There are some interesting statistics in sales – in fact you can make great sport around the various metrics a sales team can generate.
Of them, one set of statistics that should make ALL sales people stand to attention….those around referrals.
You’d be pretty hard pressed to find a sales person who doesn’t understand the value of referrals but, surprisingly, so few make asking for them a regular and disciplined part of their relationship with their clients.
If you are one of the few who don’t realise the immense value referrals present or, as many of us are, simply need a reminder – here goes:
- Clients are 4x more likely to buy when referred by a friend.
- 92% of people trust a referral from friends and family – even 84% if they aren’t.
- Also, when they do, on average that client has a life time value 16% greater than one who isn’t.
- Nearly 75% of executives prefer to work with a sales person who has been referred to them by someone they trust.
- Referred clients have an 18% lower rate of churn
- 65% of new business comes from referrals
- 87% of buyers actively seek advice before buying
There are many more – read more at DCR Strategies Inc for 26 reasons why referrals are important
One referral statistic stands out head and shoulders above the rest –
“83% of people are willing to refer after a positive experience, but only 29% do! “( Fourth Source)
If you are simply sitting back waiting for a referral – you need to realise that only 29% of people will, but 54% of people are prepared to. They just need some prompting.
The gap is those 54% of people who want to – but don’t. Maybe, just maybe, they don’t know how to and/or just need to be prompted. Maybe a sales person just needs to ask them.
Obviously, the above is hugely conditional upon two key words – positive experience. The key to any referral activity is to first ensure the person you are asking for a referral is actually a happy clients.
Why don’t we ask? There are many excuses. It wasn’t the right time to ask (so when is?). I forgot (so make it a habit). I have nothing to offer (soooooo…..maybe a career change?). I’m afraid of rejection (if they are a good client, the worst outcome is they don’t know anyone to refer you do). If they have a referral, they’ll give it to me (refer above statistic!). I don’t want to be seen as demanding or pushy (your own clients are asking for referrals, they get it!). I don’t need to (*bulls@#t*).
No surprises all these start with “I”. They aren’t about your clients – they are about you. They are excuses, not reasons, why referrals are asked for.
Asking for a referral is often over-complicated when it needn’t be. What do you need to think about when asking for a referral?
- Habitualise Asking: Agenda item it, plan it, prepare for it and execute. Most ‘excuses’ are simply smoke and mirrors and the real reason is sales people forget entirely. They are so focused on the transaction, they just don’t ask.
- Ask for help: People are willing to help in most situations – you just need to ask. The opening line ‘I wonder if you can help me…’ is an incredibly powerful phrase.
From here you can either
- Ask for a specific introduction: If you know your client/intermediary knows someone you really wish to meet, finish the sentence with ‘….I have been wanting to talk meet X. Would you be in a position to introduce me? I’d love to talk to them about Y’ or similar
- Ask generally: If you know your client/intermediary is likely to refer but aren’t entirely sure who could be potential, finish the sentence with ‘….I, like you am trying to grow my business. I am looking to meet with great business people similar to yourself. Do you know anyone else I should be talking to?’ or similar.
There is seldom a right or wrong time – simply a right relationship with the right client. That said, when you ask for a referral it is one of the few times in sales whereby you are doing something largely for yourself. Just be honest about it. However, in asking, you will find some clients get great satisfaction out of being asked for and giving referrals.
With LinkedIn and the like today, the specific introduction is the most likely (and most successful) strategy. As a professional sales person, you should know who your targets are and who knows them so asking to be introduced should be your preferred strategy. The pitfall with asking generally is, once given, you need to honour the referral provided. Unless you take the time to describe what you are looking for in a referral to your clients/intermediary, there is a risk they can refer you someone who doesn’t represent a client for you.
The key here is you aren’t asking to be referred in to pieces of work or transactions – you are asking to be introduced in to relationships. You want to meet people – not purchase orders.
Here is the kicker – THIS REQUIRES NO EXTRA WORK! You should already be researching prospects and you should certainly already have meaningful relationships with your clients and intermediaries. It is simply a matter of capturing the time you already have in front of them to ask for a referral.
Here is one statistic that should make sales leaders and people excited for the opportunity it presents:
Notwithstanding the accuracy of all the above statistics – are you in the 89% of sales people who don’t ask for a referral or the 11% who do? If the latter, I applaud you. If in the former – you have a massive opportunity to make 2018 huge by simply starting small and asking a few of your loved clients for referrals. Remember, it is highly likely your competitions are in the same position. By asking, you immediately gain ground on them unless they act.
Make it a 2018 sales resolution. I’d love to hear how it goes if you do.