If you’d like to improve your referral generation, read this article!
One of the most frequent complaints that I hear from salespeople is that they don’t get referrals – or don’t get enough referrals, which essentially means the same thing. Either way, their referral generation strategy is not yielding the desired results. Of course, when I drill down, in many cases I find that their referral generation strategy is “hope someone gives me a referral.” Unfortunately, it doesn’t work that way.
The first thing to understand is that quality referrals are earned, not given. You earn a referral by building trust, by building a reputation of excellence, and by generating relationships with people who are in position to give you referrals. You don’t earn them by simply going to networking events and passing out cards willy-nilly. Let’s look at five reasons why referrals don’t happen – and two great bonus techniques to earn them.
You’re not making deposits. A long time ago, a very wise man told me to think of relationships – any type of relationships, personal or business – as a bank account. If you want to be able to make withdrawals (i.e. gain any sort of rewards), you must also be prepared to make deposits. That means that you do things to help your relationships, whether it is sending them referrals, offering advice and assistance, or other things that build affinity and trust. You can’t make a withdrawal from an empty bank account (banks get fussy about that; I’ve tried before), so why should you be able to withdraw from an empty relationship?
Your relationships aren’t with the right people. Nobody has time to build 100% quality relationships with everyone they meet; hence you must be selective in choosing your business relationships. The people who are best positioned to send you referrals are, in order: Your customers, business owners in your industry, noncompetitive salespeople who sell to your types of customers, and everyone else. How much of your relationship-building time do you spend with “everyone else” as opposed to the top three? (NOTE – the right relationships with other salespeople can be invaluable. Years ago, when I was inindustrial sales, I had some great relationships with other salespeople who essentially bird-dogged new developments, projects, etc. in the plants in my territory. I did the same for them. Much money was made.)
You’re a peddler. Quality selling is about helping your customers purchase the right things to generate a positive result for themselves. Salespeople who do this are most properly thought of as consultants. On the other hand, salespeople who merely go around begging for the next order – and are willing to do whatever it takes to get it – are most properly thought of as peddlers. Customers value and respect consultants and tolerate peddlers. Customers refer those they value and respect. Get the drift? If you’re just running around asking for this week’s order, don’t expect to get anything other than this week’s order.
You need a referral. This is where the banking analogy becomes the most apt. As the old saying goes, one of the all-time best ways to get a loan is to prove conclusively to the bank that you don’t need it. It works the same in selling. If you’re asking for a referral because you HAVE to have one in order to make your numbers, it’s probably not going to happen. Nobody will refer desperation out of fear of what that referred sales call will look like. This is why referrals should be mixed well with other prospect generation strategies.
You’re not asking. This is the one that stumps me the most. When I get a salesperson who complains about not receiving referrals, I always like to ask the salesperson when the last time was that he/she asked a customer or referral partner for a referral – directly and in so many words. Seldom do I get a good answer. The truth is that, in sales, we only get what we ask for. So why are salespeople so reluctant to pull the lever and ask for a referral?
BONUS: Two great ways to get referrals: I promised at the beginning that I would give you a couple of techniques to earn referrals. Here they are, short and sweet:
One: Refer one customer to another. If you want to break out of the “salesman” niche, this is a great way.
Two: Take multiple referral partners to lunch at the same time. Facilitating new relationships always comes back to you.
Referrals are great, and they are the highest-probability source of new prospects. But generating them takes a well thought out strategy, budgeted time, and effort on a consistent basis. If you can do this, you will get referrals.
