question markWhy would you ask a competitor for a referral? It almost sounds ridiculous-until you think about it. Maybe you have a solution that your “so-called” competitor doesn’t have. Perhaps your competitor doesn’t have the bandwidth to service a new client and can use your talent. Perhaps the competition has expertise in an industry that you have not been able to penetrate.

New Rules, New Referral Opportunities

Why ask your competition? Sometimes government regulations prohibit you from working with a particular client. In the United States, the Sarbanes-Oxley Act prevents accounting firms from auditing and consulting within the same client company. Accounting firms that used to be fierce competitors are now proactively identifying one other (where they can) to refer business. In this case, government regulations have opened up a new world of sales. Welcome to the world of “Who Thought that Would Ever Happen?”

There’s a similar trend in technology companies. With the move to software as a service (SaaS), the sales cycle is longer, and companies are becoming more and more specialized. They must decide to partner with former (and sometimes current) competitors, and determine how they will work together on a long-term engagement. This opens up many interesting sales strategies for discussion.

Benefits of Competitive Referrals

I always talk about referrals: It’s what I do. By developing and following a Referral Action Plan you can:

  • Convert more than 50% of your contacts into clients
  • Attract new clients without any marketing costs
  • Get clients who pay the bills and increase your profits
  • Taken one step further, by offering a referral your competitor, you can:
  • Gain an introduction to a new or previously impacted industry
  • Become your clients’ “go-to” expert and resource
  • Expand your sales network reach and depth
  • Boost your industry reputation as an insightful and creative collaborator
  • Become a trusted partner
  • Win, win, win!

Granted, you may not be the first to refer a competitor. Smart sales pros always look inside first: what do you have that could be positioned, modified, expanded to address your customers’ business issues? However, the benefits of a competitive referral often outweigh your concern. Consider a staffing company that specializes in administrative placement. Perhaps a client asks the company to find an individual who is outside of their traditional realm-a financial analyst, for example. Often, one staffing company will work out an arrangement with another if they don’t have the right candidate, because their only goal is to find the best person for their client.

Top-Notch Client Care

When you really care about your clients, you dedicate yourself to finding the best solution for them. You look for opportunities to refer and to add value. One of the greatest things you can do for your clients-and for your reputation-is to be a trusted and valued referral resource.

New technologies and new delivery mechanisms have changed the landscape of sales. Companies in every industry are looking to scale without a heavy financial investment. The obvious solution is to partner with companies with whom you can collaborate to provide a complete solution to your customer.

Decide to look at things differently. Do things differently. Reach out to your relationships, and don’t rule out your competition!