Guest post by Marylou Tyler, co-author of Predictable Prospecting.
Referral leads generate higher lifetime value, close easier and race through the pipeline to close faster than other lead sources.
Referrals work because people trust people more than they trust any other source of information. A recent study revealed 84% of people completely trust recommendations from people they know.
The most important ingredient for a successful referral program is to “be referable”. When you delight your clients with exceptional experiences, they in turn are delighted to provide referrals as a gift to their friends, colleagues and family.
Asking for Referrals
The best time to ask for referrals is either at the peak of the client experience or at the end. Client experience is typically judged by how pleasant (or unpleasant) the interaction is in that moment.
Referral Program Design
The best referral programs are typically designed with:
- Simplicity: Everything about the program is simple and easy, including communications and processes.
- Transparency: Details of the process, benefits to the client, and the expectations are communicated consistently and often along the referral lifecycle timeline.
- Incentives: Non-monetary incentives that are tied directly to your product or service (i.e., priority support, added features, etc.) are the better choice here.
Three Methods to Ask for Referrals
Method #1 – Current Clients
A systematic way to ask clients for referrals is via the Net Promoter Score (NPS) survey. An NPS survey asks one simple question, “On a scale of 0-10, 10 highest, how likely are you to recommend _____ to a friend, colleague, or family member?” (Fred Reichheld, Bain & Company – trademarked)
It is a no-brainer to ask Promoter clients (NPS score: 9 or 10) for referrals, yet shockingly few companies proactively add this step to their sales process.
Promoter clients who actively provide referrals are more likely to stay clients longer due to the psychological principle of consistency (they act in accordance with their referral behavior). Even if they move to a new company.
Client Movement: A fast way to win new business is by reaching out to Promoter clients who have recently switched jobs. Automated movement alerts aligned with NPS Promoter scores give you quick access to new sales opportunities with little human intervention.
Method #2 – Indirect Referrals
While current clients are often the best source of referrals, there is also an indirect route to obtaining referrals. First, ask your client to connect you with their favorite vendors or partners. Then, simply trade leads with complementary suppliers. You should also consider including fellow employees in your internal lead referral programs.
Method #3 – Social Mining
This simple referral method requires checking your client’s LinkedIn profile and identifying 3-5 connections you want to engage as prospects. Then ask your client for permission to mention him/her in your communications to the prospect.
Systematizing Referrals: Automating a successful referral program involves:
- Mapping out the process
- Assembling it with proper tools
- Activating with consistent workflows & calendaring
- Measuring performance
- Optimizing the system
The result is a systematic and profitable prospecting referral engine that complements other successful prospecting methods, levers and systems.
Marylou Tyler is a renowned sales process improvement expert, author, speaker and the CEO of Strategic Pipeline. She has helped businesses like Apple, Bose and UPS grow their revenue by increasing their sales pipelines. Marylou’s passion is helping B2B sales professionals go from cold conversations to qualified opportunities.