Early in my sales career, I thought a referral was nothing more than getting a phone number and a name from one of my customers. After calling a few of these supposed prospects, it didn’t take me long to realize that this was nothing more than a glorified cold call. Check that, calling it glorified would be unfair to the word itself.

The thing is, getting a “real” referral requires much more than asking for a name, phone number, or email address for a prospective customer. What you are really asking for (when asking for a proper referral) is for your customer to put his or her credibility on the line in order to get you in the door to make a sale. This means that your customer will need to communicate in some form (i.e. a letter or phone call) on your behalf to the referred party. If you obtain a referral without having your customer communicating on your behalf, all you have at “best” is a qualified prospect to call on.

When you think about referrals along those lines, the process becomes far more dynamic and difficult. However, the odds of successfully executing a sale or picking up a new customer will go up dramatically. Make sure to get your customers involved in your referral process by having them communicate on your behalf.

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As a sales manager, blogger, and podcaster I talk to a lot of sales people, and one question that comes up over and over again is: “How do I generate more referrals?” My simple response is ask more often. Sales people in general are looking for a silver bullet. What I believe most of them are looking for is a way to GET referrals without having to ASK for them. Are there ways to do it? Yes. Are most of them very effective? No!

The silver bullet in referral generation is simply to ask more often. That still leaves us wondering why don’t we as a group just ask? I think it boils down to two reasons: guilt and fear. For some, it is a feeling of guilt because they feel like they are inconveniencing the client, or some how doing something to the client. For others it it just a simple fear of rejection.

I think it is important to think about what you do for a living if you want to overcome this fear. Good sales people help people overcome problems in their life or business by providing creative and innovative solutions. Our job is to HELP people. So why would we be afraid to ask one person whom we have just helped solve a problem if they know anyone else with a similar problem? The truth is they most likely do, and if you have done a good job of being honest, helpful, and respectful they have no reason not to help you and a friend out in return. People like to help people, and in most industries it is no secret that we get paid on commission. If you have good rapport, and have done a good service, many of your clients will actually want to help you out by referring clients to you because they want to see you successful too.

Here are a few questions you should ask yourself:

• How do I help people in my job?
• What problems does my product or service solve?
• Are there markets that are difficult to work in that others are ignoring, that I could enter to help more people?
• What can I do to provide legendary customer service that I am not doing now?
• Are there ways I can better connect with my clients in a way that is honest, and genuine?
• Am I honestly concerned about the long term success of my clients? What Can I do to help them that I am not doing now?

There are probably more questions we could and should look at, but I think this is enough to get the wheels turning.

The real trick to generating referrals is to simply ASK. The trick is to do it in a way that is honest, and not gimmicky. Respct your customers and they will respect you. Help them and they will help you. All you have to do is ask, regularly and often.

PS: I just released a new sales podcast with episodes released weekly. Our goal is to interview some of the best and brightest in the world of sales management and leadership.

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If you are looking for ‘easy’ sources of business then I suppose ‘referrals’ aren’t going to be your cup of tea….but then again, if you are looking for easy sources of business then you aren’t likely to find the answers here at all.

In one sense, getting referrals is the most valuable source of leads for your business as recommendations are pre-qualified leads with a head start on any rivals for your business. By their nature a referral may be an introduction of your services to someone to whom the search for solutions has not yet happened. In such cases the position of strength in being backed up by a powerful ally is added to in connecting with a prospect at the very beginning of the sales process where alternatives to your services haven’t been researched. A referral at such a stage in the sales process gives a wonderful opportunity to become an established and important mentor to the new prospect and also a favoured candidate to winning new business. The importance of developing relationships from early stages in the sales cycle can’t be over emphasised as it is with most relationships – the more time involved in dealing with a prospect the more value can be given into establishing the business ties between sales person and purchaser. Referral selling is a means in which a chain of meaningful relationships can be created because of the very nature of getting early introductions to new prospects before they have started to look for alternatives.

Now to the difficult part. Getting referrals isn’t easy and requires a constant dedication and a continual source of value to your current client base. Not every client you dedicate your efforts into helping is going to produce referrals and some may never do so.

Firstly, if we look at the process of generating a referral one must have a happy client to get the referral from, but that won’t in itself get a referral. Your happy client must be voluntarily willing to produce the recommendation and also to champion your cause in getting the new business – which bizarre as it seems isn’t always a natural inclination in some customers. If you ask for referrals, then your client may not know the right prospects for your business at the right time… and when they do know someone right for your business it might not occur to them to pass this detail on to you.

One way of getting a referral is to make the objective of getting recommendations a part of your clients work as well. If your client sees getting referrals as beneficial to their business then there is more likelihood of focusing their attention in a way beneficial to you. This is never more so where you are dealing with customers who have partnerships with other companies and individuals. Partnerships, organisations and networks of business alliances are mutually beneficial in referral selling because if you add value to one organisation then the value you add to the next impacts on the first. Therefore, it is within the interests of the first client to get you to add the same value to any of their business partners as it will have a direct benefit to themselves as well.

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This article is an excerpt from the report “Building Your Client Base Through Referrals” – available for free download at www.lighthousebc.co.uk/referrals

Referrals Work. “Referrals from Colleagues” and “Referrals from Other Service Providers” were identified as the #1 and #2 method used by buyers of professional services to identify and learn more about providers in the 2009 RainToday.com Benchmarking Study “How Clients Buy”.

But in practice, few of us get enough high quality referrals. This article focuses on how to increase the number of referrals you and your firm receive. The full report covers how to ensure that these referrals are high quality and are likely to result in sales.

For many professionals, the quickest way to get more referrals is simply to ask for more. Although almost all professionals say they ask for referrals, studies¹ repeatedly show that over half of all customers claim they have never been asked. Those that do recall being asked often cite confusion over what they were being asked for – seeing the request as a suggestion or even a throwaway sentence.

The reality is that a great many professionals feel reticent about asking for referrals. They don’t want to be seen as a “pushy salesman” and they don’t want to risk endangering their current client relationship by asking for too much.

And they’re right to be wary. Asking for referrals too soon, in the wrong way, can result in a client feeling “used” by the professional.

Some of their reticence however, is driven instead by a fear of rejection. Few professionals enter their field because they are excited by the prospect of selling. In many professions – law and accountancy in particular – the early training and career development of professionals focuses almost exclusively on the technical aspects of their role and rarely provides adequate preparation for the inevitable transition into business development the professional must make as they rise in seniority. They are rarely equipped with the skills, and most importantly with the thick skin needed to face up to the prospect of rejection inevitably faced in selling situations. And asking for referrals is no different – there will be some clients who say no. However, gentle coaching can usually give professionals the courage they need to significantly increase the amount of referral requests they make. Challenging their assumptions and highlighting that the rejection is not of them as a human being can be helpful. And sometimes simply asking them if they would object to a someone who had provided a great service to them asking them for names of people who would also benefit, is enough to help them get a realistic grip of the level of risk involved.

Having said that, there are ways of minimising the risk to the relationship and maximising the chances of getting a referral.

Timing the Referral
The first of these is timing. Asking for a referral just after you’ve confirmed a sale is often recommended to product salespeople. But for a professional service firm it simply doesn’t work. Before they can feel confident giving a referral, the client must know that you can do a good job and that they can trust you. Giving a referral involves quite a high degree of risk to the client. If you let down the person they referred you to, their reputation will suffer. And the better the referral (to close colleagues and friends who place great trust in them) the higher the risk. Referrals must be earned by exceptional performance. Only after you have proven your capabilities can you ask for a referral and expect to be given names of people where they have the strong relationships you are looking for.

One valuable tactic to increase the number of these high value referrals is the concept of “Superpleasing” introduced by David Maister in Managing The Professional Service Firm. Maister highlights how professional firms are quite willing to invest thousands of non-billable partner hours into low ROI marketing activities; yet rarely consider investing partner time into “going the extra mile” for existing clients on current engagements. Maister is not talking here about marketing and relationship building activities with current clients. He’s talking about investing senior time, unbilled, into ensuring that current engagements overdeliver and “superplease” the client. He rightly points out that exceeding expectations on project work has far more impact on clients than any amount of relationship building meetings or hospitality. Yet most firms cut themselves off from this option by strictly segmenting project work – which must be done using billable hours – from relationship work – which is non-billable, but not allowed to support the project work. We’re not talking here about spending unbilled hours to do the basic delivery of the project. Instead, it’s a strategic investment of non-billable time to elevate an engagement from “meets expectations” to “exceeds expectations” in order to generate more future business.

The same principle applies to referrals. Deliberately investing non-billable time in overachievement of key projects for clients with a high potential to refer good business can really pay off. Again, timing is crucial – ask for the referral after “superpleasing” the client and they will be highly likely to reciprocate.

Preparing the Client for the Referral
In addition to timing the request for a referral for when you have overdelivered on your work, the number of referrals you get can be increased by preparing the client in advance.

At its most basic level this means avoiding surprising the client with a referral request and putting them on the spot for names without giving them time to think about it. Instead, treat the referral request as a two-stage process. Initially, ask the client about how they feel the engagement or service has gone and what aspects were particularly valuable to them. Then ask them if it would be OK to meet at a later date where you could discuss together who they know who could also benefit from a similar service. Then by specifying the type of person or business you would like to be referred to you give them time to think and to come to the meeting prepared with an initial list of names. You can also set expectations: “Typically most of my clients are able to come up with about 5 or 6 names of people who they think could really benefit from working with us”.

At a more strategic level, subtly reminding the client at key moments throughout your relationship that you are a “referral based business” can ensure that your request for referrals is not a surprise. It also activates their “antenna” so that they can be looking out for potential referrals for you over time.

Professionals who “warm up” their clients in this way, and who time their referral requests for when the client is feeling the most gratitude and satisfaction with their work can gain a minimum of 2 – 3 times the number of referrals to those who simply ask (and simply asking is more than most professionals do).

¹Cited in Paul McCord, Creating a Million Dollar a Year Sales Income Through Client Referrals.

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When ever we conduct a prospecting workshop, we ask how many of the participants typically sell to referrals they garnered; usually about 20% of the group raises their hand.  We follow up by asking how many proactively seek referrals, and no surprise, the same 20% raises their hand.  The obvious conclusion is that if you make it part of your day to day routine it will pay dividends over and over.

Despite this referrals remain an interesting phenomenon in sales, everyone is aware of their value, everyone insists it needs to be part of every sales professional’s tool kit, yet like getting the flu shot very few do more than talk about it; and even those that do utilize referrals for lead generation, don’t always do it in a way that allows them to fully monetize their efforts and opportunities.

I want to look at one specific aspect of referrals, one that generates discussion with even those who are in the 20% mentioned above, that is, when do you ask for referrals.

Most people we speak to respond that they only ask for referrals once they have closed the business and the prospect has been converted to a client.

This type of approach has a number of flaws, first why wait for a chance to find about potential prospects till after the entire sales cycle.  If you can be referred to a real prospect would you not want to engage with them as early as possible?  Second, if you only close one out of three prospects (which would be considered great by most B2B standards), the implication is that the referrals that the two non-converted prospects could have provided will never be tapped.

We encourage sales professionals to take a wider view.  When asked why they wait to ask after the prospect has become a client, sales professionals say that they feel that they have then demonstrated and delivered value, and have gained the client’s trust.  While I would not disagree, the criteria they use are present before a deal is complete and therefore can be capitalized during the sales not just after it.

At a most fundamental level we feel that trust is established and gain long before the sale is complete, I would argue the sales would not happen without trust.  That being the case and the fact reps say they want trust to be present to ask for referrals, it goes to follow that they can and should asking for referrals when trust is established, not when the sale has been completed.

Similar arguments can be made about value, both in terms demonstrating value and delivering value.  As we have stated before, as a sales professional you are a subject matter expert, often as qualified and informed as your buyers, with the added advantage of seeing best (and worst) practices from a cross section of companies.  As such you are in possession of a wealth of knowledge that could be of value to a prospect, long before they buy, or even when they don’t buy.

Have you ever sat with a prospect, and as a result of your professional interview skills, you discuss a key topic, and at one point you find that you have been able to positively challenge assumptions the prospect had?  And as a result they thank you pointing that out.  I would argue you have delivered value, and value has been acknowledged.  As a result you have earned the right to ask: “Well, I glad you see it that way, who else do you know that may find this type of discussion (approach, methodology) of value?”

How many times have you had a prospect say?

·         “Wow, that’s great”

·         “Thanks for fixing, addressing, changing…. this”

·         “I wish I knew that 2 years ago before we started…”

·         “I didn’t know you could that”

Each of those is acknowledgment of value, each of those is an opportunity to ask the prospect for a referral before the become a client.

Let’s remember that there is no guarantee that the prospect will in fact give you a referral right away, but you have to ask.  If they do in fact give you a referral, bingo.  If not, and the do become a client, you have set the expectation that you will ask and accept referrals.  This clearly works better in some verticals than others, but in all sectors and segments, you need to start asking for those referrals right out of the gate, rather than after the close.

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Every salesperson in the world loves a surprise call from a surprise prospect who tells us they were referred to us by one of our friends/customers/colleagues/family. Successfully selling a surprise referral is doubly sweet, because the mere existence of the order is evidence of our worth to two parties: first, the original customer or friend who provided the referral, and secondly, the referral who saw value in our product/service and liked us well enough to buy from us.

So if referrals are so great, and they are, why don’t more salespeople engineer ways to get them? If you’re one of the many who hasn’t found a way to get serious about getting more referrals, here are nine referral tips to boost your referral business next quarter:

1. Ask. If you want referrals, you have to ask for them. It’s impossible for a salesperson who doesn’t ask for referrals to get more referrals than a salesperson who does ask for referrals (at least when all other factors are identical). Rewards go to the people who ask for what they want. Note: Leaving your customer with a stack of your business cards, and saying, “I’m leaving a stack of my cards with you and I’d appreciate it if you would pass out my cards to people who might be interested in my widgets” is NOT asking for referrals. That’s merely passing out stacks of business cards.

2. Timing is everything. Ask for referrals at the correct time for your industry, product, and customer. Asking at the time of sale is usually a no-brainer. Other good times to ask are after a delivery or installation, after a final customer meeting to clean up loose ends, when calling the customer to keep in touch, or after you’ve provided a special level of service for your client or jumped through hoops to make something happen for your customer.

3. Make it easy for the prospect to give you names. Most customers are self-absorbed and focused on their own situation. If you’re good at what you do, there are many people who would willingly give you referrals IF you make it easy for them to do so.

4. Ask for referrals more than once. Even if they didn’t give you a referral at the time of order, maybe they will when you call to follow-up to see how they’re enjoying their new home. Don’t just ask once.

5. Don’t just ask customers, ask prospects. Many prospects will provide referrals even though they themselves haven’t purchased from you. Don’t think (incorrectly) that buying from you is a prerequisite to being eligible to provide referrals.

6. Ask your personal and family network for referrals. Your network of contacts know what you do for a living, but have you ever contacted them specifically to ask for referrals? Be direct and ask for exactly what you want. They’re already your friends and they like you; they just need to be asked for help.

7. Reward the referrer when someone refers you to someone and that someone buys. Make the reward appropriate for your industry and for the size of the sale. A simple thank-you card is appropriate in some instances, a cash gift in others. There are many effective ways to reward your referrers. Don’t forget to show your appreciation. If you do, you’ll be more likely to get additional business from your referrer.

8. Put it in writing. When I was selling full-time, I had tremendous success getting referrals by using a very simple form with three lines on it. I would hand it—along with a pen–to customers after they signed the order paperwork. I would say this: “Many of my best customers came to me as referrals from other customers. I would love it if you would give me the names of two or three people who might possibly be interested in talking to me about my widgets.” Then, I would turn my back on the prospect and staple papers or organize my file or check my phone for messages. This combination of verbiage works like magic.

9. Provide clues. Sometimes an open-ended question asking for referrals is too broad. Explain what makes a good referral in your business, even if it seems obvious. Here are some ideas: “Some people know people at their places of worship who might have a need for my tile designs; can you think of anyone?” Or, “A perfect client for me is a middle-aged woman who is frazzled, way too busy, and has a family.” Give clues to your peeps so you can help focus in on what you need.

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In the world of the bootstrapper there are little resources. No millions in marketing, strong SEM campaigns. The whitepapers and case studies are few are long to get developed. The number one marketing tool is word of mouth. Through networking and phone calls we use our voice to promote our offerings. This is our marketing engine, or lead generation tool, our cultivator.

What many do not do is take that verbal marketing and empower people to make it viral. See what makes a startup go big is the customer evangelist. How to get that person to make you money is simple. Get them in forums talking about your product. The prerequisite to all of this is them being truly in love with you and your offering. The customer evangelist will make you money but by definition an evangelist is a true believer. Here are three ways to get great referrals:

1. Leverage their relationships. Get them in front of their acquaintances. Have them bring you into a networking session that they frequent, or offer to take them and some of their colleagues at other companies out to eat. Make it about the people closest to your clients. The people that trust them through experience and will listen to them.
2. Leverage their reputation. Get them in front of those that will want to learn about the advantages of your offering. Put them in a webinar or in front of a relevant group of their peers. Have them share what working with you has done for them. Make it about the people that are most likely to believe in and respect your clients. The people that trust them through reputation and respect and will listen to them.
3. Leverage your prospects. Get them in front of the people you are working with. Have them on conference calls, at trade shows and industry events, or sponsoring open houses. Make it about the people that need that last push to move and become a client. The people that are starting to trust you and have to hear it from someone a little like them.

These are some basic ways to get your customers working for you. Please share other ways to get references and leverage customers.

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