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A secret weapon of successful sales people world over is the ability to ask for referrals. Your customers will often refer you to their friends and colleagues without you asking for them; however this depends on the nature of your product or service and also on your customer. A socially active housewife may walk around telling everybody about that fabulous lipstick you sold her, however a reserved CEO may not want to bring up the state of the art water cooler’s he purchased from you at every family or work dinner.
Referrals are another way to contribute to your sales pipeline, in addition to cold calling, and other lead generation methods.
Referrals make good business sense because:
Referrals are a cost-effective way of getting new customers. You don’t have to do any work other than pick up the phone and call the person whose name and number you have been given.
Referrals are better clients because they have already accepted you as a salesperson and your product as one that has added value and has been beneficial for a friend or someone known to them.
When some is referred to you, chances are they are already in the market for a similar product or service, so they are already in a buying frame of mind.
When some is referred to you by another person, they are already convinced about your value and the value of your product, hence they are often not as price-sensitive as fresh prospects may be.
Referrals are more loyal – research tells us that clients who have been referred to you are more likely to be long term customers than those that you attract through other mechanisms.
1. What type of referral do you want?
When you ask for referrals you need to have an ideal client or target in mind.
“Do you know someone that I can call” – is not the same as saying “do you know any other women or men who are passionate about cooking and would love to own and use this product?”
Spend some time thinking about what your ideal client looks like in terms of their qualities, attributes and needs.
This way when you ask for a referral, you can also explain the type of referral you are looking for.
2. Ask at the highest emotional point of sale.
The best time to ask for a referral is right after your customer has purchased your product. This is the time when your customer is feeling the most positive about your product.
He is also confident in your competency and trustworthiness as a salesperson and can pass that recommendation on to whomever he calls.
I hope that your product is a great buy and that your after sales service is great, however in case it is not for this customer, you don’t want to ask for a referral when something has had a chance to go wrong. Asking for a referral later, maybe after a week or two, is also when the strong feelings that the customer has for you and your product have lessened and they may not have the time or inclination to recommend other’s to you.
3. Learn how to ask the right way
Don’t make a big deal out of asking for a referral, think of the sales process as a cake. Getting a customer to buy is getting your cake, the referral is just the icing. At the end of your sales process, after you have finished with any paperwork and other transactions you may ask the customer something like this “Do you know anyone in your peer group or circle of friends who may benefit from this product or service?”; give them a few seconds to think about it, if they say NO let them know that they can always call you if they think of someone or they could pass on your contact details. If on the other hand they say YES, ask them for the referral’s contact details and proceed to steps 4, 5, and 6. Don’t forget to thank them for their referral. Just remember not to put pressure on your customer, if they want to help you out – chances are that they will. The trick is to ask for referrals on almost every sales call and on every single sale that you make so that you have a steady stream of referrals pouring in.
4. Ask if the customer would phone the referral on your behalf.
Once you have built rapport with your customer and they have bought in to your product or sale, it is not so hard to ask them to do you a favour. Once you have taken down the names and details of their referrals, ask them if they could phone the referral on your behalf. Some customers will pick up the phone right then and there and call the person.
If they say they will call, let them know a date 2 days from hence, which is when you will be calling the prospect and ask them if they could call before that. If they decline and say they are not comfortable calling or that they are too busy, move on to step 5.
5. Ask permission to use their name
Ask your customer if they are ok with you using their name when calling a new prospect that they have referred. This automatically creates a buy-in in the mind of your new customer and will help you fix and appointment more easily. You could also let that prospect know about what product or service his friend has bought and how it will benefit them. People trust their friends, colleagues and peer groups more than they trust strangers and would be more comfortable buying on a recommendation than on any other basis.