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The Underappreciated Power of Referrals

Posted by Mark Gordon | August 14, 2015

Referrals are beautiful yet sometimes forgotten in our industry. Not forgotten in the sense of hearing the word (you probably hear ‘referrals’ often), but forgotten in the sense of actually taking action to get the golden ‘R’ word.

Like it or not, referrals are the most powerful, yet overlooked and underappreciated way to get sales. A Scientific stat shows that an “average” sales rep closing rate is 10 percent. Now give that same rep a referral and their closing percent increases to over 50 percent.

It doesn’t take the mental capacity of Sir Isaac Newton to realize the staggering difference in percentages. Simply put, YOU SELL MORE WITH REFERRALS!

But don’t take our word for the sheer power of referrals. We took a “heat check” on their effectiveness and discussed the topic with a regional manager of a successful sales team.

When asked about referrals, he said the top five reps in his offices do one thing in common and it doesn’t involve canvassing for eight hours or talking to 100 people. The secret to their success is they all ask for referrals.

And why do they ask for referrals? Because like we already discussed, they more than double your sales and it literally takes 30 seconds to ask, without taking time out of your precious day to canvass.

So a great question to ask yourself is “what holds me back from getting more referrals” and “how to do I get more”?

During our extensive time in sales, we also urged reps to get referrals when possible and discovered the top two reasons reps don’t ask for referrals are:

  1. They fear of asking.
  2. They think they don’t need referrals to sell (arrogance/pride/ego).

Let’s be honest about fear for a moment.

You’re not at a middle school dance asking someone to “cut a rug” with you to “Lady in Red”! There is absolutely no reason you should fear asking for a referral, nor does it have to be awkward like some reps claim.

We always told our reps “you don’t know if you don’t ask”. And if that still doesn’t push you toward asking, maybe this stat from Dale Carnegie will.

91% of customers say they’d give referrals. Only 11% of salespeople ask for referrals.

Here is a quick checklist to ask yourself to make sure your leads appreciate your product and trust you.

  • Did you sell the lead on the how your product/service solves their problems?
  • Was your pitch honest and straightforward?
  • Did you display confidence in yourself, and your product?
  • Were you friendly?
  • Did you show a genuine effort to get to know the lead and build a relationship?

If you answered ‘yes’ to most or all the questions from this checklist, the hard part is over because you put forth the work to invest in your lead and earn their trust! So now is your time to strike while the iron is glowing with “white, hot heat brah”! ASK FOR REFERRALS!

Now for those who think they don’t need referrals to sell, we will be brief. Asking for referrals doesn’t show weakness in your ability to sell. It really shows intelligence because you understand how to work smarter, not necessarily harder. If you still have doubts, try asking for referrals during the next two weeks and see what it does to your sales.

We promise you will unleash the full potential of your inner sales beast and start doubling your sales!

Bonus: If doubling sales isn’t reason enough to ask for referrals, it also keeps your sales game sharp because if you don’t follow some, or all the checklist we provided, you’re better off asking for a referral from the family dog. Asking for referrals helps you invest more in each customer, which shows you care, which builds a better relationship, which leads to a happy customer, ultimately leading you to fewer canceled accounts. Referrals are a beautiful thing!

You might wonder after reading this if it’s all too good to be true but trust us, it’s not! Set a weekly goal for the amount of referrals you want and be ready to see your sales increase. Sell more, ASK FOR REFERRALS!

Did you find this useful? Anything you would add? Leave a comment and let us know.

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