It’s a well known fact that the most powerful way to generate new business is by word of mouth/referral and yet very few people ever bother to develop a systematic approach to generating new business in this way. Why is this case?
Well most sales people only occasionally ask for a referral or in most cases are fortunate to benefit from unsolicited referrals given by happy clients. In a recent survey Dr Ivan Misner founder of Business Network International found that “The average business professional has a 30-40% gap between the amount of business being brought in by referrals and what they should be getting”.
This is largely due to the lack of a systematic approach by organisations and or individuals to developing referrals which means results are poor and negligible at best when referral attempts are made. The other reason is fear of rejection. One of the best ways to look at Fear is to see it as FALSE EVIDENCE APPEARING REAL. As with most things in life a lot of the fear associated with asking for referrals is based on myths generated from other sales or business people who have not approached this form of prospecting in the right way and yet many account managers and sales people embrace these fears because it allows them to remain in their comfort zone and gives them another reason not to ask!
Here is a list of the four most common myths associated with referral generation:
1. I don’t feel I’ve served my clients enough to ask – “the value factor”
You can develop an environment conducive to asking for referrals by simply creating a good experience for both clients and prospects during all your interactions. With a prospect this can be done by building trust during your early meetings through good interview skills, which indicate a keen interest in determining how you can be of benefit to the prospect and or their organisation. In doing this you not only build trust but also provide value to the customer as they view their interactions with you as a highly productive use of their time. Good questioning automatically provides value to the client, which buys you permission to seek referrals. With existing clients -who are the most lucrative source of referrals- you must provide good service and support on an ongoing basis. This also buys you permission to ask for introductions to others who could benefit from what you are providing in the same way they have. Most clients are more than happy to give multiple introductions on this basis if asked correctly.
2. I don’t want my clients to think I’m not successful – “the begging factor”
Remember that the mindset that you bring to the referral process is critical to your success. When you ask for referrals based on others benefiting in similar way to that which your client or prospect has benefited, you are not perceived as begging or unsuccessful. On the contrary you are perceived as a professional looking to help other people in need of your services. In fact prospects and clients are more likely to collaborate with you in identifying other people similar to them who would find your offering valuable in the same way they would recommend a good restaurant or hotel. The key is basing the referral request on the value you’ve provided as opposed to your need to make a living or hit your sales targets.
3. I will look too aggressive and therefore hurt the relationship – “salesy factor”
Remember people respond in kind. As long as you ask politely and confidently in the right way which you have practiced; you will not look aggressive, in fact most clients and many prospects expect you to ask .In our workshops we provide participants with a “non salesy” and non aggressive process for asking for referrals and dealing with referral resistance that has helped business professionals throughout Europe, Asia and Africa leverage referral generation as a powerful prospecting tool that over time has even eradicated the need for “cold calling” and any other form of prospecting in many circumstances.
4. Most clients feel uncomfortable when asked for referrals – “the projection factor”
The fact is that some, not all clients feel uncomfortable when asked for referrals. Those that do feel uncomfortable tend to feel that way because the person asking for the referral has not created an environment conducive to asking for referrals and or has asked at the wrong time i.e. before adding any value to the current relationship. The second reason is that many sales people are so riddled with fear that this has an impact on the way in which they ask for the referral which is picked up by the client or prospect who then senses that giving a referral is probably not the right thing to do in that particular circumstance and as such is resistant to the referral request.
So as you can see most of the negativity around asking for referrals are myths based on the experiences of those sales/account managers and business people that do not know how to ask for referrals properly or have never tried. Here is another list of reasons why you should make referrals a key part of your prospecting arsenal:
- It reduces the length of your average sales cycle
- It reduces the need for you to make cold calls
- Referred prospects and clients are less sensitive about price and more value focused
- If you ask in the right way you tend to be referred to your ideal customer profile as opposed to people you can’t help
- Referrals allow you to develop niches specialties which create more unsolicited business
- If you’ve been in business, in sales, account management, or customer service for more than 12 months you are probably sitting on an untapped goldmine of referral opportunities and don’t even know it!
The more you think about it, the more you begin to realise that everyone benefits from referrals; the business/sales person, the client who introduces the sales person -as it reinforces their own decision to use you and it allows them to be the hero and help others who could benefit from your services and finally the prospect who ends up purchasing a product, service or solution with low risk and high value which are virtually guaranteed through recommendation. Isn’t it time you started getting serious about referral generation?
Buki Mosaku is the founder of Results Oriented Sales Solutions and helps clients generate more prospects, close more sales and grow existing business www.resultsorientedselling.com