Asking For Referrals May Backfire
“Who do you know that could benefit from my services?” This question is similar to ones asked every day by salespeople hungry to add to their customer list. If the person being asked is a satisfied client, shouldn’t they be happy to help out? And shouldn’t you take the opportunity to ask? The answer may surprise you.
We’ve all been taught to ask for referrals. Let’s face it, who doesn’t like to get a warm referral? It beats the heck out of cold calling. But are you skating on thin ice with your approach?
We recently asked some of our clients to compare referrals they asked for from clients to referrals that were gladly given to them by clients. The results caused a few jaws to drop. Chris exclaimed, “In the eight years I’ve been asking for referrals I can’t think of a single time when the referral I received turned into a great client.” That’s not to say that he didn’t get some clients from his approach; they simply weren’t the best type of client. He continued, “Yet, many times when I’ve gotten an unsolicited referral, it ends up being a great referral. In fact, I’ve gotten some of my very best clients that way!”
The truth is that not all referrals are created equal. If you want the best referrals, you have to stop asking for them. There are a couple of things that can go wrong when you ask for a referral. First, if the person you’re asking doesn’t feel 100% comfortable, it will put them in an awkward position. They will typically respond with no referrals or poor referrals. No one will jeopardize their best relationships by referring to someone that they aren’t excited about.
Second, if you are trying to position yourself as a valuable resource with a client or prospect, asking for referrals can be a real credibility-killer. Let’s look at an example. Dave is a financial advisor. He has distinguished himself from others in his field by not acting like everyone else. He has developed a peer-to-peer relationship with Jack, a small business owner. In other words, Jack views Dave as a valuable resource and advisor, not a typical salesperson.
The moment that Dave asks for referrals, Jack realizes that he’s just like every other salesperson. Up to that point, Jack and Dave had a level playing field. Dave was providing counsel and services for which Dave was happily paying. In other words, there was an even exchange of value for services provided. When Dave asks for referrals, he is putting the relationship off-balance. That imbalance puts pressure on Dave.
Let’s get this straight. Referrals are good, but you can’t ask for them without risking damage to your relationships. So what is a salesperson to do? To answer that question, you need to ask yourself another question. What have you done in the past to get unsolicited referrals?
Chances are that the way you gotten your best referrals was that you gave others a reason to refer you. You provided exceptional service and your product or service was the absolute right solution. In other words, you gave them a reason to be a raving fan. It all starts with choosing clients who you can best serve and then doing a phenomenal job. It doesn’t end there however. You must continue to follow-through and be a resource long after the sale is made. You have to stand out with your level of commitment to your client.
Then when a referral is given, you have two great opportunities for getting more referrals. First, show sincere appreciation and gratitude for all referrals given. Your gratitude will inspire them to continue to help you. Second, educate your referral source on why this was or wasn’t a good referral for you. Yes, bad referrals should be acknowledged for what they are. Otherwise, you are destined to get more of the same which is a waste of everyone’s time and energy. Of course, you want to communicate the information in the right manner. Likewise, if someone gives you a great referral, you want to acknowledge to your referral source why the referral is a good one for you. Better education will lead to better and more referrals.