Curious how to put business referrals to work for you?
It’s time to get serious about business referrals. That’s where the lead generation power is. Simply stated, referrals drive revenue.
It’s no wonder that high-growth businesses—companies with double-digit growth—rank customer referrals as one of their most successful sales strategies, according to Vistage research.
“CEOs of small and midsize businesses rank customer referrals as one of the most effective ways to grow customers. But most SMBs aren’t realizing the benefits of referrals because they lack a formal strategy. An optimized approach to customer referrals leverages the talent of the organization, focused training of staff, and technologies such as social media and online communities to strengthen the company’s brand.”
The importance of business referrals is legendary. But you don’t need me to tell you that. I’ve never met a successful seller who didn’t understand the value of referrals. Nothing helps you close a deal faster than having someone your prospect knows and trusts vouch for you.
But there are some common referral misconceptions that can sabotage your business development.
Do You Have False Referral Business Ideas?
Here are the most common myths regarding business referrals —and why they’re busted:
1. Getting referrals takes too long.
When salespeople receive referral introductions, they get meetings with one call. That’s it. One referral, one call, one meeting with a VIP decision-maker.
So, why would a middle-market or enterprise salesperson waste time with arduous cold calling strategies? (That’s a rhetorical question, by the way.)
(Image attribution: Stanislav Rishniak)
2. Asking for business referrals is asking for favors.
Referrals are not favors.
When someone offers you a referral, they’re not only helping you out, but they’re also helping the other person. They trust that you will share insights and best practices, not a sales pitch. They’re also positioning themselves as a valuable resource and connector. It’s a win/win/win—not a favor.
3. You can’t depend on getting referrals as your only source of leads.
Business referrals should be your #1 outbound prospecting approach.
Don’t freak out. Outbound is the operative word. Instead of spinning your wheels with a cold outreach, adopt referral selling. Everything else stays pretty much as is. Marketing still runs nurturing campaigns, provides relevant research, writes blogs, initiates and promotes podcasts and webcasts, and forms a partnership with sales to advance and close deals (hopefully).
4. We already “do referrals.”
Telling your sales team to go out and get business referrals is not referral selling. Referral sales requires a strategic, disciplined system, and it all starts with commitment from sales leadership.
The responsibility for a major change always starts at the top. If the CEO or division head doesn’t support the shift to referral selling, it’s not going to happen. Referral selling must become a priority. It cannot be an afterthought or something the organization does from time to time.
For business referrals to become the way you and your teams work every day, you must create metrics, invest in skills-building for your team, ensure accountability, and implement with precision. Referral selling is a behavior change that takes practice and ongoing reinforcement and coaching.
Bottom line: If you’re just telling your team to get referrals, they won’t ask every single client. And that’s what it takes to scale referral selling.
If you’re not committed to transforming your lead generation system through well-formulated referral business ideas and practices, please don’t even consider starting the process. When it doesn’t work, you’ll just contribute to the list of myths.
Get Your Heads Out of the Sand
Most reps dread prospecting, and I understand why. They’re cold calling, leaving voicemails, sending emails, and reaching out on social media. There’s no conversation and no relationship. It’s a numbers game, and given the dismal cold calling success rate, the numbers aren’t good.
“Sales prospecting is a grind.” That’s a quote from a sales executive.
This same executive admitted that most sales reps don’t know how to ask for referrals and that they need a referral play, a process.
Obviously, referrals were an afterthought. He was so wedded to his methodology that he had no bandwidth for alternate approaches. That happens to many of us. We are heads-down proving our points of view. We forget to get our heads out of the sand and entertain other—even controversial—methods.
What will you do to ensure business referrals trump all your other business development activities? I have an idea. Take the next step and answer the 14 “Yes/No” questions on my Referral I.Q. Quiz. This will take you just a few minutes to complete. It’s anonymous and your checklist for selling with business referrals. Most people find the results enlightening.
(Featured image attribution: Benis Arapovic)
(This post was originally published on April 20, 2018 and updated August 17, 2023.)
