How Selling to Referrals Is Different Than Other Lead Types

Bill Cates
Bill Cates




Have you noticed how crazy busy everyone seems to be these days? Have you noticed how hard it is to reach your clients, let alone your prospects? Have you noticed how difficult it’s become to cut through the noise your prospects experience every day just to grab their attention for a minute or two?

Building your sales process around referrals is beneficial for a number of reasons, including the fact that a customer referral can help you earn prospects' interest faster. However, getting referrals are not enough -- salespeople also have to know how to work them.

It's Different When You Work From Referrals

When you’ve been introduced to a prospect, that prospect’s interest is piqued, and they're more likely to answer your call, return your call, or reply to your email.

But not just any type of introduction will do -- it has to be an engaged introduction. An engaged introduction is a collaborative effort where the referral source works with you to make sure you get connected to the new prospect. This type of introduction gets your foot in the door and establishes a genuine connection between you and the new prospect.

After you’ve received a referral, you have to set the appointment with the new prospect. Depending on your business model, the appointment might be in person or take place over the phone.

And contacting your prospects and setting appointments looks different when you work from referrals as opposed to other types of lead sources. What you learn about the new prospect from your referral source helps you craft a much more compelling reason for why that prospect should give you a piece of his or her valuable time.

However, keep in mind that just because you’ve met someone through a referral, it doesn’t mean that person is going to meet with you. When the trust level between the referral source and the new prospect is high, that is sometimes enough to move the sales process along. But not always. In most cases, you have to continue to deliver value and build trust so that the prospect warms up to meeting with you.

At the opposite end of the sales process is the close, a word I've never particularly liked. “Closing the sale” should never be about tricky, manipulative closing techniques, but especially not if you hope to receive a referral. If you trick people into buying from you, their reaction could be regret. This can lead to cancellations and certainly no referrals. Think in terms of confirming the new relationship instead of closing the deal.

The Value of a Referral Culture

I often call referrals “forgotten gold.” Most businesses know the importance and effectiveness of referrals and introductions, but very few have strived to build a referral-based business. They give lip service to referrals, but they rarely train their people on how to generate referrals.

Some companies have adopted the practice of measuring their Net Promoter Score (NPS). The NPS is a customer loyalty metric developed by (and a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It measures the willingness of customers to recommend your business, and places them on a continuum from a low range of “detractors” to a high range of “promoters.” Proponents of the Net Promoter Score say it’s the most important metric in measuring customer service. 

However, while this is certainly a worthwhile measurement, most companies don’t go to the next step of leveraging these scores. They don’t become proactive in turning promoters into connectors. They encourage word of mouth, but they don’t seek referrals and introductions.

In my view, stopping at worth of mouth is an incomplete growth process. To maximize new-client growth through referrals, you have to be referable and proactive. I'll explain how to achieve these goals in future posts.

Editor's note: This post is an excerpt from Bill Cates’ newest book, Beyond Referrals, and is reprinted here with permission. 

Topics: Referral Sales

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