CHAPTER 16
Referrals and Other Major Pipeline Builders
Companies must select new vendors, whether to provide something new or to replace an existing vendor, on a regular basis. A few years ago, my company did a vendor review to determine if we should move to a new website design and hosting company. We believed the service of our current web company was up to standards, but until we looked at options we couldn’t be certain. We went through the review process and ultimately chose to remain with our current vendor.
Fast forward to today and we’re in the process of switching vendors, based on the quality of the work we’ve seen from a web company one of our business associates has used. I’ve watched for some time the quality of work they do, and in conversations with my business associate I have learned how pleased he has been with this company. The process of switching began with me contacting the vendor. That’s a shame—the vendor could have landed the business several years earlier if they had only reached out to me. The problem was they didn’t know I existed, because they never bothered to ask my business associate for referrals.
I share this situation because it hits close to home with too many salespeople and customers. I was in a situation where my current vendor wasn’t doing anything wrong to warrant me dropping them, but they also weren’t doing anything awesome. Put another way, there wasn’t enough pain or gain to warrant a move. This is where salespeople drop the ball. If only the web company my business associate was using had taken the time to ask for referrals (which I know my business associate would have been happy to give!), it could have reached out to me several years sooner. They would have had an additional client, and I would have been receiving better support.
Why Aren’t You Asking?
Most salespeople are hesitant to ask for referrals. I believe it’s due to a lack of confidence in how the customer might respond. The salesperson isn’t just concerned they won’t get the referral, but also that merely asking for the referral will damage the relationship they have with the customer. The salesperson choosing to forgo the referral process is making a major mistake, as they don’t benefit from what the process has to offer.
Asking for referrals does several things for the salesperson. Naturally, the biggest is the salesperson gains access to high-potential prospects, but asking for referrals also helps strengthen the salesperson’s relationship with the customer. When you ask a current customer for a referral, the customer has a choice: they can either give you a referral or say “no.” Sure, there are variations on both, but to keep things simple, it comes down to a yes or no. Regardless of how they answer, they first have to think about the relationship they have with you. The simple action of the customer having to think about the relationship they have with you is huge. I’ve found on numerous occasions when I’ve asked my own clients for referrals, it winds up creating additional conversations about how working with me has benefited the customer. Think about this for a moment. The customer winds up making positive comments about you and your company, which end up strengthening the feelings they have toward you.
Each time I’ve asked for a referral, I have come away a better and more productive salesperson. Do I ask all of my clients for referrals? No. Let’s put the cards on the table. I have had some customers I’ve never asked for referrals. In these instances, the reason was the profile of the customer led me to believe that any referral they would give me would likely not fit the profile of the prospect I sought. The worst thing you can do is ask for a referral and then not maximize it. Years ago I met Roger, who was a dynamic life insurance agent. He was without a doubt a class act. The first time I met him, he blew me away with how much he already knew about me and even what my expectations were. I came to rely on him, as his advice was spot-on and everything he said and did exuded confidence and trust. Roger found me through a referral from another person. He was open about his desire for referrals, and over the course of several years working with him I gave him a number of them. It was easy to give him referrals, because I trusted him and I wanted others to benefit from his expertise, too.
Since meeting Roger, I have never encountered another person who used referrals as efficiently as he does. Roger was incredibly successful with referrals for three reasons. First, he did a great job taking care of his customers. Second, he knew when to ask for referrals. Third, he was always appreciative of referrals and kept everybody in the know regarding how he was handling them.
The Four-Step Dance
Just because the example I used is a B2C, don’t think for a moment you can’t leverage referrals in a B2B environment. You can! The steps are exactly the same. The activity of asking and leveraging referrals comes down to four simple steps. The steps are so easy, and I believe they will make you as much money as, or more than, any other strategy in this book. There is nothing complicated about any one of the steps; you simply must be disciplined enough to carry them out.
FOUR-STEP REFERRAL DEVELOPMENT
1.Ask for referrals. Every time the customer sees value in what you’re selling is a time when you should ask for a referral.
2.Connect with the referral. Ideally, the person who gives you the name will connect the two of you through an email or phone call. Even if that is not the case, following up as soon as possible is showing respect to the person who referred you.
3.Keep the person who gave you the referral in the loop. Don’t keep the person who gave you the referral in the dark. By keeping them in the loop, you will encourage them to provide you with more referrals.
4.Be appreciative each step along the way. Nothing you do will create more referrals along the way than showing appreciation to each person in the process.
STEP 1: Ask for Referrals
To become good (and when I say “good,” I mean really good), you must make asking for referrals part of your selling process. Financial planners and those in a B2C environment tend to be better at this, but as I said earlier, the process is the same for B2B and the rewards can be just as great.
Ask for a referral any time your customer has seen value in what you provide. Yes, that is typically going to be after you’ve sold them, but don’t think that is the only time. Many times in B2B sales, the selling process can extend over a long period of time. Use the periods where the customer sees value in what you provide as an opportunity to ask. For example, say you come out of a productive meeting with your customer regarding your proposal, and the customer has complimented you on what you’ve shown. Asking at that time for somebody in another division or operating unit to whom you should talk is certainly appropriate. You’ll either find yourself with a name, or they won’t provide one—either way, they will respect you for your confidence. The only time I would not ask is if the sale you’re working on is so significant to both your company and your customer that maintaining one hundred percent focus is not just expected, but essential.
Ask for a referral immediately after gaining an order. This is the most natural time, but even at this phase it’s amazing how few salespeople actually do it. The fact that we as a sales community do not ask for referrals after each sale says a lot about the lack of confidence many salespeople have in what they do.
Ask for a referral within a set period of time after the customer has bought from you. The nice thing with this is that not only can you do this, but your customer service people can, too. Many times during the start up, installation, and/or early days of the sale, your customer service team is more involved with the customer than you are. Coach the customer service people to ask for referrals. It’s always interesting how many times an unassuming customer service person can gain an amazing number of leads and referrals.
Have an annual schedule you follow to ensure that someone from the sales team follows up with all customers to gain referrals. It’s easy to forget about asking the good customer you’ve had for years for referrals. By having a dedicated time or process, you will be far less likely to let the good customer slide off your referral radar screen.
For customers who are buying from you on a regular basis and with whom you have regular communication, asking for referrals must be an activity you do regularly. My suggestion is that you intentionally ask every six months, or any other time you’re with the customer and the conversation lends itself to asking.
KEEP IT SIMPLE
The art of asking for a referral is keeping it simple. The best approach I’ve found is wrapping the request around one of two things: either ask for a referral as you confirm a key benefit the customer values, or ask when you are seeking overall feedback on you and your company. Here are three examples that you can use to develop an approach that works for you and your industry.
“You mentioned how much you appreciate the way we are helping to automate your systems. I suspect you know other businesses that would benefit in the same way you do, right?”
Notice how in my question, I made the assumption the person knows others. It’s amazing how by merely crafting your sentence using an assumptive approach, you can generate referrals.
“How is our new system working for you? I’m thinking you’re already seeing the value in it. I’m sure you know of others who would benefit in the same way. Who pops into your mind?”
This second example allows for the customer to share with you any number of things that ultimately will help you ensure you’re meeting their expectations. The beauty is you are achieving two things: meeting their expectations and gaining referrals.
“It’s great how we’ve been able to build a plan that allows your family to achieve the financial goals you’ve wanted for so long. Would you know other families that would benefit from similar plans?”
The important thing is to not overcomplicate it. Keep it simple, so it becomes a regular part of a conversation you have with customers.
STEP 2: Connect with the Referral
Your best way to connect with the referral is by having the person giving you the referral personally connect the two of you. There are some people who will say the best approach is to make the request to connect the two of you as part of the initial request for a referral. Personally, I don’t like that approach, as it can come across as asking too much of the customer at one time. My feeling is one of the reasons salespeople don’t ask for more referrals is because they believe you have to ask for the connection at the same time as the initial ask. It is possible, though, for these two actions to happen separately.
When you do ask for the connection, make it easy. After the customer has given you the name of somebody, thank them and then ask what in particular they feel the referral would like best about what you offer. This now makes the customer feel important, because you’re asking for their input. After they’ve shared with you what they feel the person to whom they are referring you will like best, then take the time to ask if they will make a personal introduction. How they make the introduction is up to them, and I will always default to what the customer prefers. Typically it tends to be an email introduction, but just as often it is a phone call, social media message, text, or face-to-face meeting. The key is to ask them to do it and, at the same time, to get the referral’s contact information. I will say that with the level of resources available via the Internet, it’s not too hard to locate anyone’s contact information, but getting it from the customer is still the best approach.
When the customer gives you a name, it is absolutely essential, regardless of how the introduction is made, to ask for their permission to use their name (if they are not willing to make the introduction themselves). If they say you can’t use their name, I’ll leave it up to you to determine if the referral has merit or is simply a name they’re throwing out to keep you happy. Regardless of how your conversation goes regarding referrals, you must show appreciation to the person. One way to show appreciation is by asking how you can help them. It might be giving them a referral. If it is, make sure to not just give them any referral you can think of quickly just to return the favor. No, your objective is to go above and beyond.
STEP 3: Keep the Person Who Gave You the Referral Up to Date
This is easy and fun, yet despite this I’m amazed at the number of salespeople who ask for referrals but never follow up to keep people informed. The person who gave you the referral went out of their way to do it. Don’t you think you owe them the respect of keeping them informed? Yes! Not only is it the right thing to do, but it’s also amazing how it will wind up creating more referrals for you.
How you choose to follow up is going to depend on the industry you’re in and people’s preferred methods of communication. The only rule I have is to make sure how you communicate back to the person who gave you the referral is by using the communication method they prefer most.
STEP 4: Be Appreciative Each Step Along the Way
This isn’t so much a separate step as it is a guiding principle used throughout each part of the prospecting process. Remember, the way you treat the person who made the referral to you will go a long way in determining if you get more referrals from the original person, not to mention the person referred to you. As long as you remember to treat others the way your mother taught you, you’ll do just fine.
Salespeople always ask me if they should compensate the people who give them referrals in some manner. Minimally, you should send a handwritten note. Whether it includes a gift is your call, based on your industry, company policy, the competitive marketplace, etc. The variables are too great for me to say what’s right, but I definitely believe you can’t go wrong with showing some appreciation.
Borrowing from the Best
Use anniversaries as a great way to gain new leads. This is a method financial planners and insurance agents use very well, but I contend it works for all industries. The process is simple: use the anniversary of when the customer first began working with you as a reason to call and thank them for their business, and follow it by asking for a referral.
A few years back, I was consulting with a regional bank and an approach we put in place was to call customers on both the commercial and personal sides of the business every six months. The objective of the call was to first gain referrals, but it also allowed the bank to gather feedback on its services, as well as sell additional products and services. The results were better than they had ever had on any other telephone sales initiative. The bank gained three ways. First, they received referrals. Second, the conversation with the customer many times went further, and the banker was able to provide the customer with additional products. Third, the banker occasionally would reach a customer who was not pleased with the service they had received, but didn’t think it was bad enough to actually contact customer service. This unhappy customer possibly would have gone undetected and moved to another bank if the bank hadn’t put in place a method to call current customers for referrals. Once the problems were revealed, it gave the bank the opportunity to address them and fix them, likely preventing the customer from taking their business to a competitor.
Blitz, Blitz, and Blitz Again
This approach is one I’ve had the privilege of putting in place in a wide number of companies across numerous industries in both B2B and B2C. Each time I first presented it I was met with skepticism, but without fail, each company that has used the process has been able to significantly increase their number of referrals and leads.
The approach is not difficult. The number one requirement is blocking time on the calendar far enough in advance to ensure there is time to make it happen. As the subtitle says, it’s a blitz. You contact each of your existing customers during three specific periods of time each year. Each contact is for a different reason. Here is what this looks like:
February/March: Referral Request
July/August: Customer Feedback
November/December: Appreciation
In February or March, contact all of your accounts and simply say, “Here at ____________, we’re having a referral blitz, and I’m contacting each of my accounts to ask them for the names of others who I might be able to talk with.” The approach is straightforward and works surprisingly well. When customers are told upfront what the salesperson wants, they often are more appreciative and helpful than if the salesperson beats around the bush while asking for something.
The next round of blitzing occurs in July or August. When you contact each of your customers this time, you focus on thanking them for their business and asking them about your company’s level of customer service. Your objective here is to get them to realize the quality you provide them and, in so doing, to get them to talk about it. Immediately after you thank them for their comments, ask them for the names of others who would benefit from the same service.
Your final round of lead blitzing occurs in the November/December timeframe. Again, you contact each customer. The focus this time is purely to network and wish them the best for the holidays (depending on when exactly you call them). Many times calls during this time of year will become more personal and conversational, as people tend to be more relaxed. Don’t forget to use calls at this time of year to find out their plans for the upcoming year. Again, this is an opportunity to ask the person with whom you are talking for the names of companies and individuals who also could benefit from what you offer.
Keeping your pipeline full is essential. More important than just keeping the pipeline full is keeping it full with high-potential leads. This is why I like tapping into existing customers for leads. Asking for referrals is one of the most efficient ways to gain new customers. Never stop believing in what you do and the benefit you provide your customers. Why would anyone give you a referral if they felt you didn’t believe in what you’re selling? At the same time, one of the best ways to increase your confidence is by having the raving customer give you the names of other people to contact.
My own goal when it comes to referrals is to always gain at least one new lead from each existing customer. Does this keep my pipeline full? No, but it gives me more than I would have otherwise.