There are reasons you’re not getting referrals.
How is your sales team generating qualified leads? Using power dialers, email, and social media to reach strangers who downloaded your whitepaper or watched your video, or whose name came from a bought list? Those aren’t qualified leads. You’re just multichannel cold calling.
Referred leads are the best leads. Sales pros know it, and research proves it. When you ensure that referrals come first in your business development plan, referral selling becomes a scalable and predictable prospecting strategy. Yes, your most predictable and measurable prospecting tool is your very own sales team, asking for referrals.
Qualified Leads Scale When Referrals Come First
Referral selling is the #1 way to build a strong pipeline and accelerate conversions. Because your team asks for introductions to exactly the kind of prospects they want to meet, they only meet qualified leads.
B2B buyers want to work with salespeople who’ve been referred. In a 2019 Hubspot survey, 55 percent of B2B buyers said “word-of-mouth referrals” were their single best source of information when purchasing business software.
Across industries, business prospects are 5X more likely to engage with salespeople who’ve been introduced by a mutual connection, according to LinkedIn. And once you secure their business, referred customers have a 16 percent higher lifetime value than customers who weren’t referred, according to Wharton research.
Yet, despite all the compelling evidence that referral selling should be the priority for sales organizations, it’s not. In my experience, 95 percent of companies don’t have a business development plan with a measurable referral process.
Referrals only scale when every member of your sales team asks every client for referrals. But you can’t just tell your reps to ask. For your team to make referrals happen, you have to show them how. You need a systematic, disciplined referral-selling strategy that includes goals, metrics, and accountability for result.
Don’t believe referrals scale? Then you don’t understand referral selling, and obviously, referrals don’t come first for your organization.
From Lucky Break to Proactive Prospecting
Once in a while, you’ll get a bluebird. But what if referrals weren’t just a random, lucky break? Imagine the impact on your sales, revenue, and profits if your team asked every single customer, colleague, and friend for referrals. That’s how you scale referral selling and ensure referrals come first.
Still skeptical? For the past 24 years, sales leaders and salespeople have told me that when they receive an introduction to a prospect, they close business at least 50 percent of the time (most say 70 to 90 percent).
Here’s how the numbers add up (a conservative estimate) if your goal is to get 20 new clients:
- Ask 80 people for referral introductions.
- Half of them make perfect introductions for you. (The rest can’t think of anyone right now, or maybe your relationship isn’t as strong as you thought. Bummer.)
- With a 50-percent conversion rate, you soon have 20 new customers.
And they’re not just “any” customers. They’re your ideal clients. The ones with the big bucks. The ones who value what you offer, treat you well, tell the truth, and pay you on time (maybe even a little early). Not only does your sales process shorten, but you’ve built new and stronger relationships with your network. You haven’t added to your payroll, and your competition is non-existent. You bet referrals are predictable!
5 Reasons You’re Not Getting Referrals
Your team knows a lot of people, who in turn know a lot of people. So, why aren’t they getting referrals at scale?
(Image attribution: Moose Photos)
1. Who Are They Asking?
Your team hasn’t identified everyone they know. Their job is not to evaluate whether people would be great referral sources. Their job is to get their contact lists together. Your job as a sales leader is to help them understand that everyone knows someone, and referrals often come from the most unexpected places.
2. When Are They Asking?
Many salespeople wait to ask for referrals until they have closed a sale or implemented their solution. This harkens back to old insurance tactics, when an agent would deliver a policy and then ask the client to send a letter to 10 or 20 of his best friends. That’s a disrespectful ploy—and a waste of valuable referral opportunities. Reps can ask for referrals anytime during the sales process when they deliver value. How will they know they’ve earned the right to ask? Most likely, the client will say “thank you”—for a good idea, for delivering useful information, or for sharing expertise.
3. How Are They Asking?
Most salespeople ask for referrals this way: “If you know anyone who would benefit from my services, please send them my way.” This does nothing except allow reps to say, “Phew, I asked. I can check that off my list.” The better approach is for salespeople to describe their ideal client and then ask, “Who are one or two people I should meet who fit this description?”
4. Are They Asking for Introductions?
It’s not enough to just get names and contact information. Without introductions from referral sources, reps fall into the cold-calling trap. If prospects don’t know them and don’t expect to hear from them, their outreach is ice cold—whether they’re communicating via phone, email, social media, or an old-fashioned knock on the door.
5. Do You Have a Referral Process?
If you’re just telling your reps to ask for referrals, you might get a live one now and again. But that’s not a prudent method to grow revenue. Want predictable outcomes? Integrate referral selling into your sales process.
Do you have:
- A written referral sales plan?
- Written weekly referral sales goals—for individuals and for the team?
- Referral metrics and a system to track results?
- Accountability for results?
- A system in place to reward employees for generating referrals?
If you answered “yes” to all of these questions, congratulations! If you answered “no” to even one, it’s time to ditch prospecting tools that don’t work. You know, the ones you’ve always used—the ones that rely on technology to get meetings. It’s time to think differently. Technology only takes us so far. It’s personal relationships that seal the deal. Isn’t it time to create a disciplined, measurable referral system?
Forget Cold Calling—Referrals are HOT, HOT, HOT
Referral selling transforms everything it touches. When you commit to referral selling, integrate asking for referrals into your sales process, and ensure referrals come first, your team will bring in more qualified leads, foster better long-term relationships with customers, decrease your cost of sales, and generate more revenue than ever before. Why would you spend time doing anything else?
Start by taking my Referral I.Q. Quiz. This 14 Yes/No question assessment will not only help you evaluate your sales process and understand the reasons you’re not getting referrals; it’s also your checklist for referral selling.
(Featured image attribution: Pixabay)
Talk to Joanne about how to improve your team’s referral selling skills. Choose a date and time to schedule a complimentary 30-minute call.
(This post was originally published on June 5, 2015 and updated September 10, 2020.)