Just because clients are willing to refer you doesn’t mean they will.
“Turn 70 percent of your prospects into customers with referrals.” That statement got my attention—not just because it sounded too easy, but because I wasn’t sure where the data came from or how accurate it was. Sure, referral leads are top-notch, but they don’t just appear. That kind of referral success rate requires a disciplined referral program with skills-building, ongoing coaching, and accountability for results.
I dug a little deeper and learned the statistic referred to the Net Promoter Score (NPS)—a tool many companies use to survey clients about their willingness to recommend these businesses to others. And therein lies the problem: Referrals and recommendations are not the same thing.
NPS may not be what it’s cracked up to be, according to Ron Shevlin on Forbes. NPS provides relevant data that measures how well customers like us and our products. It can make us feel good about the work we’re doing … or not, depending on the results. A high NPS is certainly a good start, but without follow-up, it amounts to nothing but bragging rights.
If You Don’t Ask, You Won’t Get
The misconception is that customers who score us highly will automatically send us referral leads. After all, they said they’d be willing to recommend us. But willing and doing are entirely different things.
Sure, sometimes we’ll hear from a prospect who was recommended, but referrals don’t just happen, at least not at scale. Why? Because we are not top of mind for our customers. They have their own jobs to do and lives to lead. Just because they think highly of us doesn’t mean they think of us often.
Reality check: A recommendation is just that. A client is willing to recommend us, but unless we ask, they probably never will. It’s our job as sales reps to turn each potential recommendation into a sales qualified lead.
From Willing to Referring—What It Takes to Get Referral Leads
I was intrigued when the head of sales at a prominent investment house raved about his company’s high NPS, which the team sent out to customers twice a year. When I asked what his sales reps did with this important data, his answer was “not much.” Customer success reps were supposed to call and follow up, but he wasn’t sure if that happened, and he thought they sent thank-you emails. He was chagrined that the firm received no business at all from the survey. (Yet they continued to implement it year after year. Hmmm…)
Smart companies realize that customer success has a new, strategic role in sales development. They are the group that is closest to our customers and that has developed strong, trusting relationships with them. Yet, we haven’t included them in our sales development strategy. They are our #1 client facing resource, yet we’re leaving them on the bench.
It’s no wonder that customer success didn’t follow up with the positive NPS scores. They weren’t asked to do so, they didn’t know the questions to ask the customer, they didn’t know how to ask clients for referrals, they had no goals, and they weren’t accountable for reporting back on conversations.
What’s even more absurd is that this investment house continued to send out the survey.
If your clients are willing to refer your company, you’re primed for sales success. But unless you actually follow up and ask for referral introductions, you’re wasting those opportunities to develop sales qualified leads.
After all, your clients aren’t mind readers.
How to Turn Data Into Deals
Your NPS could be one of your best referral marketing tools, but data is useless unless human beings act on it. To turn NPS data into referral leads, you need a systematic plan for follow-up. Here’s where to start:
- Create a step-by-step plan for following up. (Who should be involved? What should they say or do? What’s the best cadence? When should each activity occur?)
- Decide on the best person to contact each customer, based on who has the strongest relationship.
- Enroll sales reps and customer success in a referral program that will teach them the skills, behaviors, and processes needed to ask for and receive quality referral introductions.
- Emphasize that by reaching out to possible referral sources, salespeople have an important opportunity to strengthen client relationships and thank them for their business. Frequently these conversations also lead to more business with existing clients.
- Measure the number of referral leads received and the amount of new business booked. (Metrics let you know your referral-selling efforts are working, which inspires salespeople to continue making referrals a priority.)
Your current clients are your best source of new business, but they don’t automatically know that you want more clients or that you would appreciate introductions to their connections. Don’t rely on recommendations. Enroll your current clients as active referral sources and keep your pipeline full of sales qualified leads.
How can you ask for referrals in a way that gets results? Start by testing your referral savvy. Sign up for my Referral Selling Insights and gain access to the Referral I.Q. Quiz. It’s 14 Yes/No questions, and people find the results enlightening. This is your checklist for referral selling and will start you down the right path.
This post was originally published on August 25, 2015 and updated June 18, 2020.