Referrals are one of the best ways to garner qualified prospects and increase your sales effectiveness. Instead of inbound marketing or targeted cold calling, referrals give your sales team a legitimate reason to connect with qualified prospects and an expectation of an above average closing ratio.
While every experienced sales person understands the importance of sales referrals, far too many fail to maximize the opportunities to obtain them. Since referrals can be such a crucial component of improving sales, it is imperative that both you and your team understand how to incorporate a request for referrals into your sales process. The following are three simple but sometimes overlooked strategies for increasing the number of referrals your sales team can generate.
Ask for a referral every single time
Even though it seems simple, it is shocking how often sales people do not ask for referrals during the sales process. The “ask for referrals” phase must be part of your planned sales engagement for customers that have closed as well as for specific prospects, even if they do not close. Executing this activity must be ingrained into every member of your sales team, and should be a key sales success metric that you use to manage your reps.
One situation that even more experienced sales people sometimes miss is asking for a referral after a prospect failed to close. Even if you think the prospects were unreceptive with you or your presentation, you may be surprised to find that they simply were not expressive of their interest or appreciation of the value you presented. If they have a friend or business associate that they believe would benefit, they might refer them to you, but only if your team asks!
Follow up with customers, especially if they are happy
Your sales team should already be following up with existing customers, to ensure that they are happy with your services as well as to discuss other potential solutions your company can provide. These planned follow-ups are also a great time to ask your customers for referrals.
Many sales people mistakenly believe that the best time to ask for referrals is right after closing a deal. This is understandable, as the period immediately following a sale is when your customer is likely most excited and knowledgeable about your product. (See 5 Ways to Build Rapport that Increase Sales Outcome) However, asking for referrals can be equally effective immediately after a follow-up call in which your sales rep has confirmed that a particular customer is happy or satisfied with your company.
Offer referral incentives? Yes!
A gentle offer of tickets to a sporting event or a round of golf is an effective incentive for a customer to offer referrals. If you properly incentivize your customers to provide you with leads at a cost that is acceptable to your company, you will see results.
One of the keys in a successful sales model is the ability to be constantly replenishing your pipeline of leads. As a sales leader, it is absolutely essential that you make referral generation a major element of your overall strategy. Countless sales research has indicated that referral deals close far more often than other sources, so you should do everything in your power to utilize the strategies above (as well as your own imaginative techniques) to maximize the number of referral leads your team is generating.