But here’s what they’re missing on referral B2B lead generation.
Suddenly, everyone’s on the referral bandwagon for sales lead generation. However, most sales “experts” get referrals all wrong. I’ve had it with all the referral myths and misunderstandings—which include, but are not limited, to:
- Referrals don’t scale
- Referrals are a favor
- Referrals can be digital
- Referrals are easy
- All you need to do is ask for referrals, and you’ll get them
Don’t believe this crap!
Setting the Record Straight on Referral Sales Lead Generation
I don’t usually use the word “crap” in my writing. But you better believe I use it when I speak with my colleagues … and yes, my clients. I also don’t usually dedicate much blog space to tooting my own horn. Instead, I prefer to focus on sharing insights and tips for referral sales lead generation. But due to some recent conversations and social media comments, and some crappy articles I’ve read about referral selling lately, I’m all fired up and ready to speak frankly.
It reminds me of when social media became popular. Remember when LinkedIn “experts” came out of the woodwork? Suddenly everyone was the top expert, the go-to person for social media selling. Most of those people are long gone. The ones who remain have true expertise that’s enabled them to stay current over the last decade. It’s the same with referrals.
I’ve been spreading the word on referrals for 25 years, based on my feet-on-the-street research. But now there’s data to back me up. The latest—summed up in Hubspot’s 2021 Sales Enablement Report—shows that referral leads have at least a 30 percent higher conversion rate than leads from any other channel. For B2B companies, it’s 70 percent higher.
And now the “experts” are coming back out of the woodwork, this time telling people to get referrals. The problem is, they don’t tell you how.
I’m not saying I’m the only one who knows what it takes for companies to adopt referral selling. I’m saying don’t believe everything you read or hear. There’s a reason I’m recognized as America’s leading authority on referral selling and a thought leader on social media.
I’m going to refute these ridiculous accusations for one reason only: Sales leaders say their biggest challenge is to generate leads. They leave out one important criteria: qualified lead generation. They don’t want a pipeline of smoke and mirrors. They want solid, qualified sales leads, and referrals deliver just that. Sales lead generation tools are everywhere, and they’re all digital. Sales leaders recognize that referrals are their best business, yet they continue to come up with preposterous excuses.
I’m Old School
I’m a lot older than most of my clients and colleagues. In fact, my kids are older than many of them. But just because I’m “old,” doesn’t automatically mean I’m old-fashioned.
(Image attribution: cottonbro)
I don’t use technology like a Millennial, but I don’t need my grandchildren to explain how it works. I joined LinkedIn in March 2004 and Twitter in May 2009, and I often write about the benefits of social selling (and the pitfalls).
But I readily admit that I am old school in many ways. I believe that business is closed because of the relationships we develop and nurture, the trust we build and the friendships we make. That means a phone call, video call, and most importantly, face-to-face meetings. A huge problem today is the belief that sales lead generation can be automated. Technology is an important tool. We know that sales reps who leverage technology such as AI and predictive analytics are more productive and successful than those who don’t.
However, customers don’t buy your technology, your service, or your products. They buy because of the impact your people have on their businesses. People do business with people, not with technology. But too many reps forget it’s the quality of relationships, and not the quantity of connections, that really count.
That’s not old school. It’s just how B2B lead generation works.
Referrals Can Be Digital
It’s OK to write to someone on LinkedIn or send an email and ask if they know the person you want to meet. But that’s where digital referrals stop. Never, ever ask for a referral in any digital format—that includes email or social media. Why? Referral selling is personal. When people refer you, they’re wagering their reputations, so they must be confident that you will provide insights, won’t pitch, value the trust they have in you, and have stellar follow-up. Equally important, they need to know the business reason to refer you—that you have something valuable and relevant to offer the prospect. And that’s why asking for referrals requires a conversation.
A conversation also enables you to gather “intel” from your referrers. Find out how they know your prospects, what’s important to your prospects, what their challenges are, what they value, how they communicate, and what might get in the way of your sales success. You won’t find answers to any of these questions on social media. Plus, if you don’t reach out to your referral sources, you also miss the opportunity to reconnect and learn what’s new with them.
You can automate your sales process, but you can’t automate relationships. You must earn the right to ask for referrals. And that’s why I ignored this request from someone who invited me to connect on LinkedIn:
I was keen to connect as we are in the same business. One of my big goals is to speak on stage in the US. Do you happen to have any contacts that I could speak to, to make this happen?
Referrals Don’t Scale
This is the most egregious accusation of all … because it’s a lie. Let me clarify. I don’t work with SDRs or BDRs because their roles are transactional. Account executives—whether in the SMB, mid-market, or enterprise space—are charged with generating leads, getting into accounts, building relationships, doing top-notch work, and measuring the impact of their solution. Enterprise reps need to expand into other divisions in the organization.
A sales lead generation technique like this easily expands. How many clients do any of these reps need? 100, 50, 20, 5? It’s not thousands. Do the math. Say they need 20 new clients. Now quadruple that and ask 80 people for a referral. Conservatively, say half would like to help, but either they can’t think of anyone, or you haven’t clearly described your ideal client. Forty people make an introduction. With a minimum 50 percent referral conversion rate, there are your 20 new clients.
Remember, these reps are still going to get sales leads that convert from inbound calls, demos, webinars, podcasts, conferences, and networking events. But referrals are an intentional, proactive prospecting approach that sales reps own, and where all leads are qualified leads. That’s how referrals scale.
Referral selling is a daily discipline with goals, sales metrics, and accountability for results. Each salesperson determines the number of people they will ask for referrals each week. They tap into the connections of everyone in their company. Who does the CEO know, the mail clerk, the customer service representative?
When we receive a referral introduction, we convert that prospect to a new client more than 50 percent of the time—most sales pros tell me it’s more than 70 percent. And that’s without factoring in the power of the new relationship, reduction in our sales process, eliminating the competition, and reducing the cost of sales.
(Image attribution: Anna Nekrashevich)
How would you rather work? Cold calling prospects or talking to people who want to talk to you?
Referrals Are a Favor
Let’s get the facts straight. Asking for a referral is NOT asking for a favor. When we ask someone for a favor, we’re asking them to do something that benefits us, and us only. Referrals benefit everyone involved.
Think of all the referrals you easily and willingly provide: You tell people about a great restaurant, a terrific movie, a top mechanic, and the latest app for your phone. You give referrals all the time, and you don’t consider it a favor. Think of people you know well. You like them, trust them, and know they’re good people. If they ask you for a personal or a business referral, you’re happy to provide it, because you know they have something valuable to offer your connection, which makes you look good in the process.
The great truth about this sales lead generation technique is that people like referring people they know, like, and trust. It feels good to connect people, and they become a trusted resource in the process. If you must use the word “favor,” the favor is presented to the recipient of the referral. That is, of course, if you have something valuable to offer, and are likeable and trustworthy.
All You Need to Do Is Ask
The internet is replete with articles and webcasts that tell people to just go ask for referrals, like it’s common sense or something. (It’s not.) One author stated that 20 percent of a company’s clients should come from referrals. (Only 20 percent?) If only 20 percent of your clients were referred, then your team obviously hasn’t learned how to ask for referrals, which means you’re missing out on your prime source of qualified lead generation. Now that’s not a very productive B2B lead generation system.
Sales leaders tell their reps to go out and ask for referrals, and they wonder why no one is asking. Therein lies the problem. A big problem with referral sales lead generation. It’s the misguided belief that telling translates to doing.
One company brought me in to determine why their reps weren’t asking for referrals. Everyone had a sticky note on their monitor that said, “Ask for referrals.” But no one was asking. The answer was obvious. Telling doesn’t work.
Data shows that referral selling has the highest conversion rate of any other prospecting system. Why waste time doing anything else?
What Does Work for Sales Lead Generation?
Building a referral culture, creating a referral system, and learning how to ask in a way that gets results. Introduce your team to the power of referral selling. Invite me to deliver my popular presentation: “Referrals Are Retro: How to Build a Referral Culture in a Digital World.”
Also, please invite me to connect with you on LinkedIn. Send a personal message, so I know who you are. We’ll start a conversation and begin a relationship. You can also follow me on Twitter@ReferralSales.
(Featured image attribution: Suzy Hazelwood)
(This post was originally published on October 4, 2018 and updated September 28, 2021.)