Here’s how to actually win with referral sales strategies.
More than 90 percent of salespeople convert at least half of their prospects to clients when they get referrals. And another 60 percent report a conversion rate of more than 70 percent.
These stats are from a recent webinar I conducted— “Turn Cold to Gold.” I asked the same question in a different webinar, and 80 percent reported turning at least half of all prospects into clients when they get referrals.
Either way, the results are impressive. No other prospecting method competes with referral sales strategies.
The Referral Stats Have Changed
There’s been a huge jump in referral conversion rates. They held pretty steady at 50 percent until the last three years. Now the majority of sales reps say they convert more than 70 percent when they get referrals.
Why are sales reps now even more successful when they get referrals? I haven’t found any research that provides a definitive answer. But I have a theory.
Referrals have always been sales professionals’ greatest competitive advantage. When sales reps are introduced to prospects by people those buyers know and trust, they have immediate credibility. They sit on the “same side of the table” as their prospects. The conversation focuses on the buyer’s issues, what’s working, and what worked in the past that’s not working now. Sales reps uncover the biggest business dilemmas prospects need to solve (which aren’t always the first issues they verbalize) and offer solutions.
Simply put, referral selling means having conversations and building relationships … and that has become a rarity in the digital age.
Do You Have a Referral Program in Place?
Your answer to this question matters … a lot.
Despite the proven results of referral selling, less than 6 percent of sales organizations have a systematic, disciplined referral program with strategy, skills, metrics, and accountability for results.
If sales reps convert well more than 50 percent of prospects to clients when they get referrals, why do only 6 percent of companies have a referral program in place?
This gap makes no sense. It’s costing your sales team precious time, and it’s costing your company money.
Why Referral Sales Strategies Work
Buyers want insights, not pitches, and referral introductions give us that opportunity. Granted, there’s a lot more at stake with referral selling. Our referral sources’ reputations are also on the line, so we’d better deliver. But that’s a challenge most salespeople find exciting and achievable … and worth it.
When sales teams get referrals, they get meetings with one call. They have the inside track on prospects and learn information the competition will never find out. That is, if they even have competition.
If you see the same gap in your sales organization, take the Referral I.Q. Quiz and have your sales reps do the same. It’s 14 “Yes/No” questions and should take only a few minutes to complete. It’s your checklist for referral selling. Then give me a call at 415-461-8763 or email firstname.lastname@example.org.