Sales and Sales Management Blog

February 25, 2013

Building Your Business on Referrals Pt 3: You Don’t Need Referrals, You Need Introductions

How often as a B2B seller have you been advised to ask your client for referrals?  If your experience is typical then you’ve heard that advice just about every time you turn around.

Most of us have had it pounded into our heads that we need to ask for referrals after the sale has been completed. We just need to do a good job for our client and then, after the sale, ask them if they know of anyone who could benefit from our products or services and we’ll easily and rapidly grow our business.

Depending upon the seller you ask, that referral question can take many different forms, such as:

“Ms. Client, who do you know that could use my products or services?”

“Mr. Client, who do you know that I should be talking to?”

“Mr. Client, who else do you know that I could help?”

“Ms. Client, if you happen to run across anyone else that I might be able to help, would you give them one of my cards?”

But no matter the specific language of the question we’ve been taught to ask, almost all of them have the same root problem that results in our receiving few high quality referrals: all of the questions most of us have been taught to ask require our client to do our work for us.

In virtually every case we are asking our client to come up with the name of someone they know who they believe could use our services—even though our client really doesn’t know who is a really strong prospect for us; even though our client doesn’t know all of our capabilities; and we’ve put them on the spot asking them to come up with a great referral for us with only a few seconds to think about it.

Not surprisingly most of the “referrals” we get—usually nothing more than the name and phone number—prove to be no more qualified than if we had thrown darts at the phonebook and are, thus, nothing more than time wasters.  Certainly one here and there turns into a client—but for most of us the pickings are pretty slim.

So if asking your client for a referral to someone they know who might need your products or services doesn’t work very well, is it possible to get a large number of high quality referrals from clients?

Yes, absolutely it is.

But instead of asking a weak question like “who do you know that might be able to use my products or services,” it makes far more sense for us to do the hard work of finding out who our client can refer by figuring out who our client knows that we know is a great prospect for us and then asking for a direct introduction to that person.

This method demands more than simply popping off a question at the end of the sale trying to get your client to do your work, but it is powerful because:

  • You are making it so easy for your client to give a great referral that all they have to do is say “yes”
  • You have relieved your client of an uncomfortable and often unwanted burden
  • You are far more likely to get a positive response from your client because instead of asking them to rummage around their mental file cabinet trying to figure out who to refer, you’re asking for a specific and easy to fulfill action—an introduction to someone they know
  • The introduction you get will be to a quality prospect because it will be to a prospect that you pick and that you know you want to be introduced to
  • You will have a much greater chance of setting an appointment with the prospect by being personally introduced by your client than if you just get their name and phone number and call them out of the blue
  • Over time, you can get multiple high quality introductions from each client. They become a never ending source of quality referrals by simply asking for additional specific introductions as you earn them

By investing the time and effort to do the detective work necessary to discover who your client knows that you know you want to be referred to you are not only taking the burden off your client, you’re making it so easy for your client to give you a great referral that the only thing they have to do is say “yes” when you ask.

Instead of relying on your client to come up with a top referral you’re insuring that the introduction you receive is one that you want to receive.

The primary issue now becomes how to discover who your client knows that you know you want to be referred to.  That issue demands developing some detective talents such as keen observation, listening, and analytical skills—skills that will be covered in part 4 of this series on referrals.

In addition to being able to uncover great introductions that your client can give you, the question you ask naturally changes.  Instead of asking your client to come up with a name and phone number, your question will now be geared toward confirming that the client knows your intended prospect and then moves on to asking for the introduction.

Depending upon the circumstances the request could look very much like this:

You: “Don, I’ve been trying to reach Janet Smith over at XYZ Company for some time and haven’t been able to connect and it occurred to me that you might know her.  Do you know Janet?”  (Of course since you’ve done your homework you have good reason to believe he knows her.)

Client: “Sure, I know Janet. Why?”

You:  “Great.  Would you be comfortable introducing me to her?”

If you have done your job well and earned your client’s trust and respect, there is an extremely high probability your client will readily agree to introduce you to Janet.  Instead of asking your client to do your work for you all he has had to do was say “yes.”

Although this process is most easily implemented by B2B sellers, it also works well for B2C sellers in situations where the seller has the opportunity to know their client very well.

Rather than asking your client to rack their brain and do your prospecting for you—something they are ill prepared to do—take the time and put in the effort to do the work for your client and you’ll turn introductions from clients into a major source of your new business.

Referrals—rather direct introductions–can be the cornerstone of your sales business if you learn to do a little detective work and make it easy for your clients to give the great referrals you’ve always wanted.

February 21, 2013

Building Your Business on Referrals Pt. 2: Asking for Referrals is Bad Practice

OK, I know, you’ve been told your entire life as a salesperson that you have to ask for referrals and that if you don’t you’ll fail.  But if you’re like most sellers you’ve asked and on occasion get a name and phone number of someone that turns into a new client, but most of the time the names and numbers you get are about as targeted as taking a dart and throwing blindly at the phone book.

The above situation is so common that a great many sellers simply stop asking, thinking that referrals are nothing more than sales mythology, while others, thinking they are the cause of the failure to generate significant numbers of quality referrals, continue to ask with little success and a growing sense of frustration and failure.

The reality isn’t that generating quality referrals are nothing more than a myth or that the seller himself is the root cause of referral generation failure.

Referral generation fails primarily because of the way most sellers have been taught to seek referrals.  The seller isn’t the problem; the strategy they’ve been taught is at fault.

How have most of us been taught to get referrals? 

For the most part out referral training consists of nothing more than “do a good job for your client and ask for referrals with a question such as, ‘Mr. Prospect, do you know anyone else who I might be able to help as I’ve helped you,’ or ‘Ms. Prospect, do you know of anyone who might benefit from my products or services?’

Certainly on occasion the training may be a bit more in-depth—one trainer might encourage sellers to ask the question early in the sale while another stresses the need to ask only after the sale has been completed, or one trainer might use slightly different phraseology or might encourage the seller to ask for a specific number of referrals, but the essence of the training is the same—do a good job and ask for referrals.

The problem is the process taught causes more problems than it solves.

First, the good news—the traditional referral training solves a major problem—it encourages the seller to seek referrals.  Although the success ratio is typically very low, it does produce the occasional prospect that turns into a client. 

Now the bad news—it fritters away one of the most valuable business generation resources a seller has—the potential quality referrals from a satisfied client.

Let’s take a look at the primary problems the traditional referral “method” creates:

  • The Referral Question Comes Out of the Blue:  Most clients are not comfortable when put on the spot to give referrals.  When we ask for a referral we may be thinking that we’re asking a small favor but most clients take the request far more seriously.  When a client gives a referral they believe they are putting their reputation on the line, something most don’t do lightly.  Clients need time to become comfortable with the idea of giving referrals.  If we really want quality referrals, we have to allow our client the time to become comfortable with the idea of giving us referrals before we ask.
  • We Don’t Give Our Client the Opportunity to Give Quality Referrals:  When we follow the traditional training of “do a good job and ask for referrals” we literally stand in front of our client (or are holding on the phone) expecting them to pop off the names of great prospects for us.  We are asking them to go through their mental file cabinet and come up with great referrals in the course of 10 or 15 seconds.  That is simply an unrealistic expectation on our part and we usually get what we deserve when we put a client in that position—little to nothing of value.
  • Our Client Doesn’t Know Who a Great Prospect for Us Is:  Not only do we expect our client to be able to give great referrals just off the top of their head, we expect them to know exactly who we can help when much of the time our client hasn’t had the opportunity to fully appreciate what we’ve done for them, much less know what all of our capabilities are and who is really a top prospect for us.  We’re asking our client to do the impossible—know our business as well as we know it.
  • It Ignores Human Nature:  The traditional referral request is one-sided and offers the client no reason to give referrals.  There are, obviously, clients who will give referrals even when there is nothing in it for them, but human nature being what it is, the referral request can be far more successful if it can be shown that it benefits the client as well as the seller.
  • It Makes the Client do the Work:  Rather than making it easy for our clients to give us great referrals, we make it as difficult as possible by asking them to do something they are ill prepared–and often not inclined–to do.  Giving high quality referrals should be so easy for our client that literally all they have to do is say “yes.”

Although referral generation as traditionally taught is laden with self-defeating issues, referral generation when practiced properly can be a highly successful business generation tool—one that can literally be the cornerstone of a successful business.

February 19, 2013

Building Your Business on Referrals Part 1: Understanding the 4 Pillars of a Successful Referral

At first glance, a referral is a pretty simple thing.  For most sellers, managers, and trainers, a referral is just a name and phone number that a client has given once the seller has completed the sale, has done a good job for the client, and then asks a general question such as, “do you know of anyone else that I might be able to help?,” or, “do you know of anyone else that might benefit from my products and services?”.

Once a seller has received a referral, contacting the referred party is just as simple.  The seller will call the referred party mentioning to him or her that the client, which the prospect knows, referred the seller to them, or on occasion they will ask the client to write a referral letter to the prospect and then the seller will call the prospect after they have received the letter.  A very simple, straightforward process.

Unfortunately, this “do a good job and ask for a referral” process is totally and completely wrong, and has been proven by millions of sellers to not work worth a darn.  Nevertheless, this is what is taught in almost every sales course that mentions referrals.  And not only is it a waste of time and effort, it deceives the seller who don’t succeed when using it into believing that the fault lies with him or her, not with a “system” that doesn’t work.

Generating a large number of high quality referrals requires far more than “doing a good job and asking for a referral.”

If you want to generate a large number of high quality referrals from your clients, you must understand what creates a quality referral.

A high quality referral is built on a foundation that has four solid pillars—and as the seller; you have control over three of them:

  1. Your relationship with your client:  Most clients don’t give referrals because they like you or even because you did a good job.  Certainly there are a few clients that will give referrals at the drop of a hat, but most clients hate to give referrals and unless they have a deep trust that you will not embarrass them and that you’ll deal honestly and competently with the prospect they refer, they won’t be willing to give quality referrals.Most clients believe that when they give a referral they’re not just suggesting that someone they know speak to the person they are referring, they believe that they are endorsing the seller, in essence telling the person they refer to the seller that they don’t need to do any research because the referrer has already done it and this person they’re referring is the best choice.  To get clients to take this step doesn’t come without having built a strong bond of trust.
  2. Your client’s purchasing experience: Discover what your client’s purchasing expectations and priorities are, then meet and, hopefully, exceed them.Few sellers ever exceed their client’s expectations because even though they think they know what the client’s expectations are, they never really try to find out, they never ask.  You cannot afford to guess or “think” you know what your client’s expectations are–you must know exactly, and you can only do that by discussing them with your client and then making sure you meet or exceed them–nothing less will do.If you don’t specifically ask your client what their expectations are, the best you can do is meet or exceed what you think your client’s expectations should be.Clients assume that anyone they refer you to will have a similar or WORSE purchasing experience than they had.  The further away from their desired purchasing experience they have, the less likely they will be to give a quality referral.
  3. The relationship between your client and the prospect:  This is the one pillar you have no control over.  Clients will refer you to people they have very strong, positive relationships with–and people they have very negative relationships with.  If the prospect trusts and respects your client, some of that trust and respect will be automatically imbued to you and you start your relationship with them from a position of strength.  On the other hand, if the prospect distrusts or doesn’t respect your client, some of that distrust or disrespect will also be imbued to you and you will start your relationship with them from a position of weakness.  Your job is to find out exactly what the relationship between client and prospect is and then plan you introduction approach to them accordingly.
  4. Your initial contact with the prospect:  To this point you’ve invested a great deal time and effort in establishing your relationship with your client, making sure they have exactly the purchasing experience they want, and finding out what the relationship is between your client and the prospect they are referring.  After investing so much time and attention to get this far, the last thing you want is just a name and phone number.  Instead of getting a traditional “referral” consisting of the name and phone number of the prospect and permission to use your client’s name, get a direct introduction from your client to the prospect.There are three primary methods of getting a direct introduction:

    Letter of introduction from your client to the prospect:  Ask your client to write a letter introducing you to the prospect.  However, once you’ve asked your client to write the letter, let them know that you know how busy they are and then offer to take the burden off of them by writing the letter for their signature.  If you allow them to write the letter it won’t communicate a reason for the prospect to meet with you and it will be written on their schedule—which could be never.The letter you write should give a brief overview of what you’ve done for your client and why the client believes it would be beneficial for the prospect to meet with you, as well as the time and date to expect a call from you.  Have your client sign it. Phone the prospect at the exact time your client indicated you’d be calling.

    Introductory phone call from your client to the prospect:  An even stronger introduction is a phone call from your client to the prospect to introduce you.  This method puts additional pressure on the prospect to agree to set an appointment with you as it is difficult for the prospect to say “no” to your meeting request when they know that their friend, co-worker, or associate is standing next to you when you ask.The downside to a phone call is it gives the prospect the opportunity to ask questions of your client. If there were aspects to the sale that didn’t go well there is a good chance they will surface during the phone call.

    Lunch meeting with your client, the prospect, and yourself:  A tremendously strong introduction method.  Have your client invite the prospect to lunch or coffee with the three of you. Encourage your client to let the prospect know this is NOT a sales meeting, just an opportunity for the two of you to meet one another.

    One of the strange things that often happens during the meeting is the client ends up being your salesperson and you are there simply as the consultant.  And, again, it is very difficult for the prospect to say “no” when you request a meeting.

As seen above, you have control of the majority of the pillars upon which a referral is based.  If any of the above is weak, your likelihood of generating quality referrals will decline and the weakness must be made up elsewhere.  In actuality, if one of the first two segments is weak, you will not be getting quality referrals–period.  However, you can mitigate the third one by using a strong method of introduction.

Generating a large number of quality sales isn’t done by chance or luck, and neither is generating a large number of high quality referrals.   Just as you need a well thought out process to consistently sell, you need a well thought out process to generate quality referrals.  You can significantly increase the volume and the success of your referrals if you understand the dynamics that generate quality referrals and then control those dynamics.

December 27, 2012

Make It Easy for Your Client to Give You Top Quality Referrals

Are you finding that you’re just not getting the number of quality referrals you want from your clients? Chances are you said yes because that’s the case with most sellers. Oh, sure, we all have some clients that will give us referrals all day long. Just ask and they’ll give you name after name. Other clients, the majority, aren’t nearly as generous with their referrals.

The biggest problem in both cases is so often the referral we get isn’t much better than pointing at a name in the phonebook at random.

How can you guarantee that you get great referrals? Simple. Make sure the client gives you a great referral by finding the referral for them to give you, rather than relying on them coming up with a quality referral to give.

The reality is that clients really don’t know who we’re looking for and most of them just don’t have a real incentive to invest the time and energy to come up with a great referral for us.

But we know who is a great referral for us. And certainly we’re willing to invest the time and energy to find a great referral (if we’re not, we have some real serious issues to deal with).

Since we’re the one with the need; and we’re the one with the desire; and we’re the one who knows who makes a good referral for us, why would we rely on anyone else other than our self to come up with the referral?

So how can we come up with the referral for our client to give us?

Here are three steps to guaranteeing you get great referrals from your clients:

  1. Get Your Client On-board to Give Referrals. Most sellers wait until after the sale has been completed before they bring up the idea of referrals. Bad idea.

    Most clients need time to get comfortable with the idea of giving referrals, so bring up referrals early in the relationship. Don’t ask for referrals; just let your client know that your business is built on referrals and then drop referral seeds as the sale progresses. Since your prospects and clients aren’t stupid, if they hear you mention referrals often in a casual manner, they’ll get the impression referrals are important to you and they will be expecting you to ask for them at some point.

  2. Find Out Who Your Client Knows. We’ve already established that in order to get great referrals you have to do the work for your client, so do it by discovering during the course of the relationship who they know that you know you want to be referred to.

    How do you find out? Through small-talk (who do they mention in conversation they know); paying attention to what’s in their environment (pictures, association directories, membership plaques, and such); their background (where did they work previously); their work (what vendors and suppliers do they interact with). Your job is to be a detective and to uncover the relationships they have with people or companies that you know you want to be referred to. The more you uncover the more quality referrals you uncover.

  3. Don’t Ask for Referrals, Ask for THE Referral. Now when it comes time to ask for referrals, you’re not going to be like every other seller and ask a weak question such as, “Donna, do you happen to know anyone else (or another company) that might be able to use my products or services (or that I can help—or any other such weak question)?”

    Instead you’re going to ask for a specific referral: “Donna, I’ve been trying to connect with David Jones for some time without success. You mentioned that you’ve worked with David for several years, would you be comfortable introducing me to him?” You know she knows David. You have reason to believe David is a good prospect for you. Don’t waste Donna’s time with that weak general referral question; ask to get connected to a person you know she knows that you know you want to connect with.

Referrals can be the foundation of your sales business if you just develop the skills necessary to be a referral-based salesperson. If Donna knows three people or companies you know you want to be referred to and you can get introductions to them from her, how much time and energy have you saved getting those three introductions through referrals instead of cold calling or sending out direct mail or hoping to bump into them at a networking event?

Forget what you’ve been taught about asking for referrals. Referral generation is a PROACTIVE process where you do the work, not your client. Your client doesn’t have the motivation, you do. They don’t have the understanding of who makes a good referral like you do. Your client doesn’t have the time to invest in figuring out a good referral like you do. It’s your business, not theirs. Make it easy to give quality referrals—you’ll get a ton of them if you do.

August 15, 2012

Guest Article: “Building Your Sales Pipeline Is Not a One Step Process,” by Lori Richardson

Filed under: lead generation,prospecting — Paul McCord @ 10:34 am
Tags: , ,

Building Your Sales Pipeline Is Not a One Step Process
by Lori Richardson

Do You Have a Sales Funnel?

For many years, the “sales explanation industry” has worked with and discussed a Funnel or a Pipeline model to explain how you need many more leads to eventually turn into prospects, and then ultimately a smaller subset who become actual customers. Hence using a picture of a funnel gives a visual on how you need more at the top to end up with some at the bottom. I’ve used a pipeline for years rather than a funnel,  so am used to talking about the front, middle, and end of a pipeline. Whichever works for your visual, use that.

To use a CRM, or Contact Relationship Management system well – you need more than tools – you must have a way – a process and a methodology –  to do the following things we will be talking about to grow revenues.

Can you find prospective customers – ideally who are “more likely” to do business with you than “less likely”. There is little point to attracting thousands of people your way who are not likely to do business with you. There is a whole lot of sense in drawing thousands of people your way who are more probable to do business with you someday. These are company and individual relationships that you want to nurture.  The phrase “nurture marketing” came from this idea.

People go wrong because they just buy tools– they import their mish-mash of “contacts” – names in whatever system they were using, such as their e-mail application. Contacts get imported in, and then sometimes people just wait for the magic to happen.

Magic?  Just like there is no crying in baseball, there is no magic in selling. It takes a clean set of nurtured contacts over time – who know and trust you, and who find the value in your offering to grow sales. Through multiple contacts to the right contacts (decision makers) you can create sales opportunities and bring them to closure.

Today we’ll talk about the front end of the pipeline (or for you funnel fans, ToFu – Top of Funnel, as coined by Hubspot).

You MUST have tools that can:

help you find and /or attract prospects

look for the trigger events in their businesses (for compelling reasons to contact them)

allow you to learn about them and what they need

offer them something of value – be it an idea or a whole e-book of ideas

build and maintain a robust group of people who are more probable to work with your company

This is the front-end of your sales process.

So, do you have tools that can do this for you? Do you have strategic partners, vendors or employees helping you with this?

It’s 2012. Don’t put junk in your sales pipeline.

Get rid of those in your pipeline who are just filling space. Remove those problem people who don’t seem that they will ever work with you. Delete them. Remove people you have not connected with in a long time. You need to focus on less companies and work to do more with them.  Why? To keep your focus, to keep your niched offerings (you do have a niche, right?) and to make it easier on yourself and those who work with you.  It’s also way easier to work with people who DO somewhat get what you do, or are more interested than others.

Look for these types of tools and services:

Lead list building

Web visitor tracking

Lead capture

Lead nurturing

Trigger Alerting tools

A Word about e-Mail:

No More Tacky E-Mail in 2012 Please!

Dear vendor: you are part of a business, and you need tools that manage e-mail so that no one is a victim of visible group email anymore. I, for one, won’t do business with a company who openly exposes my email within a group – this is a practice that should have stopped a couple years ago. Further, you need to use a tool that will track open rates so you know how effective you are.  This is very important also: segment your e-mail so that when someone does sign up for one of your offerings, they go into another bucket, and they don’t get any more “last chance to sign up” e-mails. Sophisticated e-mail tools have been doing that for years. If you are still doing any of these things, you need to stop these primitive marketing practices right away!

Let’s step it up this year with better management of the FRONT-END of our sales process. If you are already doing this, fantastic – post in our comments what you are using that is working to help you manage and grow the right prospects for your business.

Lori Richardson writes, speaks, trains, and mentors company leaders on tactical ways to grow revenues. Her company, Score More Sales helps with systems, lead development, and prospecting for technology and financial services companies.

March 18, 2012

Guest Article, Sales Lead Brownouts Produce Sales Dips Wihin Three Months, Leading to Pipeleine Failure, by James Obermayer

Filed under: lead generation — Paul McCord @ 10:04 am
Tags: ,

Sales Lead Brownouts Produce Sales Dips Within Three Months, Leading to Pipeline Failure.1
by James Obermayer

“Companies often decide to curtail lead generation spending because cash flow slows and sales stagnate.”

Please reread that last sentence.  Does it make sense?  It should read:

“Companies that curtail lead generation spending because cash flow slows and sales stagnate see a further decline in sales for three to twelve months thereafter because the sales pipeline has been reduced.”

Of course, I can understand caution when cash is short, but slowing down lead generation is not the way out of the morass.  Whether you average 100 inquiries or a thousand a month, if you cut lead generation spending and your lead count drops by 50% or more for three to six months, sales will correspondingly drop within three months.  What’s more, they’ll remain curtailed for three to six months after lead generation picks up.  It isn’t just a fact, it’s common sense.

This is how it works.

After lead generation spending is slashed, sales continue for about three months as the pipeline is drained of opportunities.  At this point, senior management is beating on sales management to increase the pipeline, and sales management replies with excuses for just about everything except lack of leads; that comes a month or so later when he or she gets desperate and every salesperson cries for leads.

It’s not too late, but recovery is several quarters away.  It takes months to build the inquiry level back up to what it was, and months longer to rebuild the pipeline.   Just consider the average sales cycle for your product and you’ll see that the rebuild time is considerable.  But there is no choice.  You can reignite sales lead flow, but it takes months for the pipeline to come back and months longer for sales to reappear.

What do you do?

First, don’t cut lead generation if you need an increase in sales: increase leads to increase sales.

When management requests a reduction in the lead generation budget explain the consequences:

Fewer leads for six months = smaller pipeline for nine months  = declining sales for three to twelve months.

Conversely:

Increased leads for three months  = increased pipeline within six months = increased sales for one year.

The lesson: curtail sales lead generation spending at your peril, understanding that there are consequences to your pipeline and to sales far into the future.

[1] James Obermayer, Sales and Marketing 365,  Racom Communications & Business Marketing Association, Evanston, Ill , #66, page 32.   Buy the book with all 365 Tips, Tricks, and Tactics for making more money all year long; from the publisher: $17.95

July 26, 2011

Managing the Crisis of Time in Sales

Time is one of the most critical factors in sales and it is one of the most difficult to manage.  As I discussed a few days ago, salespeople often are saddled with conflicting demands by management—to sell while still dedicating a tremendous number of hours involved in non-sales activities such as meetings, filling out reports, taking care of internal company matters that could well be handled by someone else, and, of course, customer service issues.

In many organizations there is a virtual time management crisis with their sales teams as they try to figure out how to get their salespeople out into the field selling.

Whether you manage a giant sales force that covers multiple countries or a modest sales team that covers a city or small region, figuring out how to effectively keep your salespeople selling instead of engaged in non-income producing activities is—or certainly should be—a major concern.

For decades managers have tried to find ways to help their sales team members increase sales.  Unfortunately, so often instead of encouraging sales, management ends up hindering their team’s ability to sell by loading them up with non-income producing activities such as attending useless meetings, completing reports, and performing customer service and even collection duties that should be being dealt with by others.

One of the most common activities managers expect their sales team members to perform is that of lead generator.  Almost every company, no matter the size or industry, relies on its sales team members to find and connect with quality prospects on their own.  Many of these companies ask their sellers to simply supplement market’s efforts in terms of lead generation, while others—a great many others—leave lead generation entirely to their salespeople.

In those companies where lead generation is completely the responsibility of the individual salesperson, sellers are required to come up with potential prospect names, research them to determine if they are really suspects or not, contact them, qualify them, set up an appointment, and then, finally, make some kind of presentation.

How much time and effort is spent on generating, contacting, and qualifying the lead?  Depending upon the product or service a salesperson can invest not just hours on a single potential prospect but literally days of time invested in a single lead.

That single lead—that very often results in not only a no sale but turns out to be not even a qualified prospect—can cost hundreds, maybe even thousands of dollars.

And we haven’t even begun to talk about all the time these same salespeople invest in developing their own marketing and sales materials, writing and sending prospecting letters, and spending huge amounts of time researching names that never make it to the “prospect” list..

The question then becomes are there realistic and cost effective strategies to significantly alleviate these costly activities? 

Fortunately there are some solutions that can make a great deal of sense no matter the size of the company.

Depending upon company size, hiring a small inside sales group whose function is to set appointments for the sales team can be very cost effective.  Having a staff that is paid on an hourly or percentage of closed sales basis can free up sellers to see more prospects and close more sales while decreasing the overall cost of the sale.  Many companies have very successfully created an inside sales team to supplement and support the outside team, significantly reducing the cost of each individual sale while increasing production.

For many companies who either don’t want to commitment to an inside sales team or who would like to ‘try out’ the concept before making the investment, outsourcing the lead generation and prospect qualification function to a call center outsourcing company is a perfect solution.  Outsourcing gives one the opportunity to free up the sales team without the long-term commitment an inside team would demand.

Another possibility would be to rely on marketing to more effectively qualify and nurture the leads they generate.  Often sellers reject leads generated by marketing because they believe them to be either of inferior quality or to be so far from sales ready that following up is a waste of time.  This isn’t to ignore that many times salespeople simply don’t follow-up on leads or they make a call and when they don’t connect they simply move on to another prospect.  But in many instances the quality of the leads are so poor that eventually sales rejects them out of hand.  Creating a more effective lead qualification and nurturing program can not only change sale’s view of company leads but can greatly reduce the cost of sales.

Whether you look to creating an inside team, outsourcing the function, or developing a more effective lead generation and nurturing program, finding a realistic solution to having salespeople act as lead generators, marketers, and salespeople will help to both increase production and reduce the cost of the individual sale.

July 16, 2011

Yes, Virginia, There Is a Secret to Sales Success

A little over one hundred years ago the father of a young 8 year old girl named Virginia O’Hanlon encouraged her to write to a then leading New York newspaper, The Sun, and ask the question she’d just asked him—if there were in fact a Santa Claus, for all of her friends were telling her that he really didn’t exist and she wanted to know if they were correct.

The Sun answered Virginia in one of the most famous editorials ever published—Yes, Virginia, There Is a Santa Claus.  The reply was a resounding YES, there is a Santa Claus and the writer of the editorial laid out his proof.

Unfortunately, today all too many deny there is a real secret to sales success also.  Like Virginia’s friends, the claim is made that there really isn’t one single thing that if done can guarantee success in sales.  No, they say, you must become a master of every aspect of selling and then you’ll be prepared to become successful.  Oh, sure, they’ll admit, a few here and there appear to succeed by blind luck, but they’re the exception, not the rule.  Forget your silly search for the magic bullet of selling and resign yourself to learning the minutia of sales before seriously turning your eye to becoming truly successful.

Many, many others are all too eager to promote the idea of the sales secret—and to let you know that they are the sole keepers of the great secret that so few have known.  Better yet, they tell you, they’ll be happy to share the secret with you, but since it is such a valuable thing and should only be shared with those who are truly deserving of knowing, they must make sure you are worthy.  But since they really don’t have any other way of discerning who is and who isn’t worthy, they must charge an exorbitant fee to keep the riff-raff and undeserving from attaining it–and since you have the money to acquire it, you must be worthy and deserving of being given the great secret (as soon as your check clears, of course)..

Lucky for you I know this great secret and I’ll give it to you—and it won’t cost you $1,995.  Won’t even cost $995.  Heck, I’m not even going to charge you $9.95.  I’m simply going to give it to you—no charge.

Why in the world would I give such a tremendous secret away for nothing?  Because I know that once learned, the vast majority won’t put it into practice.  You see, the secret is simple, but it is far from easy.

Anyone can take this secret and become a successful seller—just how successful will depend on their commitment to implementing it.

So what is this secret?

Is it a super-duper sales process?  No.

Maybe a super special leads list?  Nope, not that.

How about some special words that will immediately connect with prospects?  Not that either.

Could it be a special super power like a super hero has?   Now we’re getting warm.

The secret is a super power of sorts–one that few are capable of acquiring.

This super power is tough-mindedness.  It’s the ability to out work and out prospect your competitors.  It’s the ability to take the rejection, the ‘no’s’, the frustration of making calls and not reaching anyone, of being stopped dead by a gatekeeper, by having the phone slammed down in your ear, of networking until you feel like you can’t network anymore–and to then do it again and again and again until you’ve reached your goals.

The secret is simple—if you have the determination and commitment to prospect longer and harder than anyone else, you will become successful.

I’ve seen this truth worked out time after time as new sellers enter the field and out work and outperform even the top sellers in their office. They know nothing–but work their tails off and sell like crazy. Unfortunately, many times after they “learn” that they’re not supposed to be having the success that they’re having their production craters. They’ve “learned” how to be average. Sometimes we simply learn the wrong things–such as there isn’t a secret to sales success.

This isn’t to say that all the other things in sales aren’t important.  They are.  You need a great sales process; you need to know how to probe and discover needs and wants; you need to know how to solve issues.  There is a great deal that every professional seller must learn.

But there is still one key to being successful in sales above all others—prospecting.

The better you become at qualifying suspects; the better you become at finding and solving real needs; the better you become at finding and connecting with your quality prospects; the easier success will be and the less time you’ll have to spend prospecting.

That being said, even if you know nothing about sales, have the world’s worst close ratio, have no discretion in who you spend time talking to. and haven’t the slightest idea of the difference between a closed-end and open-end question, if you outwork your competition in prospecting, you will reach a measure of success.

Don’t let anyone tell you there isn’t a simple secret to success in selling that alone can make you successful because there is.  It certainly isn’t complicated—but it is hard.  And it can be claimed and implemented by anyone. 

By all means, acquire a great sales process, learn the most sophisticated and effective prospecting strategies you can, learn to become great at identifying and solving prospect issues, learn all you can to make selling easier, but if you aren’t having the success you want, take heart—you now have the secret.

Take it, claim it as yours, implement it, and enjoy the rewards.

And know that even if your competitors know it too, few, if any, will claim it as their own because it simply costs too much for most.

June 11, 2011

Understand the Four Pillars of a Referral and You’ll Get More and Better Referrals

At first glance, a referral is a pretty simple thing.  For most salespeople, managers, and trainers, a referral is just a name and phone number that a client has given the salesperson once the salesperson has completed the sale and has done a good job for the client.

Once a salesperson has received a referral, contacting the referred party is just as simple.  The salesperson either will call the referred party mentioning to him or her that the client, which they know, referred the salesperson to them, or will ask the client to write a referral letter to the prospect and then the salesperson will call the prospect after they have received the letter.  A very simple, straightforward process.

Unfortunately, this process is totally and completely wrong, and has been proven by millions of salespeople to not work worth a darn. Nevertheless, this is what is taught in almost every sales course in the world.  And not only is it a waste of time and effort, it deceives the salespeople who don’t succeed with it into believing that the fault lies with them, not with a “system” that doesn’t work.

Generating a large number of high quality referrals requires far more than “doing a good job and asking for referrals.”  It requires a systematic process of planting referral seeds, watering them at every chance, weeding out problems and issues, and then reaping the rewards. 

If you want to generate a large number of high quality referrals from your clients, you must understand what a referral is based on.

A Referral is Based on a Foundation with Four Pillars-and you can control 3 of them:

The relationship between you and your client:  you can control this pillar of the foundation.  By instituting the full client relationship building process in detailed in Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals (John Wiley and Sons, 2007), you can create a strong relationship with your client built on mutual trust.  Clients don’t give referrals because they like you or even because you did a good job.  Clients hate to give referrals and unless they have a deep trust that you will not embarrass them and that you’ll deal honestly with the prospect they refer, they won’t be willing to give quality referrals.

Your client’s purchasing experience: you can control this pillar of the foundation.  You must discover exactly what your client’s expectations and priorities are, then meet-, and hopefully exceed them.  You cannot afford to guess or “think” you know what these are-you must know exactly and you can only do that by discussing them with your client and then making sure you meet them or exceed them-nothing less will do.

The relationship between your client and the prospect: you have no control over this pillar.  Clients will refer you to people they have very strong, positive relationships with and people they have very negative relationships with.  If the prospect trusts and respects our client, some that trust and respect will be automatically imbued to you.  On the other hand, if the prospect distrusts or doesn’t respect your client, some of that distrust or disrespect will also be imbued to you.  Your job is to find out exactly what the relationship between client and prospect is and then plan you approach accordingly.

Your initial contact with the prospect: you control this pillar also.  If you have built your relationship with the client properly, your client will be happy to contact the prospect in whatever method you desire.  As outlined in Creating a Million Dollar a Year Sales Income, there are a number of methods of contacting clients, each with their own pros and cons, depending on the strength or weakness of the client/prospect relationship.

As seen above, you have control of the majority of the pillars upon which a referral is based.  If any of the above is weak, your likelihood of generating quality referrals will decline and the weakness must be made up elsewhere.  In actuality, if one of the first two segments is weak, you will not be getting quality referrals-period.  However, you can mitigate the affects of the last two.

If the relationship between client and prospect is weak, use a stronger contact method.  Moreover, if the contact method is weak, convert the method into a stronger one.  For example, if your contact method is a phone call to a prospect who has a weak relationship with your client, try to bring in one or two other clients the prospect may know by reputation to build additional credibility.  Better yet, try to arrange a conference call between the prospect and your client.

Generating a large number of quality sales isn’t done by chance or luck, and neither is generating a large number of high quality referrals. Just as you need a well thought out process to consistently sell, you need a well thought out process to generate quality referrals.   You can significantly increase the volume and the success of your referrals if you understand the dynamics that generate quality referrals and then control those dynamics.

May 10, 2011

Bust Your Slump: Fast Track Referrals to Fill Your Pipeline in 30 Days

This is one of the twelve strategies presented in my newest book, Bust Your Slump: A Dozen Slump Busting Strategies to Fill Your Pipeline in 40 Days, available at Amazon, Barnes and Noble, or any fine bookseller.

 

Referrals are difficult for most salespeople to generate. Certainly, many will manage to get a name and phone number here and there. However, most of those names and phone numbers are little better than taking out the phonebook and pointing at a name at random.

It need not be that way.

By learning a disciplined, effective, proven process for generating a large number of high quality referrals from each of your clients and even your prospects, referral selling can become a reality. It is for many of the top producers in every industry.

Yet of course, you can’t possibly learn and implement a systematic process of referral generation and expect to see significant results in only 30 days.

The good news, however, is that you can still generate a substantial flow of business in only 30 days if you learn to turbo charge your client’s ability to give you a large number of quality referrals in a very short period of time–virtually overnight.

To Whom Do You Want To Be Referred?

If you expect to use referrals as an igniter of your pipeline in short order, you’ll have to do all of the work for your clients. Asking your database of clients for referrals will generate referrals if done correctly. However, the fruits of that request won’t be seen quickly.

You, of course, don’t have the luxury of waiting. You need business NOW.

You’re going to make giving referrals super easy for your client.

Sit down right now and draw up a list of 100 individuals or companies YOU KNOW you want to be referred to. Be specific. List the name, the phone number and the address of each individual or the name, phone number, address, and the specific person within the company for each company you wish to be referred to.

You may have to do some serious research. Nevertheless, your list is the critical part of this strategy.

Don’t stop at 50, or 70, or 90. List a minimum of 100 individuals or companies. Remember, you’re going to make it easy for your client to refer you. Someone must do the work, and that’s you.

When making your list, leave room on the right side of the sheet beside each name to put the name of the person who is going to refer you to that person or company.

Who Is Going To Refer You?

Great. You know 100 individuals or companies you want to be referred to.

So, how are you going to get referred to them? By your clients, of course.

Now, take your database of clients and examine each one. Which client do you have reason to believe can refer you to the first person on your list? The second? The third?

The more you know about each of your clients, the easier this part of the task will be. Hopefully, you’ve come to know the majority of your clients well.

Beside each prospect list the client–and their phone number–that you believe can refer you to that prospect.

If you have a list of 100 people or companies you know you want to be referred to, you’ll probably be able to identify 70 or so that you have reason to believe one of your clients may know and can refer you to.

If you have 70 prospects your clients may know, you’ll probably find they can actually refer you to about 45 to 50 of them.

If you are referred to 45 to 50, you’ll probably set appoints with about 30 to 35.

If you set appointments with 35, multiply 35 by your average close ratio, which is what you can expect to close. If your close ratio is 40%, you should have in your hand 14 short-term sales.

Get the Referrals

Now the question is: how do you turn your list into referrals?

Naturally, you are going to go back to each of the clients that you have identified as a potential referrer to someone on your list.

Start with the clients you have the strongest relationship with first. Better to get some positive reinforcement from your best relationship clients before you approach those you have a weaker relationship with.

However, before you approach anyone, you need to get comfortable with what you.re going to say. You don’t want to stumble and stammer. You want to come across to your client as comfortable, confident, and in control.

Referrals can be tricky. They are hard to generate if your client doesn’t believe you expect them and that you have earned them. If you doubt, that doubt will be picked up by your client, who will be less likely to agree to give them. After all, if you don’t believe what you.re saying, why should your client?

Get your act together before you make your call to your first client.

Don’t ask for referrals via a letter or email. You will be far more successful if you ask in person. Short of that, you must make a personal phone call. Generating referrals is a relationship action, not an impersonal request. You must deal with your client on a one-on-one, personal level.

When you call, before bringing up the referrals you seek, find out if your client has ANY needs, concerns, or requests regarding your product or service. In other words, make sure you still have a happy and fully satisfied client. If you don’t, you cannot expect referrals. If the client is dissatisfied for any reason, instead of referrals to get, you have customer service work to perform.

Then, once you know your client is still on the team, explain that you have a favor to ask. You have two or three people you believe you can help but have not been successful in being able to meet through the normal course of business. These are people that you thought for whatever reason the client might know and are hoping that if they do know them, that they would be comfortable referring you to these prospects.

If you have done your research and matching of prospect to client well, your client will probably know one or two of the prospects you ask about.

Once they acknowledge they know them, find out how well. With a referral, you are hoping to build a relationship with the referred prospect based on their trust and respect for your client. If the prospect trusts and respects your client, some of that trust and respect is imbued to you, so you start your relationship with the prospect from a positive position.

However, the person you’re asking about may not trust and respect your client. If they are just casual acquaintances, their trust relationship is neutral, as will be your starting point. In addition, if the prospect distrusts and disrespects your client, your starting point will be from a negative position because some of the distrust for your client will also be imbued to you.

It is important that you know where you start–the stronger the relationship between client and prospect, the better your chances of getting an appointment and a sale.

If you have done your job for the client well, they should have no problems referring you into the prospects they know.

Work your way through your list of 100 prospects. You should have more than a month’s work ahead of you. Again, you will probably have about 45 to 50 prospects to contact and set appointments with.

Don’t Just Get Referred, Get Introduced

One of the biggest mistakes you can make with a referral is to simply get your client to agree to ?refer” you. That’s what the average salesperson does, and it doesn’t work well.

Instead of just getting a verbal referral, that is having your client say, “Sure, I’ll refer you to them,” get a direct introduction to the prospect.

Not only is a direct introduction more powerful than an agreement to use the client’s name, a direct introduction, if done correctly, almost guarantees a private meeting with the prospect.

Although there are a number of ways of getting a direct introduction, when under the time pressure of a 30-day explosion of production, you have 3 realistic options:

1. A Letter from Your Client Written by You for Your Client’s Signature. A letter of introduction will probably be your standard format for a direct introduction. Don’t ask your client to write the letter because they will not have the sense of urgency you need, nor will they write the letter you want written.

Instead, write the letter for your client, on your client’s stationary, in your client’s voice. Use a standard format: 1st paragraph informs the prospect of what you did for the client; the 2nd gives the prospect an idea of what you might be able to do for the them; the 3rd states an exact day and time the client has asked you to call the prospect; and the 4th has your client asking the prospect to call the client after your meeting with the prospect so the client can get the prospect’s opinion of you and your company (the reason the client requests this is because the client respects the prospect’s judgment).

A letter from your client might look like this:

Dear Dave,

Remember our conversation a couple of months ago where we discussed how difficult sales have been? I met a gentleman by the name of Paul McCord with McCord Training and Development who has shown our sales team some tremendous strategies to find and connect with really high quality prospects. His work is already paying off with the sales team.

Paul’s strategies are really effective and would work perfectly for your company. I really believe it would be beneficial for you to spend a few minutes speaking with Paul and seeing how he can help your sales team as he has mine.

I’ve asked Paul to give you a call Monday morning at 9:30 at your office.

Dave, I really respect your opinion, so once you’ve met with Paul, I’d like to hear what you think about him and his company.

See ya Monday at Lions,

Ron

Have your client sign the letter and then mail it to the prospect. A day or two after the letter should have arrived, call the prospect. Assume the prospect has not read the letter. When you reach the prospect, immediately refer to your client and the letter, not to yourself. If you introduce yourself first, the prospect may determine you are nothing but another tele-marketer before you have the opportunity to mention your client’s name and they may mentally block you out. Don’t give them the chance. Gain their interest with your client’s name first.

So instead of saying something like: “Mr. Thomas, my name is Paul McCord with McCord Training and Development; say ?Mr. Thomas, have you read the letter that Janet Smith sent you recently?”  After they respond, introduce yourself. For example, ?Great. I’m the person she was introducing, Paul McCord of McCord Training and Development.” If he hasn’t read the letter, say something like: “I understand you’re busy. Janet asked me to connect with you and sent the letter to let you know she had asked me to call you. I’m Paul McCord with McCord Training and Development.”

Some salespeople think they can get around the letter by simply acting as if a letter has been sent. Bad move. Some prospects, after getting off the phone will look for the letter. If it isn’t there, only one of two things could have happened: the letter was lost in the mail or the salesperson lied. Guess which one they’ll assume?

2. A Phone Call to the Prospect from Your Client While You’re in the Client’s Office. This is, of course, a more powerful introduction than a letter. Don’t let your client call without you being present. You want a direct introduction and you want to know everything that is said during the conversation.

Although powerful, this format has some drawbacks. This method is powerful because it is unusual and because it allows the prospect to ask direct questions about you, your product and the client’s purchasing experience. This format can backfire if there are questions you’d rather the prospect not ask. If there are weak areas in your client’s purchase, this may not be your best choice.

However, this format almost guarantees a meeting with the prospect since it is difficult for the prospect to decline a meeting request when the client is also on the line.

3. A Lunch Meeting with Your Client, the Prospect and Yourself.  This is, by far, the most powerful introduction format you can use in this circumstance. A lunch format allows you to get to know the prospect as a friend prior to getting to know them as a prospect or client. In addition, in this format, your client acts as your salesperson; during the lunch, you.re there as the consultant. As with the phone call format, it is very difficult for the prospect to decline a meeting request in front of the client. Furthermore, since the meeting format is informal, you’ll have the opportunity to learn a great deal about the prospect and their business long before you begin discussing business. If you pay attention, you should have a great deal of ammunition before the subject of business comes up.

Execution

Developing referrals from your clients can take some time. You must develop your list of prospects you want to be referred to; you have to match those prospects to individual clients in your database; you must contact each individual client for the referrals; write the letters or arrange the calls or lunches; and then have the actual contact with the prospect. All of this before you even has the individual meeting with the prospect.

This method requires you to be disciplined, very well organized, and committed to working the process. You must have a sense of urgency or time will slip away and you won’t meet your 30-day goal.

Commit yourself to having your prospect list completed within 2 days. Keep in mind, developing this list may take some serious research. Then, once you have your prospect list, you should have matched prospects to clients by the end of day three. By the end of the fourth day, you should have contacted and received referrals from several clients.

As soon as you have referrals, start the introduction process. Don’t try to go through all 100 prospects prior to beginning getting introductions or you’ll run out of time.

Again, this format calls for good organizational and coordination skills. You’ll have to be gathering referrals while working referrals.

More than likely, you’ll find that you’ve filled your pipeline and still have more referrals to pursue. Good job! Not only will you have jumpstarted your sales again, you’ll carry that momentum into the coming months as well.

Does It Work?

Linda Hollander knows very well how well this strategy works. Linda is a mortgage loan officer. Like most in the mortgage business, Linda has had some rough times over the past couple of years.

Linda began by listing as many specific people as she could that she knew she wanted to be referred to. She didn’t hit 100. She only came up with a little over 70 names.

She matched 57 names on her list to clients in her database.

She immediately began asking clients for referrals. She is still working on her original list even after 90 days.

During her first 30 days, Linda received 23 referrals; met with 16 prospects; initiated 5 loans, all refinance loans. During her second month she met with an additional 19 prospects (including some referrals from her newly referred clients) and closed an additional 7 loans (3 of which were referrals from her referred prospects).

In her first 60 days she closed 11 loans from referrals (one loan failed to close). Her previous average was closing slightly less than 4 loans a month. During the 2 month period her average loan closing went from 4 to 7, almost doubling her production. And she still has referrals to work, not to mention the long-term potential based on the new contacts she has made.

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