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There is one thing that Sales and Marketing departments agree on: referrals are the best lead source for a business, whether in a B2B or B2C context. The good things about referrals are that they have a positive impact on the closing ratio, the length of the sales cycle, and the average customer lifetime value.
Although most of us know how powerful referrals are, only very few sales teams incorporate an “asking for referral” stage in their sales process. What’s the problem with that? There are several actually! Some salespeople will waste a considerable amount of time prospecting only to add a few new opportunities in their sales pipeline, others will not prospect at all and will act as farmers or account managers when in fact they should hunt. In both cases, this is a sure way to fall short of expectations and miss the numbers! According to Edelman Trust Barometer, 84% of B2B decision makers start the buying process with a referral. Knowing that, you may want to reconsider how you want to leverage referrals.
When Should You Ask for Referrals?
Normally, most people will only ask for referrals once they have done the work. In fact, many salespeople think that they cannot ask for referrals before a customer actually experiences the value of their product or service, since their client does not know what they can do, and thus will not refer them to anybody. Of course, they cannot refer you to someone saying they have done a lot of work with you if nothing has been accomplished. Yet, I assure you that asking for referrals after a first base meeting or even after a prospecting call is something you can do…and it works!
Then how do you put yourself in a position where you are not only comfortable but also legitimate to ask for references before actually doing business with a prospect? Here is how you can do it.
Getting Referrals During the Sales Process: The Best Way to Proceed
The first thing you must remember is that often, the people you are discussing with during a first base meeting or a prospecting call have a service or a product themselves, which means they also have clients. This emphasizes on the importance of questioning your client and getting a lot of information from them during those stages of your sales process.
Now, an interesting and efficient way to proceed if you are seeking for referrals is to tell the client who you are interacting with and that there are a few people you would like to introduce them to, and that could be potential clients for them. Obviously, that affirmation must be sincere, do not refer them to a random client that you know will not be interested by what your client has to offer. The idea is that by simply offering a referral, you can then turn it around and ask if they would have referrals themselves.
Here is an example of what you could say:
“I know we have not worked together yet, but do you think there is anyone in your roster of contacts that could benefit from having a discussion like we just had? Obviously, you have not seen my services, but at this point you see we are going to have future discussions, so do you think there is anyone else I could be having this conversation with, and if so, would you mind giving me their names and phone numbers?”
Always Be Consultative
I believe what is very important when trying to ask for referrals at this stage of your sales process is to be consultative. If you have been consultative from the start, you are already demonstrating credibility even prior to the first meeting because you are showing a great ability to listen and pay attention to what your prospect is telling you.
Should You Really Give Out References First?
A question you might be asking yourself is if giving away references first before asking for referrals truly adds value to the process or if you could just ask for a referral without giving any away.
In my opinion, if you really have an interesting reference that makes sense with what your potential customer does, then it is very beneficial to give out the reference, since you are showing empathy as well as demonstrating that you are willing to do the same thing as you are asking them to do. As we say, scratch my back and I will scratch yours!
Especially in the business world where you do not know anyone, there is a lot of give and take, so giving away a referral first shows an openness on your side. Hence, the person you are talking with will probably be more open to do it as well.
You should definitely not wait until you have closed a deal to ask for referrals. Obviously, the potential number of referrals you can get drops sharply and is directly linked to you closing ratio.
The only time I would advise you wait that you have established credibility and trustworthiness before asking for referrals is if you do not have any contacts in the industry your client is working in. Otherwise, I truly believe you could ask for referrals at any time, as long as you remain consultative and that you have some to offer in return. I have tried this technique myself and it worked, so I suggest you jump right in and try it yourself during your next first base meeting!