Why referrals work

- You're in sales. I'm in sales. It's tough out there and it's only getting tougher. It's harder to reach decision-makers, harder to generate qualified leads, and even harder to differentiate from our competitors. More decision-makers are involved in the buying process. Because of this, our sales process drags on and on, and that deal we forecasted gets postponed along with our commissions. Imagine mitigating these challenges. The good news is you can with referral selling. A referral is defined as receiving an introduction to your target prospect. It could be from a friend, a colleague, a client, or a mutual connection. Let's walk through the five reasons why referrals work and why you should consider them a part of your sales process. First, your prospect arrives pre-sold. Sure, that's a strong word, but that's exactly what happens. Your prospect knows who you are, the business reason for taking a meeting, and they expect to hear from you. Why? You've spent time with your referral source and learned about the challenges your prospect faces. You get the introduction. You get the meeting. Second, you've already built up credibility. Someone your prospect knows and trusts has vouched for you. Credibility and trust are not easy for sales people to earn. Our sales profession has gotten a bad rap from pop culture and from the proverbial pushy and arrogant used car salesman. A referral introduction dispels this stigma and builds up credibility. Third, your sales process shortens. Think about it. Where do you spend your most unproductive time? I bet it's prospecting. We're sales people. We excel at asking probing questions, challenging conventional thinking, revealing undisclosed needs, gathering a team, and involving all decision-makers and influencers. And then the payoff, we close the deal. Who wants to spend time prospecting when it's taking us away from what we were hired to do? Fourth, your competition disappears. Well, most of the time. A referral gets you in early, many times before your prospect knows they have a need. You learn secrets no one else does, and you build solid relationships that your competition can't break. If you do have competition, you have the inside track. You have an influencer and decision-maker on your side. If they're required to send out a request for proposal, an RFP, you help craft it and your competition has no clue. Lastly, your conversion rate soars. When you received an introduction to your ideal prospect, what percent of the time did that prospect become a new client? Most sales people say it's more than 50%, and many say 70% and more. But many reps hide behind technology. Some even say they don't need to talk to anyone. Those of us who get introductions and have conversations close deals. No other strategy comes even close to the power of referral selling. Yet 95% of companies don't have a disciplined, systematic, measurable referral system with skills, metrics, and accountability for results. Instead, referrals are ad hoc. Once in a while a satisfied client will send over a referral. Seems preposterous, doesn't it? You have a choice. If you're getting the results you want, there's no need to change. But if not, referrals should be hardwired into your sales process.