Gaining a sales referral leaves you with that warm fuzzy feeling inside (well it does for me anyway) and with good reason too. Sales referrals are easier to close as they are requesting information from you, have taken advice from someone they trust and are in a frame of mind to buy.
So it begs the question, how can you increase these gold coated, sales-ready referrals?
1. Pick up the damn phone
The famous saying “If you don’t ask you don’t get” is very true when talking about referrals. Don’t be afraid to ask your customers if they know anyone else who would be interested in your product or service because the worst response they can say is ‘no’. You may even be pleasantly surprised and see them refer more than one.
“83% of customers are willing to refer a positive experience – yet only 29% do without being asked.”
But it’s not just customers who can refer new business: think about your prospect too. Maybe you’re already in a sales process with them, they liked your product but it wasn’t a fit for them, but, as they now know the value of your offering, they may see value in it for someone they know. Just because they aren’t your customer yet doesn’t mean they can’t help build your sales referral strategy.
“92% of people trust referrals from people they know.”
2. We all like a gift!
If it’s possible for your business to offer a small incentive, do it! The majority of people love a monetary gift such as a gift card or discount on future purchases. Test a few options to see what works best for you. I have found in the past that incentivizing both the referrer and the referee generates even better results. However, if you decide to offer an incentive, it doesn’t have to break the bank: a small reward works just as well as a larger one.
“Offering a reward increases referral likelihood, but the size of the reward does not matter.”
A good example of this was a previous role of mine working for a large retailer, where my goal was to increase awareness amongst the target audience and capture new email addresses for future promotions. To do this, I set up an interactive online game in which someone at random would receive a £20 voucher. I also tested this with the much larger amount of £100 but the results were almost identical.
This shows that just an incentive being there is enough for people to part with information. It may also be true that a larger reward is actually off putting as they feel they have less chance of receiving it.
If your business can’t stretch to a monetary incentive, you should make sure you sincerely thank them once they have given you the referral. If you convert the referral into a customer you should thank them again. Sometimes an appreciative gesture can be enough.
3. K.I.S.S. Keep It Simple, Stupid
In our fast-paced world, we’re all limiting our attention span. Information is easy to get hold of and if it’s not simple to understand, we move on. Therefore, you need to make it as easy as possible for your customers to refer someone to you. Streamline the process, give them all the information they need without jumping through hoops and reassure them that you have their best interests at heart.
“When you are asking for sales referrals, you’re actually asking your customer or prospect to put his or her reputation on the line in order to endorse you.”
With this in mind, a difficult to understand referral scheme will only keep your referrals at arms length.
4. Quality over quantity – every time!
Whenever you are asking for a referral, be specific. Are you looking for high net worth individuals? Do you target a certain job role that can make decisive decisions, or perhaps people who have a specific interest? Whatever your target audience is, make sure that you communicate this to the referrer. If you don’t tell them, you’ll waste time pursuing leads that you can’t use, or worse still, risk upsetting both the referrer and referee because you can’t progress the sale any further after their initial interest. Surely it’s better to have qualified leads from the outset?
Referrals are key to growing your sales, so target the right people and your close ratio will be anything from 50% to 500% higher compared to other prospecting methods like cold calling, advertising or any other sales techniques you employ. These are high numbers, so make sure sales referrals are at the top of your to do list.