Referral Based Selling
Referral Based Selling
A referred customer is already pre-sold on the credibility of the sales person, their company and the relevance of the products/services sold. These types of opportunities are much warmer than a cold-call based opportunity because it maximises the goodwill, inherent in the relationship between the referred customer and the referring person. By association, sales people are consequently perceived in a different light compared to those that have made contact ‘out of the blue’. The costs of selling to a referred customer are reduced because they are easier to see and are likely to be reasonably well qualified so that the probability for converting the business is much higher. Generally speaking, referred prospects will accelerate through the sales pipeline at a much faster rate than other types of opportunities and they will also be more receptive towards providing future referrals.
What are the biggest barriers to getting referrals?
If asking for referrals has not been included and communicated in the sales process then this will deter sales people’s focus as they will see asking for referrals as a ‘nice to do’ rather than a ‘must do’. This in turn usually means that there is no rigorous method for measuring and monitoring how many referrals are generated and what the conversion ratios are for closing referred customer business. Energy goes where attention flows, so without specific attention to this sales people are unlikely to invest their energy in this direction. (Even if they are firm believers in the positive impact that referrals can create!). For many sales people asking for referrals is uncomfortable because they feel unsure about how to do this effectively and they aren’t confident they will get their desired response. If people don’t know how to do something and they believe that what they are doing will damage their existing relationships then it’s better to avoid it all together. Additionally, if sales people make the common mistake of asking for referrals too early on in the relationship this can result in more refusals that further erode sales people’s confidence.
Therefore, to optimise the use of referral-based selling the following components are vital:
1. Asking for referrals and acting on them needs to be incorporated in the overall sales process.
2. Metrics around referrals should be sought and evaluated on a regular basis because this contributes towards furthering the rationale for generating them.
3. Development and training needs to be delivered to the sales team so they can maximise the impact of referrals and feel confident with this skill.
What is the best time to ask for referrals?
People will freely give referrals when they have benefited from your product/service and have an established relationship with you. This rarely occurs during the initial meeting because whilst they may like you, they haven’t yet validated what you can do for them. That’s why asking for referrals should be when the relationship you have established is strong enough to ensure their trust and belief in you. Assessing the strength of your existing customer relationships can be very subjective unless there is a meaningful set of relationship criteria in place. Although these will vary from organisation to organisation, they may include factors like:
- Communication frequency with key influencers
- Satisfaction with product/service
- Speed of response to queries/problems
- Length of relationship
The customers with the highest scores (based on the relationship criteria) are those that should be approached for referrals.
What is the best way of generating referrals?
1. Prepare a description in the form of a criteria list that specifies the type of person or organisation that you are looking to approach. This should be based on the profile of your Ideal Customer.
2. Evaluate all your customers using a relationship criteria and identify a list of those with the highest scores. For every customer your aim is to generate a minimum of 5 referrals. Therefore, if you have 25 customers on your list your target number of referrals will be 125.
3. Contact each customer on your list and take the pressure of them by explaining that you don’t want to sell to them, you would like their help.
For example:
"Do you know anyone who is (specify your criteria) that would be interested in learning about how our products/services can benefit them?" Preface your question with a softener such as: "I wonder if you can help me” or "I would really appreciate some advice”
3. When customers give you referrals, ask their permission to use their name when making contact. Alternatively, where your relationship is ‘rock solid’ ask customers to make the initial introduction by letter or email. Often customers will give a glowing testimonial and create a relevant context when introducing people.
4. Thank customers for referrals and keep them appraised of your progress. This creates a positive association towards the giving of more referrals in the future
Referral Based Selling - To learn more about this author, visit Nikki Owen's Website.
Like this article? Share it with your friends
Why is referral based selling so powerful?
A referred customer is already pre-sold on the credibility of the sales person, their company and the relevance of the products/services sold. These types of opportunities are much warmer than a cold-call based opportunity because it maximises the goodwill, inherent in the relationship between the referred customer and the referring person. By association, sales people are consequently perceived in a different light compared to those that have made contact ‘out of the blue’. The costs of selling to a referred customer are reduced because they are easier to see and are likely to be reasonably well qualified so that the probability for converting the business is much higher. Generally speaking, referred prospects will accelerate through the sales pipeline at a much faster rate than other types of opportunities and they will also be more receptive towards providing future referrals.
What are the biggest barriers to getting referrals?
If asking for referrals has not been included and communicated in the sales process then this will deter sales people’s focus as they will see asking for referrals as a ‘nice to do’ rather than a ‘must do’. This in turn usually means that there is no rigorous method for measuring and monitoring how many referrals are generated and what the conversion ratios are for closing referred customer business. Energy goes where attention flows, so without specific attention to this sales people are unlikely to invest their energy in this direction. (Even if they are firm believers in the positive impact that referrals can create!). For many sales people asking for referrals is uncomfortable because they feel unsure about how to do this effectively and they aren’t confident they will get their desired response. If people don’t know how to do something and they believe that what they are doing will damage their existing relationships then it’s better to avoid it all together. Additionally, if sales people make the common mistake of asking for referrals too early on in the relationship this can result in more refusals that further erode sales people’s confidence.
Therefore, to optimise the use of referral-based selling the following components are vital:
1. Asking for referrals and acting on them needs to be incorporated in the overall sales process.
2. Metrics around referrals should be sought and evaluated on a regular basis because this contributes towards furthering the rationale for generating them.
3. Development and training needs to be delivered to the sales team so they can maximise the impact of referrals and feel confident with this skill.
What is the best time to ask for referrals?
People will freely give referrals when they have benefited from your product/service and have an established relationship with you. This rarely occurs during the initial meeting because whilst they may like you, they haven’t yet validated what you can do for them. That’s why asking for referrals should be when the relationship you have established is strong enough to ensure their trust and belief in you. Assessing the strength of your existing customer relationships can be very subjective unless there is a meaningful set of relationship criteria in place. Although these will vary from organisation to organisation, they may include factors like:
- Communication frequency with key influencers
- Satisfaction with product/service
- Speed of response to queries/problems
- Length of relationship
The customers with the highest scores (based on the relationship criteria) are those that should be approached for referrals.
What is the best way of generating referrals?
1. Prepare a description in the form of a criteria list that specifies the type of person or organisation that you are looking to approach. This should be based on the profile of your Ideal Customer.
2. Evaluate all your customers using a relationship criteria and identify a list of those with the highest scores. For every customer your aim is to generate a minimum of 5 referrals. Therefore, if you have 25 customers on your list your target number of referrals will be 125.
3. Contact each customer on your list and take the pressure of them by explaining that you don’t want to sell to them, you would like their help.
For example:
"Do you know anyone who is (specify your criteria) that would be interested in learning about how our products/services can benefit them?" Preface your question with a softener such as: "I wonder if you can help me” or "I would really appreciate some advice”
3. When customers give you referrals, ask their permission to use their name when making contact. Alternatively, where your relationship is ‘rock solid’ ask customers to make the initial introduction by letter or email. Often customers will give a glowing testimonial and create a relevant context when introducing people.
4. Thank customers for referrals and keep them appraised of your progress. This creates a positive association towards the giving of more referrals in the future
Referral Based Selling - To learn more about this author, visit Nikki Owen's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
|||
Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
|||
Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
|||
George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
|||
John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
|||
Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
|||
Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
|||
Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Nikki's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
|
||
|
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Performance Improvement Plan Benefit From Analytics Branding The Product Getting Past Your Past Capture More Clients |
|
 | ||
 |
Top 50 Social Media Blogs
Top 50 Social Media Blogs | |
 |
Top 50 Marketing Blogs
Top Marketing Blogs of 2010 | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
| ||||||||||
|
| ||||||||||
|
|
||||||||||