Today's post from the Chamber of Commerce features business-growth advice for small companies.
There are many sales strategies, but none as effective as referral selling. While doing a certain amount of research on prospective clients teaches you more about their needs, it does not provide much of an actual sales advantage. So, how can people in sales best tap into the power of referral selling?
Joanne Black is the owner of No More Cold Calling™ and says simply that no one should ever have to make a cold call. She founded the business in 1996 and though the speed at which information is available has changed, the basics of referral selling remain the same.
“The most effective, productive way to build a business is through referrals,” Black insists. “People do business with people and that is built on relationships.” She says that the sales people she talks to tell her that referral selling has a minimum of a 50 percent conversion rate; many report up to 70 to 90 percent conversion. These numbers point to the vital role referral selling should play on all sales teams.
Black discussed some of the most important factors surrounding referral selling with me. She talked about five pieces of advice she gives to sales teams when it comes to building referral selling.
1. Referrals must be the priority. Rather than a supporting sales tactic, referral selling should be the primary method of business development.
2. Metrics must be in place. A well-developed measurement plan has to be part of all referral selling strategies. If there isn’t a plan, you may ask for a referral in the wrong way. Just like other sales tactics, the way referral selling is handled by each sales team should be modified based on the findings of the metrics involved.
3. Referral selling should be a daily activity. Building business through referral selling should be an integral part of everyday operations, not just a campaign that takes place once in a while.
4. Skill development is necessary. Never take referrals for granted as an “easy” sale. Remember that relationships are very personal and making deep connections takes some hard work. Referral selling should be treated like the business asset it truly is and sales teams should work toward skill betterment.
5. Overcoming the fear of rejection is vital. Besides being afraid of sales objections, people are afraid of referral rejections. In Joanne’s words, “People are not comfortable asking for referrals because they think they will get turned down. People are afraid that others are too busy.” In her experience, however, people are actually very happy to help provide referrals and introductions if they are able. It is a simple way to help others in an increasingly non-personal world.
In order for people to connect you to others that they know, you have to be willing to ask for the referral. Rather than going into a potential sale “cold,” think of all the steps that are cut out with the help of an introduction. Smart referral selling tactics leads to higher conversion and deeper client relationships.
For more tips from Joanne, check out her links:
Megan Totka is the Chief Editor for ChamberofCommerce.com. Browse ChamberofCommerce.com’s business directory to search over 11 million businesses.