When you’re looking for a new accountant, lawyer, technology solution, bank, or even hair stylist, I bet you don't just pick one at random. Sure, you do a little Internet research. But when it’s time to narrow down the options, where do you turn? You ask the people you trust who they trust.
You ask them for referrals.
Referrals Rule in Sales
Most buyers shop the same way. In fact, a Nielsen study revealed that 90% of consumers trust their peers far more than ads. Granted, this was a consumer study, but people are people, so the same logic easily applies to B2B. People still connect with one another. And they still talk -- especially before spending money.
For companies and salespeople, this is really good news. Because referral selling is, hands down, the most effective and least expensive way to attract and retain new clients. Referred salespeople get every meeting at the level that counts, shorten their sales cycles, reduce their cost of sales, and convert prospects into clients well more than 50% of the time.
Think about it. Would you prefer to do business with:
Someone who reached out to you via a cold call, or
Someone you met through a friend or colleague with whom you have an established, respected relationship?
Referral selling is really a no-brainer, but it's not how most sales organizations systematically fill their pipelines.
Why Salespeople Don't Ask for Referrals
Many reps think asking for referrals is pushy, arrogant, and salesy. They worry their contacts might say "no," that these requests will feel intrusive, or that asking for help implies their business is struggling.
But these worries are often overblown. Referral selling is intensely personal, but it’s also highly rewarding -- for everyone involved. The sales rep gets a new client, the prospect gets introduced to a valuable resource, and the referral source gets to help out two people at once. Everyone wins.
Some salespeople shy away from this proven prospecting strategy because they believe their time is better spent on other sales activities, such as social media and email prospecting. They'd rather hide behind technology than reach out to people and engage them in conversation.
The Right Way to Prospect Through Referrals
It takes more than individual salespeople asking for referrals to succeed with referral selling. Like anything worth doing, referral selling is a strategic initiative. Leaders need to drive the strategy. They have to commit to referral selling as their primary outbound business driver -- the way their team prospects every day.
While they keep what's working -- marketing automation, lead nurturing, branding, social media outreach, and other connection strategies -- referral selling becomes the foundation for sales success, and the rest of these selling tactics are just bonuses.
Here's what it takes to integrate referral selling into your sales process:
A company culture that makes everyone part of the sales team
Methods to track and measure referral activities and behaviors
Written referral sales plans for each individual and for the company
Accountability for referral results -- new clients, new revenue, new targets
Commitment to coaching and reinforcing referral behaviors
Referral selling is straightforward and deceptively simple. But it's not easy. If it were, every company would have adopted referral selling.
Since they haven't and you will, referrals become your biggest competitive differentiator. While your competition is still playing around on social media, trying to figure out who the decision-maker is, you’ll be in the conference room sealing the deal.
Originally published Nov 13, 2014 8:00:00 AM, updated February 01 2017