Referrals are one of the best – and easiest – ways to find new opportunities, but they’re often overlooked.
“I don’t want to seem like I’m begging,” moan some sales reps.
“Customers never have anybody to refer,” complain other sales reps.
What do business owners share? Their primary new business development strategy is through referrals. And so it should be. You know that some of the best leads you get were referrals from customers who love and trust you. So, let’s get more of them!
How Many Referrals Should You Target?
We recommend to clients that 20% of all new leads originate from referrals annually. Take your new business development target and plan to get 20% of the leads you need from referrals. Now you have a target.
To accomplish your referral goal, you have to get proactive and make asking for referrals a part of your company sales and account management processes. This way you aren’t waiting for clients to think of you to offer them up. With a good process in place, you create a steady stream of referral prospects while letting your customers know how important referrals are to you.
Who Should Ask For Referrals?
Depending on your new business development target, 20% may be a significant number of referrals to secure. You know not every referral will close. If you only have one salesperson, and that salesperson doesn’t have a relationship with all your clients, you’ll need more help.
You can enlist everyone in your organization who works with your clients to ask for referrals.
What Holds People Back
There are only two things that stop your staff from requesting referrals today:
- Awareness of how important it is for the company.
- Fear of rejection by customers.
Creating a referral gathering process and training your staff how to implement it can address both.
5 Steps To A Better Referral Process
Use these five steps to set up your referral gathering process.
- Paint a picture. Asking for referrals can be scary. It’s another opportunity for rejection. Perhaps your client isn’t as happy as you thought or may not want to disclose names. With this in mind, you want to be sure you’re asking people with whom you have the best potential for success. Create a profile of the characteristics of the ideal client to ask to paint a picture in your staff’s mind. Perhaps it’s a business owner or IT manager who has been working with your company for 6 months without issue. Or, it may be an executive whose team recently experienced a significant issue and you addressed it quickly. A client profile helps everyone on your team envision who they’re asking.
- Identify four perfect points to ask. Knowing who to ask is only one piece of successful referral gathering. There are points in your sales and account management process that are natural opportunities to ask for referrals. There are also points in your delivery process when it’s natural to ask customers for referrals. Clients are happy. Discussions are valuable. They’ll be more than willing to recommend people to you. Determine which four are your best points and integrate them into your processes.
- Create natural opportunities. Clearly you don’t want to ask for referrals every time you see a client or prospect. (This is a question I get asked frequently.) For most of your staff and clients, that’s uncomfortable. If you want to extend beyond the four perfect points you identified, create some other genuine circumstances to ask, such as quarterly business reviews or project close-out meetings. Don’t add too many or it will be hard for your staff to remember.
- Script it. Normally I am not one to recommend a script but if your staff all know exactly what to say to ask for a referral, they’re more likely to work it into the conversation. Have them choose one question they’re going to use every time they ask for a referral. Then teach your team how to frame their referral request, including how to transition from the topic at hand to the question. The training doesn’t need to be a half-day session. Use an hour at a company meeting or your Monday morning meeting. The goal is to make people comfortable with asking for referrals. The quickest way to do that is to practice together.
- Measure referrals. Not only will this validate that your process is working, it’ll show your team the impact they’re having on growing the business. One client of ours implemented a referral gathering initiative, trained all their staff, and started measuring results. Within seven weeks they saw a 328% increase in referrals. Over a year, they realized a 31% increase in net new clients. Create a lead source code in your CRM or marketing automation tool and you’ll be able to measure sales results from referrals and even the lifetime value of referrals.
Once you take a proactive approach and make referral gathering part of your sales, account management, and delivery processes your whole company will get comfortable asking and you’ll have a steady flow of warm prospects.