Art
Siegel

Multiply Your Sales Through Referrals

Most people love to recommend a favorite restaurant, movie, book or business tool to their friends. It makes them feel good, and smart, to share their best experiences. You can use this wonderful bit of human psychology to Multiply Your Sales Through Referrals. 

Why do we do this? There appear to be three main reasons:

1. We want our friends to benefit from our positive experiences. It feels good to help others.
   
   
2. We enjoy being smart enough to find the best, so we want others to know how clever we are.
   
   
3. Recommending a product, service or vendor is an intrinsic part of our democratic society. We vote for the success of the best companies and products by patronizing them and encouraging others to do the same.

As long as you continually satisfy the needs of your customers, you will always get referrals, but you will get many more referrals if you ask for them. And you will turn more of those referrals into customers by using some of the methods we describe here.

Why Do You Need To Ask For Referrals?

Picture the following scenario:

Then you see an ad for a Goodwill or Salvation Army collection station near you. They are looking for clothes for the poor. In response to the ad, you drop off the outfit on the way to work. You may even take a closer look at your closet to see if you have anything else to donate. It's a little more effort to give the clothes to charity than to throw them in the trash, but it certainly feels better knowing you are helping someone instead of adding to a landfill.

Now, everyone knows that charitable organizations collect clothing for the poor, so why do these organizations keep running ads to remind us, particularly at holiday time? The answer is this: We intend to do the right thing, but unless we are occasionally reminded of the available options, most of us will do the expedient thing. Someone has to give us a call to action to remind us to do what we really mean to do.

And that is why you must ask for referrals. Your satisfied customers may think about telling their friends about your company, because doing so feels good and helps their friends. But many of your customers won't give you referrals unless you remind them with your call to action.

The Complete Referral Call To Action

If we return to our old-clothes example, the ad doesn't just say to give. It tells you what the organization needs, where it is located and what its phone number is. Similarly, a referral call to action gives your customers specific steps to take to make contact between you and the prospect.

Your referral call to action must include:

• The kinds of prospects you are looking for. This serves as a catalyst for the customer to think of specific people.
  
  
• What you are prepared to do and why it is beneficial for both the customer and the prospect.
  
  
• How you would like to get in touch with the prospect.

How to ask for a referral
There is just one simple, guiding principle in asking for a referral: Place the focus on the customer and the prospect, not on you or your company, by following these guidelines in every request for a referral:

• Express your appreciation of the customer's continuing relationship with your company.
  
  
• If the customer knows of others who might benefit from your assistance, say you would be pleased to help them meet their needs.

If your requests for a referral maintain this focus on the needs of the prospect, you will consistently get more referrals, and you will get more business from the new customers.

What To Ask For: The Issue Of Control

The principal thing you are asking for in a referral is for the customer to facilitate contact between you and a prospect. The big variable is how this contact should be made. You may have preferences on how to do this, but it's really not up to you. What to ask for in a referral depends largely on your current customer's need for control of his or her relationships:

• Some customers want to handle the communication themselves. They will give your name to an associate, along with some guidance on what to expect from you.
  
  
• Other customers want minimal involvement. They prefer that you initiate the contact.
  
  
• Still others may have very specific instructions on what they want you to do or say with their referrals.

How can you determine your customer's preferred level of control? The customer's personality type won't tell you, nor will the last referral from this customer necessarily apply. The best way to find out is simply to ask, using a choice trial close: "Would you prefer that I call Mr. Jones, or would you like to have him call me?"

Asking this way does two things for you: You find out the customer's preference, and the choice close increases the customer's commitment to the referral.

The minimum request
Your best referral prospects are people about whom the customer will give you specific information. But at the very least, you want the customer to mention your services whenever a suitable situation arises:

• Try first for specific references -- names of people you can call or people the customer plans to have call you.
  
  
• Then offer to provide some of your cards for the customer to give to others: "I'll give you a few of my cards. Then, if you know anyone who might value our assistance, would you please give them my card?"

Before you contact the prospect, you should go through these three steps:

1. Learn as much as you can about the prospect. When the customer gives you a name to contact, ask something like: "What can I do that would be most helpful for Mrs. Jones?" With this kind of question, you ask the customer for clues about the prospect's needs, ideas you can use to generate a conversation with the prospect.
   
   
2. If you are going to initiate contact, make sure you have approval from the current customer to reference him or her as the source of the referral. Without this, it is nothing more than a cold call.
   
   
3. Determine whether you will phone or write to the prospect. If the prospect appears to be well qualified, and you receive a strong referral from the customer, you probably want to phone. If the referral is more tenuous, try to get a mailing address so you can write a letter first and then follow up with a call.

Timing: When To Ask For A Referral

In a long-term relationship, we know that there are typically many ups and downs in the customer's satisfaction level. The best time to ask for a referral is at a satisfaction peak, such as:

• When the customer has just praised you for something you have accomplished
  
  
• When your products or services are performing very well
  
  
• When you call to confirm a delivery or to give the customer some important information he has asked for
  
  
• When the customer has made a major purchase decision

Never ask for a referral before you've earned it in the customer's eyes.

Following Up On A Referral

Once you have been given a referral, the next step is to start the sales process with your new prospect.

Starting an inbound referral call
If your current customer has the referral prospect call you, begin by expressing your willingness to help, and ask open-ended questions about the prospect's goals and background. If the conversation is slow to get started, use information the customer gave you about the prospect to generate lines of questioning: "Mr. Smith mentioned that you may need assistance with your (type of product or service). How might we help you with that?"

When speaking with the prospect, be careful about revealing too much of what you know:

• Maintain confidentiality. You should not discuss your current customer's situation with the prospect, unless the customer has specifically authorized you to do so.
  
  
• Mention as little as possible of what the customer has told you about the prospect. Ask the prospect to explain his situation himself.

Starting an outbound referral call
An outbound referral call is a fairly cold call. Ideally, you will have learned enough from the current customer to give you a starting point. But in many cases, you may know little more about the prospect than that your customer thinks the prospect would appreciate your help. The start of your call should include this sequence of elements:

• Clearly identify who you are and the company you are calling from.
  
  
• Say that you are calling at the suggestion of the current customer.
  
  
• Pause and give the prospect an opportunity to respond.
  
  
• If the prospect does not jump in at that point, describe in a general sense how you have assisted the current customer and how you would be happy to help the prospect as well. Keep your mention of the current customer very general, such as: "I have been working with Miss Larson for nearly two years, and she suggested you might be interested in knowing more about our services."
  
  
• Move to an investigation of the prospect's needs.

The outbound referral letter
Use letters to make contact with prospects whom you are less comfortable calling. The basic content of the letter should be similar to that of the outbound call. Explain who you are, who referred you and what services you are prepared to provide. Then ask the prospect to call you to discuss his or her needs.

Follow Up With The Original Customer

The last step in the referral process is a thank-you note to the customer who provided the referral. This can be either a phone call or a letter in which you say to the customer:

• You have contacted the prospect.
• It appears that you will or will not be able to assist the prospect.
• You appreciate the referral.
• You are willing to do anything you can to continue to meet the customer's needs.
• Reassure that confidentiality will be maintained.

This follow-up ensures a continuing stream of referrals from this customer, as well as deepening the customer's commitment to your company.

SeaBird Associates Inc
3011 NE 7th Drive
Boca Raton, FL 33431
Phone: 561-750-9233
E-mail: Art Siegel

About Art Siegel