Referrals open door to successful sales

Yet common sense, backed up by the numbers, clearly shows that a proper referral is the key to making the successful connection between buyer and seller, one in which the product is pitched in the best light and under favored circumstance.

In fact, conventional wisdom within experienced sales circles puts the close rate for referral selling within the range of 50 percent to 90 percent, a phenomenal result given the highly competitive nature of most selling environments.

Joanne S. Black, a leading expert on referral selling and the founder of No More Cold Calling, a sales training consultancy, said, “In my 40 years of sales experience, I’ve found that the best source of business is still the referral.”

Black believes that “cold calls” should be verboten; that “warm calls” are delusional (they’re just cold calls in disguise); and that we should only spend time talking to buyers who are predisposed to talk to us. For Black, “That spells referral.”

The irony is that most salespeople intuitively understand that successful selling is all about the relationship. They know that a strong referral delivers a pre-sold, highly qualified lead, one in which credibility and trust are established prior to the pitch in a buying environment where there is often little or no competition.

Prospects already are predisposed to listen and like what they hear. They generally spend more money when they buy, and they arrive at a buying decision faster.

Yet most salespeople, even the star performers, are guilty of failing to leverage the relationship. Few bother to ask for referrals. The reasons are varied, but most are tied to the psyche of the seller, primarily, a discomfort in asking for the lead, stemming, in turn, from a fear of rejection.

Most of us feel uncomfortable in asking for help and intruding on the relationship. For some, it’s a lack-of-skill issue – simply a matter of not knowing how to ask for the referral. For others, referral selling has never been an accepted part of the sales process. And because referral metrics are not a common element in the conversation, there is no perceived value in considering its use.

Those who have mastered the art of the referral sale traditionally are passionate about the subject. They believe it’s the only way to sell. They tend to be disciplined and obsessive about following the formula, and they possess a clear understanding of the methodology and why it works so well. Following are the steps for soliciting a referral:

• Be self-aware: Be very knowledgeable and aware of core strengths ... yours and the product’s. This is a knowledge and understanding that you can recite in your sleep.

• Seek the ideal prospect: Be specific in your own mind about customer match. You must be able to clearly define and articulate the profile of the ideal customer. Given the limitation in time and resources that confronts most salespeople, success often lies in knowing whom not to chase.

• Build a list: Develop a contact database of potential sources of referral. Resist the urge to discount anyone who is not a current client. Remember that leads can originate in the most unusual and unforeseen sources, from an airplane seat to a Rotary Club makeup meeting.

• Get it right: Learn the process of asking for the referral and practice incessantly. The best of breed achieve that status more through repetitive practice than innate genius.

• Set goals: Selling is all about accountability. It’s how success is measured. And the best salespeople are always battling the target, reaching for the goal that is clearly visible a millimeter in front of their nose. It’s the reason that the insurance sales representative will always solicit those five contacts from your address book, a somewhat inauthentic execution of an otherwise admirable strategy.

Although networking organizations hew closely to the belief and practice of referral selling, they represent a sliver of the sales practitioner universe.

For the bulk of the sales cadres who ply the communications highways and concrete roadways of the buy-sell universe, it bears remembering that referral selling never wastes time, significantly increases the odds of success, costs little or nothing in terms of dollars and cents and derives its success from the most of natural of human instincts … the desire to do business with those we know.

As Black notes, all it takes “is clarity of purpose, a clear direction and an accompanying expectation.”

Alf Nucifora is a California-based marketing consultant.