You know referrals are a great way to sell. There are varying statistics on the conversion rate of referral sales, but it’s generally agreed that they convert somewhere around 50%. Much more successful than cold calling. Unfortunately, too many salespeople don’t ask for referrals or squander the referrals they get.
Do’s and Don’ts of Selling to Referrals
Do: Ask! You won’t get a referral unless you ask for one. According to Nielson, the advice of friends or family is the most persuasive factor when buying new products. If your customer or colleague knows someone interested in your product, that endorsement will make a difference.
Don’t: Ask at the wrong time. Make sure your customers are happy – and happy for a while – before asking. You want to make sure they’re stable and reliable customers who love your service before reaching out for a referral.
Do: Respect the relationship that exists. Don’t do anything that would jeopardize your contact’s relationship with the prospective customer.
Don’t: Rely on customers, coworkers or partners to come up with someone to refer. Do your research and see who they know and who you might want to reach out to. Did your coworker work at a previous company with prospective customers? Is your customer’s company owned by a larger company you want to do business with? Look into these connections before you ask.
Do: Be specific about what kind of customers you are looking for. This ties in with the last piece of advice. Make sure to specify if you need SMB customer or enterprise, US or UK, etc. The last thing you want is for someone to go through the trouble of making a referral for you, only to realize that that prospect is not qualified.
Do: Ask for an email or call introduction. Getting the referrer to reach out to the prospect him or herself is much more valuable than you simply calling and using his or her name.
Don’t: Take the deal for granted. Just because you have a referral doesn’t make it a sure thing. Don’t be too pushy trying to get the deal to close quickly.
Do: Keep the referrer apprised on the situation. If the deal works out for you be sure to send them a thank you note or small gift.
Do: Give referrals when you have good service. It’s only fair.