In today’s wired, interconnected world where communicating with friends is just a matter of keystrokes, it’s easy to see why having an effective referral program is key to growing your business. People are sharing ideas and experiences more frequently and to far wider audiences than ever before. Prospective customers not only hear about your business by searching online, but also from comments shared by people they trust.
Leads that arise from referrals are six times less expensive to acquire, are more likely to buy from you, and typically are less sensitive to price. These characteristics exist, because trust in you and your service/product is passed to the prospective customer when their acquaintance recommends your services.
For these reasons you would think that most business owners have developed clearly articulated policies to generate referrals. Logical yes, but accurately no. Most business owners I meet recognize the value of referrals, but haven’t formalized their referral program…apparently preferring instead to leave this important lead generation source up to chance.
In his book, “Get More Referrals Now”, Bill Cates identifies four primary reasons owners and their sales teams aren’t more active in soliciting referrals. Beneath each reason I list a couple strategies from Bill’s book and my experience to overcome the obstacle.
Reason #1: The owner and members of his sales team forget to ask. Has this happened to you?
Solutions: 1) formalize your referral program – write it down and communicate the details of the program to your team, and 2) build soliciting referrals into your formal sales process
Reason #2: The owner and members of his sales team lack the confidence to ask
Solution: provide exceptional service that creates Raving Fans and solicit feedback from customers on their experience
Reason #3: The owner and members of his sales team think asking for referrals is pushy
Solutions: 1) recognize that people make referrals to feel good by helping their friends, 2) from the beginning of the sales process foreshadow that you will be asking for referrals, and 3) target markets where your ideal clients are found
Reason #4: The owner and members of his sales team don’t know how to ask
Solution: use scripts and practice, practice, and practice again asking for referrals
If you and your team are not receiving enough referrals take the time to investigate the reasons. Your time will be well spent if it results in opening the referral faucet.
Reach out to me if you would like additional information on strategies to gain referrals.