There is a common challenge I see with both established businesses and startups, and it’s that they don’t have enough leads.
Everyone is too busy focused on closing deals that they don’t have time to prospect, or the leads provided by marketing aren’t ready to buy.
Have you ever been asked to book a meeting with someone who has downloaded a white paper? They are way too early in their buying process and aren’t ready for a conversation, because they don’t know their problem and certainly don’t know you and your brand.
This has a negative impact on your conversion rates. As I talked about in this blog post, a wrinkle in your conversion rates at the top of the funnel can have huge repercussions on your productivity and effectiveness throughout the day.
So what is the answer? Spend more money on marketing? Focus more time on prospecting?
They are both good answers but are often not achievable, marketing budgets are set and you don’t have any more hours in the day.
So how do you generate enough leads to make your sales number?
Ask for referrals.
You’ve heard it before. Everyone knows it is a huge opportunity, yet less than 5% of sales people and organisations have built a referral system into their sales process. So in the words of my father, you’re going to hear it again.
What is a referral?
Basically it is using the existing relationships you have with your clients and prospects to expand your opportunities by asking them to introduce you to other companies who are likely to need your service. It’s that simple.
Why don’t people do it?
Firstly, they are scared. Maybe they think that because you have asked for money it is rude to ask for any more. Or maybe they have used all of their will to ask the hard questions in the first place, and there is just no will left to ask this one more thing of the customer.
On top of these two roadblocks stopping people from asking for referrals, there is rarely a successful process being implemented for you to replicate. So people are doing it incorrectly which is feeding their fear.
Why are referrals worth pursuing?
Referrals are an amazing source of highly qualified leads that achieve phenomenal results. A referral is the greatest form of Word of Mouth (WoM) marketing, which 74% of consumers identify as a key influencer in their purchasing decision.
When a happy customer introduces you to one of their colleagues or friends, you have achieved their stamp of approval. You are already a trusted adviser.
When you look at the below graph you can see Word of Mouth sits atop of the lead totem pole, positioned in the top right hand quadrant of effectiveness and efficiency.
Your customer intimately knows the problems you solve and probably knows their friends problems too. This, along with the established trust, will not only shorten your time to get into a sales cycle but also speed your path through it.
Where do people normally fall down with referrals?
For the 5% of people who are implementing a referral process, they are still met with resistance and immediately fall back into their fears. Hence they don’t get a lot of value out of the process. Or they don’t educate the customer about who they could engage and what happens next, so the customer responds with the common objection, “let me think about it and i’ll let you know”.
So how do you create a successful referral process?
Here it is, the referral process…
1. Find the right time to ask
In reality you can ask for a referral at any stage of the process, but the best time to ask is when your customer is at their happiest.
When is that? Just after they have purchased, they will never be happier, they have seen the value and are willing to invest. During the implementation they may be frustrated with the process.
Following that, once you have delivered the first value and begin delivering recurring value, the process will continue to get easier, but why wait!
2. Identify people to ask
This is another trap a lot of people fall into, they want to ask the decision maker specifically.
Why? Are they the only ones with friends and colleagues you could help? Maybe you feel they are the only ones who see the value of what you have provided?
If you are engaging with multiple stakeholders in the business and have provided value, in the form of being an effective and efficient business partner, then they can be your referral partner.
Whoever your allies are in the business don’t be afraid to ask the referral questions.
3. Be prepared
Do your due diligence before you ask a favour of anyone, understand who in their network would be a great fit for your solution. One of the most common responses from your referrers is that they will have to “review their network, have a think and get back to you”.
What do you think happens next? They forget to do it and don’t get back to you, most of the time this isn’t intentional, understandably you aren’t their number one priority.
Make it easy for them. Go to LinkedIn, do a search on your ideal customer profile, see who is a 2nd degree connection, and look for overlap with your customers.
Sure this is going to take additional time, but your customers will appreciate the effort and you will see better results.
4. Ask the question
What normally happens when people ask for a referral is that they put the onus on the customer to make the introduction. This is another common issue, as writing a referral email is not their priority.
Here are two tactics you can use to assist with that process:
1. Take the responsibility of making the connection yourself. This means that they won’t get too busy to draft and send the email on your behalf. But you need to set it up appropriately. Try saying something like this;
Do you mind if I mention your name and that you encouraged me to reach out?
2. If they aren’t comfortable with that, then you should make it is as easy as possible for your customer and ghost write the email on their behalf, outlining why your solution is a fit.
5. Thank them
They just provided you a warm lead to a potential client, you need to appreciate them for doing that. Send them some company swag, vouchers, a book. Anything to show you care.
6. Close the loop
This is something that Steli Efti from Close.io talks about regularly, including in this blog post. Basically closing the loop involves asking the prospect you just met to send a thank you email to your original referrer.
When you look at how easy this is and the potential it could have for your business, it is surprising that more people don’t do it. Like a deer in headlights, the fear is real and can be crippling people from action.
In reality the cost of not doing it, i.e. missing your number, has much greater consequences. Trust me, just try it for a week and you’ll be hooked.