6 Simple Ways a Referral Program Eradicates Top Sales Challenges

referral programAre your sales reps wasting time prospecting?

You’re a sales leader accountable for increasing revenue, while at the same time managing your profit margins. If you’re fairly new to your company, your sales reps are a mixed bag of talent. If you’ve beaten the odds and have held your role for more than 18 months, you’ve already gotten your team lined up, your prospecting strategy in place, and your goals set.

However, a few critical sales challenges still remain.

According to the 2016 “Sales Performance Optimization Study” from CSO Insights, the top four sales execution challenges and barriers are:

  • Inability to generate enough qualified leads (53.3%)
  • Difficult competitive differentiation (41.3%)
  • Sell cycle too long (32.1%)
  • Close rates not high enough (28.2%)

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Year after year, “the inability to generate qualified leads” tops CSO Insights’ list of sales challenges. And the problem is only getting worse. In 2015, 43.6 percent of firms identified this sales execution challenge. This year, it was 53.3 percent.

I’m hearing the same thing from the sales leaders with whom I work. The lead generation problem is chronic and increasing. And it must be addressed.

The solution is clear and right in front of you: a disciplined, systematic referral program with skills, metrics, and accountability for results.

6 Ways a Referral Program Solves These Top Challenges

When your sales reps prospect through referrals, they:

  • Get every meeting at the level that counts with one call.
  • Arrive pre-sold: Prospects know the business reason for meeting.
  • Have already earned trust and credibility, which are not so easy for salespeople to gain.
  • Shorten their sales process: They spend more time with customers and less time prospecting.
  • Ace out the competition: They score meetings while the competition is still trying to identify the decision-makers.
  • Convert sales prospects to clients well more than 50 percent of the time (typically more than 70 percent).

No other sales or marketing strategy comes even close to referral results.

Your Team Isn’t Asking for Referrals

Every sales executive agrees that referrals are the best way to generate qualified leads, shorten the sales process, and increase close rates. Yet according to CSO Insights, two-thirds of firms are missing out on this powerful prospecting strategy.

When asked to evaluate their teams’ ability to generate referrals, the number of sales leaders who said “needs improvement” outnumbered those who said “exceeds expectation” by more than 10:1.

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What does CSO Insights suggest? “Put a formal referral program in place and measure the results.”

I couldn’t agree more.

A Referral Program Is Your Missing Link

The sales world has changed, buyers have changed, and technology has changed. You must change your prospecting model to blow past the competition and decrease your cost of sales.

Your marketing department does an adequate job of lead generation, but many of the “so-called” leads aren’t qualified. Sales reps must take responsibility for generating their own qualified leads and scoring meetings with decision-makers. And the best way to do that is by asking for referrals.

It’s time to make referrals happen every single day. How? By implementing a strategic referral program with skills, metrics, accountability for results, and an immediate integration into your sales process. You can anticipate a dramatic increase in qualified leads, shorter sales cycles, bigger deals, higher conversion rates, and more loyal clients.

Referral selling means transforming your sales and prospecting approach. This takes time and effort. But ask yourself: What is a 70 percent conversion rate worth to you?

Ready to put a referral program in place for your team? Contact me at joanne@nomorecoldcalling.com or call (415) 461-8763.

Connect with No More Cold Calling

Follow Joanne on Google+ or Twitter @ReferralSales, or connect on LinkedIn and Facebook.

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