I doubt anyone would disagree that referrals are often the easiest people to do business with, the most profitable to do business with, and are most likely to also refer you to other prospects.
Most sales coaches recommend asking for referrals only when a project has been completed to the customer or client’s complete satisfaction.
I teach people to ask for referrals during the sales process if it is a lengthy, and complex sale.
I also recommend asking for referrals at the end of the conversation when making a telephone appointment for a first meeting, when a request for an appointment is rejected, and when a meeting or series of meetings do not result in a sale.
That alone will increase the number of referrals you receive several fold, and I can assure you that asked in the correct manner, it most definitely works.
But that was not the main point of this posting. Let me explain with a case study / true story…
Jamie is the founder and MD of a company which manufactures, installs and services security shutters for commercial premises of all sizes; anything from shutters for small shops, to huge factories and warehouses.
Jamie came to me for advice and help with sales and marketing soon after launching his business.
Naturally, the subject of referrals came up, and Jamie embraced the concept with enthusiasm. But as a relatively new business with few existing customers, he had to rely mainly on asking for referrals when making a telephone appointment for a first meeting, when a request for an appointment was rejected, and when a meeting or series of meetings did not result in a sale. (He learns fast!)
That worked very well, and then I suggested an approach that I had used very successfully, as had many of my clients. It was asking for referrals from suppliers.
It’s a fairly obvious suggestion if you think about it. Let’s face it, most suppliers want to keep you happy and continue to supply you.
But I took this a stage further, as did Jamie. And I wrote about this twist on the strategy in my first best-selling book titled Psycho-Selling back in 1994.
Here is the excerpt. I called it THE NEW TOWN APPROACH. This was of course before the advent of the Internet, business, and social media, but it works just as well today.
THE ‘NEW TOWN’ APPROACH
Here’s an interesting way of prospecting via referrals. Imagine you have just moved to a town in a part of the country you have never been to before. You are going to have to find places to buy food, clothes and all kinds of household items. You will need somewhere to get your car serviced and buy petrol, a nursery to buy plants for your garden, restaurants to take your family or business contacts to. The list is almost endless.
If I had arrived in that new town I would have done precisely that. I would then have driven around and found out who the local suppliers were. BUT not the supermarkets or major chains. You don’t get to walk into Tesco et al and speak to the MD.
I would visit these businesses, and explain that I was new to the area. I would tell them what I did, and that it was likely I would spend a lot of money with them over the coming years. I would also explain that I prefer, whenever possible, to give my business to people who could refer me to other businesses they know, who could be prospective customers for what I sell.
You probably have not just moved, but you are currently giving your hard-earned money to a lot of people who could do business with you, or refer you to other people you could do business with.
The reason they are not doing so is because they do not know you, what you do, and you have not yet asked them. Or they are a huge supermarket chain.
Jamie did just that. He was amazed when the first person who he had a conversation with was the local corner shop where he bought his daily newspaper. The owner gave him 4 referrals. By the end of one week, he had 37. Over the following 3 months, he did business with over half of them, and received another 72 referrals. And he did a ton of new business!
Might that work for you?
There’s only one way to find out!