask if there is anyone that s/he knows who might benefit from meeting with you.
Frame your request around an initial meeting – leave out the sales call. You will feel more at ease asking for a referral if you let your customer know that you are not expecting them to give you the name of someone who will buy from you. You simply want to meet someone new.
Types of referrals
There are four types of referral to consider. The "satisfied customer" referral is self explanatory. I have developed a sample script to help with the initial request:
"One of the ways that I grow my business is through referrals. The best way for me to do that is through an introduction from a satisfied customer. Who among your business associates would benefit from my service? Would you mind calling them to let them know that I will contact them in the next week-
Let the referral source know that you are serious about follow-through. You want your source to feel confident in you and your professionalism. Give them a time frame for when you will make initial contact.
Next up comes the "conference" referral. You should suggest a conference referral when a referral source feels uneasy about giving you the name of a business associate. Perhaps the source has been burned in the past by a salesperson who did not follow up on a referral.
Sample script: "I’m sure you know that one of the ways I grow my business is through personal referrals. Do you know of anyone, a business associate or someone in the industry that might appreciate the type of service that I provide? Perhaps the three of us could set up a conference call or a lunch meeting."
With the "let’s just be friends" referral, ask prospects with whom you have established a good relationship, but who for one reason or another are unable to become a customer at this time. For example:
"I understand that this isn’t a fit for you at this time, but maybe we can work together in the future. In the meantime, do you have any business associates in the area who might be interested in meeting with me to discuss my company’s services-
Finally, the "current customer" referral. You probably have some customers who have been with you for several years. It might seem awkward, after all this time, to start asking for referrals because you don’t want your customers to think that you are hard up for business. But current customers are one of your best resources for new business because they know you, your product and your company. Try this script:
"I’ve really enjoyed working with you over the years, and I appreciate your business. I’ve recently made a commitment to utilise referrals in my business as a way to contact new customers. By using referrals, I am able to grow my business while at the same time continuing to service my current customers. Who among your business associates do you feel might benefit from my services-
Finally and most importantly, ALWAYS send a handwritten ‘thank you’ note to your referral source immediately after receiving a referral.
You can include an inexpensive referral gift such as a Blockbuster or Starbucks gift card. Send a card right away with your intentions and timetable for contacting the referral and mention that you will keep the referral source informed about the status and forward movement on the referral.
Here are some golden rules for handwritten notes:
â€¢ the note does not have to be lengthy;
â€¢ you have to write the note…not someone else;
â€¢ include your business card; and
â€¢ hand-address the envelope and put a self-adhesive stamp on it.
People will appreciate that you took the time to write them a personal handwritten note.