If you’re still struggling with lead generation and not getting enough qualified prospects, you may want to try “referralspecting.” Instead of depending on cold calls, direct mail or company-provided leads, become an advisor who generates significant numbers of referrals. If you follow these four steps religiously, you can get most of your business—with more and better-qualified prospects—from client referrals within just a few months.
1. Set the expectations from the beginning. To generate large numbers of referrals, you must establish the expectation of a large number of qualified referrals from the beginning. The traditional referral-gathering formula is: Make the sale, do a good job, ask for referrals. Most advisors seek referrals to new prospects using this typical formula with the “ask” at the end—and see typically poor results. Make it clear from the outset that you work on a referral basis and fully expect the client to have referrals for you at the appropriate time. Start during the initial meeting with the prospect, continue throughout the sales process, and follow up after the sale.
2. Agree on terms. If you want to be a successful referralspector, you must take the extra time with your client to make sure you are both on the same page. There are three things you need to go over with him:
A: Make sure your client understands what you mean by referral. Sound ridiculous? Everyone has his own idea of what a referral is or isn’t. You cannot expect your customer to fully know what you want from him. Instead, explain in detail what a real referral is; otherwise, you stand an excellent chance of getting the same types of unqualified names and phone numbers you were getting from your lead service.
B. Spell out how many referrals you expect; otherwise, your client may only give you the minimum number of referrals he feels he can legitimately give you. So unless you are happy with one or two referrals, go ahead and give your client a benchmark to reach.
C. You must agree on what you will deliver in exchange for the referral. In other words, you have to earn your clients’ referrals, and they should know that upfront as well. To perform to your clients’ expectations, you have to understand what constitutes a quality job for them. You absolutely must make sure you understand their expectations—and they must understand your capabilities.
3. Over-deliver. OK, it’s an old cliché, but “under-promise and over-deliver” is an absolute in referral selling. Part of your relationship agreement with clients is that if you perform to their satisfaction, you will get referrals. You earn the referrals—they are part of your compensation. If you exceed their expectations, they’re more likely to give more referrals. So make “going one better” a top priority.
4. Get the referrals. Now that you’ve done a fantastic job, you want your payment. Since you’ve done steps 1 through 3 correctly, your client is probably ready to give you several names and phone numbers. Don’t accept them without asking lots of questions, such as what your client liked about your service, products, delivery and communication during the sale and other pertinent items. Take notes. Then ask about each of the individuals and companies on your customer’s referral list. Get as much information as you can about each.
After you have gathered this information, ask if your client would write a personal referral letter to each person or, better yet, if he would prefer you write the letters and submit them for his signature. Since you have notes about their experience with you, and you have detailed information about the referred person, you might be in a position to write a better letter than your client is. Or, even better, ask your client to call the person and introduce you—or arrange a lunch for the three of you. Regardless of whether it’s a call, letter or lunch, you are virtually guaranteed a meeting on terms that are favorable to you.
So, is it that simple? Yes and no. The above steps outline the process for generating large numbers of referrals. The act of putting them into practice and making them work does take thought, practice and time. Like everything else in sales, the devil is in the details. If you’re having trouble doing it by trial and error, you may want to consider hiring a sales coach to help you. But either way, you need to convert your sales business from a hit-and-miss prospecting system to one that is proven to generate results and increase your income even as you de-emphasize the “sell.”
Used with permission. All rights reserved.
Paul McCord is the author of Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals (John Wiley & Sons, 2007) and a leading authority on lead generation, referral selling and personal marketing. Contact him at email@example.com.