Sales and Sales Management Blog

June 16, 2009

Boost Your Sales series: “Make Sure You Get One GREAT Referral,” by Bill Cates

Filed under: Personal Marketing,prospecting,Referral Selling,sales,selling — Paul McCord @ 6:07 am
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It’s Referrals and Word of Mouth week at the Boost Your Sales blog series. 

Today it’s Bill Cates

Tomorrow Joanne Black is here with “There’s No Such Thing as a Warm Sales Call”

Thursday Dr. Martin Russell discusses “Marketing Is What You Do When Your Product Is No Good”

and finally, on Friday I up with “Your Connections are Your Key to Your Success”

Stay tuned in next week as a great list of experts—Jeb Blount, Nigel Edelshain, Cindy King and Ardath Albee give great guidance on “Prospecting and Social Media”

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Make Sure You Get One GREAT Referral
By Bill Cates

One of the questions I always get is “How many names do you try to get in one sitting?”  My answer to this is “it depends.” It depends on how open your referral source is to the process; how much time and energy they feel like devoting. My personal record is 17 names in one phone call, and I’ve gotten 10-11 on several occasions. But NOT because I pushed my clients into this. I was ready to move on to another subject several times, but they kept on going, and going, and going (like the Eveready Energizer Bunny.)

 At a recent referral boot camp, an advisor told me his method. He told me that he doesn’t “brainstorm” for a lot of names. He says this to his clients, “I’m glad you really see the importance and value of the work we’ve done together. Who is one person that you know, who you think should really know about the work I do?”   He only asks for one referral each time, but the one he gets is always a good one – a high-trust referral.

Now, it must be said that this advisor is extremely successful and doesn’t need the quantity that some advisors need.  If you need more than just one great referral, do what I usually teach – come prepared to suggest several places (names, categories, target lists, etc.) and brainstorm with your client.  You can use this method as part of the overall brainstorming.

Remember, if you ask, they can always say, “no.”  If you don’t ask, the answers is always “no.”  Don’t run your career afraid of the word “no.” They won’t stop being your client, for goodness sakes.

Bill Cates is the author of Get More Referrals Now! and Don’t Keep Me a Secret! To receive Bill’s complimentary newsletter and to learn more about how his boot camps, coaching, books and other referral tools can help you acquire more and better clients through referrals, go to www.ReferralCoach.com (301-497-2200)

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June 15, 2009

Boost Your Sales series: “Laying the Foundation for Referrals,” by Ian Brodie

Filed under: marketing,Personal Marketing,prospecting,Referral Selling,sales,selling,Word of Mouth Marketing — Paul McCord @ 6:28 am
Tags: , , , , , , ,

It’s Referrals and Word of Mouth week at the Boost Your Sales blog series. 

We start off with Ian Brodie’s advice on how to prepare your clients to give quality referrals

Tuesday it’s Bill Cates with “Make Sure You Get One Great Referral”

Wednesday Joanne Black is here with “There’s No Such Thing as a Warm Sales Call”

Thursday Dr. Martin Russell discusses “Marketing Is What You Do When Your Product Is No Good”

and finally, on Friday I up with “Your Connections are Your Key to Your Success”

 

Stay tuned in next week as a great list of experts—Jeb Blount, Nigel Edelshain, Cindy King and Ardath Albee give great guidance on “Prospecting and Social Media”

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Laying the Foundations for Referrals
by Ian Brodie

A lot of what’s been written on Referrals over the years has been on the practical strategies and methods for getting them. And there’s no better source for the best thinking on these topics than Paul’s book: Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals (Wiley: 2007).

But I want to take a slightly different slant in this post. Assuming you know how to prepare and ask your clients and business partners for referrals in an effective way – how can you increase your chances of a strong referral occuring?

I’m going to cover three topics: 1) What motivates people to give referrals in the first place? 2) How you can help your referrers get better at giving referrals and 3) How to attract referrals without having to ask for them.

Motivating Referrers
What motivates someone to actually give a referral? What’s in it for them?

In my experience across multiple professions, I’ve found that clients and business partners are actually very generous when it comes to giving referrals. Their main concern is less one of self interest, and more one of helping their own clients, colleagues and friends.

But what they are concerned about is risk. They will want to be absolutely sure you will do a good job before they refer you to people whose relationship they value. They simply can’t afford to take the risk of you doing a bad job and their reputation and relationship suffering.

Your current and recent clients should have the confidence in you to know this won’t happen. But for business partners (and also perhaps for ex-clients from a while back) you will need to invest time to make sure they are fully confident in your capabilities and your intent to do a great job for whoever they refer you to. And you must be able to demonstrate this – not just claim it. Far better to invite a referral partner to a seminar you are running where you showcase your expertise than to simply tell them you have it.

The other risk for business partners is that you may attempt to “steal” the relationship from them (perhaps unintentionally in some cases). It’s advisable to set out clearly how you would proceed should they refer you – and emphasize that you would ensure they retained the primary relationship.

After these risks have been dealt with, you can increase the urgency and dedication with which your referral partners go about referring you. The prospect of reciprocation (if genuine) can obviously help. But sometimes referral relationships are by nature one-sided.  Accountants, in particular, are often able to give more referrals to lawyers than they get – simply by nature of the number of long-term business relationships they have. So making sure you are “going the extra mile” and visibly doing whatever you can to get high quality referrals back to them helps. In addition, you may be able to help them in other ways: introducing them to wider circles of contacts, giving them specialist advice on their own affairs, allowing them to showcase their expertise as guest presenters at your events.

Helping Your Referrers Get Better at Giving Referrals
In some cases your contacts would like to give referrals to you – but are simply not good at spotting referral situations and making the initial contact. Sometimes they just need a little help.

This is particularly important when the need for your services is not immediately apparent from outside. Companies contemplating layoffs and in need of employment advice don’t often advertise the fact in advance, for example. A close confidante may be privy to discussions that would alert them to these sorts of needs – but often most people don’t see the signs until it’s too late to act.

One method to help referrers identify situations where your services would be of value is to educate them about the externally visible “trigger events” which cause a need for your services. An obvious example would be the hiring of a new general counsel – often presaging a change in retained law firm. News of a potential new product may break well in advance of hiring a marketing consultant to help with the launch.

By thinking through (preferably with the aid of some of your clients themselves) the events that triggered the need for your services you can compile a simple list of “things to look for” which can help you and your referrers steal a march on your competitors.

In other situations, it may be that the referrer can spot the need – but struggles to find the words to discuss it with the potential client. In the case of divorce law for example, it may be very clear to your referral partner that someone needs professional advice – but they may be too embarrassed or uncomfortable to broach the subject with the person they are trying to help.

In this case, you need to help them by firstly educating them about the right time to intervene in the person’s best interest – and giving them some examples of words they can use to gently introduce the subject without the risk of damaging their relationship.

Becoming a “Referral Magnet” – How to Attract Referrals Without needing to Ask for Them.
Most of our discussion so far has focused on how to get more and better “outbound referrals”. In other words, referrals where the referrer reaches out to the prospect to recommend you.

However, the same lessons apply to “inbound referrals” – where the prospect themselves contact your referrer and ask for a recommendation. These types of referral can be incredibly valuable – as they are to highly qualified prospects – ones who are essentially saying “I have a need and I need help now”. Being able to attract these sorts of referrals will pay huge dividends.

The challenge here is that since needs for many products and services arise fairly infrequently, by the time your referrer is contacted by the prospect you won’t necessarily be “front of mind”. So they may not give you a particularly strong referral. After all, how many other lawyers does that accountant you count as a partner know and refer to? How many other printers does that consultant you met at the chamber of commerce pass referrals to already? Usually quite a few.

In order to get these referrals – often the most valuable ones – you must be front of mind with your referral partners when they receive the call.

Now, if they are a current or recent client you have done great work for then the chances are that you will be the only one referred. Or if you are part of a “leads group” then members of that group will automatically refer to you. But these situations are in the minority for most referral situations for most people. In order to maximize the number of referrals you get, you need a wide network of high potential referral partners, and you must be front of mind with them despite them not being recent clients or part of a “club” with you.

How do you do this? In the same way you stay front of mind with high potential clients. You invest in and nurture the relationship. You may not be able to work with them daily or meet them every week – but you can keep in touch and you can add value to them with every interaction.

It’s exactly the approach you would take with a high potential client: you would log them on your contact management system. You would invest in the relationship to secure future business. You would schedule regular events with them, send them clippings or news items of interest, proactively offer advice and guidance for free. Doing the same thing with high potential referral partners can have just as high a payoff. If they are regularly being contacted to give recommendations in your field then you must make sure you have a plan to stay front of mind with them.

You can’t do this with all your potential referrers – but you should be able to identify who are the ones with the most potential to refer business to you and to focus on them.

At minimum, you should be reviewing the list of your top referral sources weekly and your next tier monthly, in order to keep them front of mind for you and ensure that during the week you are awake to possible ideas and resources that might help them. Connect with them on Linkedin and monitor their status updates. Track them and their company via Google Alerts or other tracking methods.  Make sure you keep in touch and maintain your relationship by phone and face to face, not just by email.

Above all, if you are genuinely interested and concerned for them as human beings, then the right sort of nurturing behavior will follow.

Ian Brodie works with professional service firms – consultants, lawyers, accountants, surveyors, architects and coaches – to help them attract more clients and win more new business.  Ian has just launched the Rainmaker Network which is a worldwide free to join network focused on helping partners, marketers and business developers in Professional Service Firms to attract new clients and win new business.

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Do You Like the Sales and Sales Management Blog?

Then you’ll love my POWER SELLING newsletter.  Twice each month you’ll get my newsletter that focuses on real solutions to real sales and sales leadership issues with ACTIONABLE guidance, not grand but worthless theory.

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May 22, 2009

The Four Pillars of a Successful Referal, Part 3: Your Client’s Relationship to the Referred Prospect

Filed under: business,Handling Prospect,marketing,Personal Marketing,prospecting,Referral Selling,sales,selling — Paul McCord @ 7:27 am
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Most salespeople and business owners assume that all referrals are equal.  Even a great many trainers act like they’re all equal.  They’re not.  The strength of a referral depends more on the relationship between the client and the person they refer than on any other factor. 

Clients don’t just refer you to people who know them, respect them, and trust them.  It would be great if that were the case, but it isn’t.  Clients will refer you to people who are just casual acquaintances—and even to people who don’t respect them or don’t trust their judgment.

You can successfully convert any of these relationships into a great client.  But in order to so,

you must know EXACTLY

what the relationship between

your client and the referred prospect is.

When you get a referral you’re hoping to be able to set an appointment with the referred prospect based on the recommendation and endorsement of your client.  That’s the theory.  The reality is often very, very different.  Unless you know what the relationship between your client and the person they referred you to is, you don’t where you’re starting your connection with the referred prospect.

Prospects will initially judge you based on what they think of the person who referred you.  That means that your referral won’t necessarily have a positive impact on the prospect.  In some cases the prospect will have no pre-conceived opinion about you, while in other cases their pre-conceived opinion will be decidedly negative.

If your referred prospect trusts and respects your client, some of that trust and respect will automatically be imbued to you because someone they trust and respect endorsed you.  Consequently, you begin your relationship with that person from a position of strength.

If your referred prospect is simply a casual acquaintance of your client, they may have not developed an opinion about your client—good or bad.  In that situation you begin your relationship from a neutral position.  Although relatively rare, these neutral relationships do exist, and you will encounter these types of referrals.

Likewise, if your referred prospect distrusts or does not respect your client, in particular your client’s judgment and opinion, you begin your relationship with that prospect with some of that distrust and doubt imbued to you.  You begin the relationship from a decidedly negative position.

Your referred prospect will view YOU

the same way they view your Client–

Good, Bad, or Indifferent 

If you are not aware of the relationship between your client and the prospect—and in particular how the prospect views your client–you run a very real risk of blowing your opportunity to connect with the prospect. 

If your prospect trusts and respects your client, you will want to emphasize your relationship with the client and bring their name up often to reinforce the good feelings the prospect has regarding your client. 

On the other hand, if the prospect distrusts your client or doesn’t respect their judgment, simply use your client’s name for the introduction, and then seek to build your relationship with the prospect based on who you are, not on your relationship with your client.  Your client’s name gave you the opportunity to speak to the prospect; the rest is up to you.  Be aware, however, that the prospect will have reservations about you based on their opinion of who referred you.  It’s an uphill climb with a significantly lower potential for success, but one that can be made successfully if you’re aware of the obstacles in your path prior to making contact.

In those few instances where the prospect has virtually no opinion of your client, your client’s name should open the door.  Certainly you can continue to mention your client—they are neither an asset nor liability, but again, you’re faced with the task of building trust and respect based completely on your own, without any help from your client.

Next, the fourth pillar of a successful referral—How You Contact the Referred Prospect

May 20, 2009

The Four Pillars of a Successful Referral, Part 2: Your Client’s Purchasing Experience

Filed under: Client Relationships,marketing,Personal Marketing,prospecting,Referral Selling,sales,selling — Paul McCord @ 7:49 am
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Of equal importance to your relationship with your client is your client’s purchasing experience. Just because your client trusts you doesn’t mean he or she had the purchasing experience they wanted. On the other hand, just because your client had a good purchasing experience doesn’t necessarily mean they trust you.

To get the QUANTITY and QUALITY of referrals you want,

your client must trust you

AND

they must have the purchasing experience THEY want,

not the one YOU want to give them

Although we prefer to treat all of our clients the same, each is an individual. Each has their own idea of what they want to happen during the course of the sale. Certainly it is easier on us to treat them all the same, doing the same things the same way for each client; but that’s simply trying to make it easy on us rather than trying to give each client the experience they want. To generate a large number of high quality referrals, we have to change our perspective and rather than trying to make the purchase as easy as possible for ourselves, we have to concentrate on delivering the exact purchasing experience each individual client wants.

That’s a tall order. It means getting out of our comfort zone. It means taking on more work for ourselves. It means really getting to know our client’s wants and expectations rather than assuming we know what they are.

You earn referrals by

giving each client what they want,

not what you think they should want

To do this you have to talk to your client. You have to ask them to clarify exactly what they want to happen during the course of the sale. That is, you have to find out what their expectations are because meeting those expectations is how you earn their referrals.

This idea of asking clients to define their own purchasing experience is not only a foreign concept for many salespeople and business owners, it’s a foreign concept for most clients. More than likely, you’ll be asking a question that they have never been asked before. That alone begins to set their purchasing experience with you apart from any other they’ve had.

But more important than beginning to differentiate yourself from any other salesperson they’ve dealt with, by specifically asking them to design their own purchasing experience you:

1. Establish objective criteria for them to decide if you’ve earned the referrals

2. You have the opportunity to address any unrealistic expectations they may have right up front to insure those unrealistic expectations don’t become issues later

But how do you deal with existing clients that you didn’t have an opportunity to go through this process with during the sale? Naturally you can’t go back and recreate the purchase; but you can make sure that they are happy and satisfied with your performance and their decisions. If they are, you have a relationship that can be leveraged to help build your business.

If, however, you discover they have issues with either you or your product/service, you have some work to do before you can expect to successfully leverage the relationship. Rather than seeking referrals or an additional sale, your job is to mend fences, to put your relationship and the purchase back in order. You must correct your client’s issues before trying to leverage your relationship by:

• Discovering what the client’s issues are

• Asking point blank how you can make it right

• Either doing exactly what the client wants or if that isn’t possible, finding a resolution satisfactory to the client

• Implementing the resolution making sure that you know what your client expects to happen and that you do exactly that

Once you are completely satisfied that you’ve built the trust with your client and their purchasing experience meets their expectations, the third pillar comes into play–Your Client’s Relationship With The Referred Prospect

May 18, 2009

The Four Pillars of a Successful Referral, Part 1: Your Relationship to Your Client

Filed under: Client Relationships,marketing,Personal Marketing,prospecting,Referral Selling,sales,selling — Paul McCord @ 5:47 am
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What’s so tough about getting a referral from a client? Once you’ve met your customer’s needs, all you have to do is ask them if they know of anyone who might be able to use your products or services. You then go back to your office and call the person you were referred to and set up a meeting. Couldn’t be easier, right?

That’s the core of traditional referral training.

Almost every seller knows it just doesn’t work very well. In fact, it works so poorly that vast numbers of have just quit trying to generate referrals.

The problem isn’t with the concept of generating referrals. The problem is that most trainers have simply accepted the traditional referral ‘training’ and simply regurgitate the pap they were taught about referrals.

For the 47 million-dollar-a-year-income sales superstars who generate the majority of their business from referrals, referral generation isn’t a weak question at the end of the sales process, but is rather a disciplined process that begins from the moment they meet a new prospect and continues throughout the relationship with their client.

Generating a large number of high quality referrals requires that we recognize the foundational aspects on which a quality referral is based and how we might be able to control these aspects. Over the next four posts we’ll take a close look at the four basic foundational pillars of generating a quality referral.

Pillar 1: Your Relationship to Your Client

Conventional wisdom from sales trainers is that clients “love to give referrals; they want to help; all you have to do is ask.”

What bull! Although there is a small contingent of clients
who love to give referrals, most clients HATE to give referrals.

Clients believe that whomever they refer you to will be more demanding and more critical than they have been and they fear they will be embarrassed because the prospect they refer you to will have a bad purchasing experience and will be unhappy with your performance or your product or service.

Clients will only give referrals–that is, real, quality referrals–once you have established a relationship with them that:

• Demonstrates you are honest and trustworthy

• Demonstrates you will do what you say you will do

• Gives them reason to BELIEVE that you will live up to the expectations and demands of those they refer you to

Your relationship with your client must be one built on their EXPERIENCE of your trustworthiness and honesty.

Not your claims.

Not your promises.

Not your intentions.

Referrals are EARNED, not given.

To overcome your client’s natural resistance to give referrals, they must KNOW you will not only not embarrass them in front of the people the refer you to, but that you will HONOR them by giving their friends, colleagues, and associates SUPERIOR service that is based in HONESTY and INTEGRITY.

Honesty extends to how you generate referrals. Many clients don’t appreciate being cornered at the end of the sale with an unexpected and uncomfortable request for referrals. Not only does that last second request annoy the client, even for those few clients who want to give referrals it makes it difficult for them to give a quality referral since it doesn’t give them time to think about whom to refer, not to mention it doesn’t define for them who a quality referral is. Letting your client know early in the relationship that your business is referral based and that once the sales process has been completed you’ll be working with the client to acquire high quality referrals.

Every salesperson promises honesty. All claim superior service. Most intend to be trustworthy. Every client has heard the promises and the claims. They may even believe the intent is there. But they have had few relationships with salespeople where the promises, claims and intent have come to fruition.

You only get quality referrals when your client trusts you with them and that trust is earned by your deeds, not your words. If you don’t back up what you say, don’t be surprised when your client is uncomfortable giving referrals. The good news is this pillar isn’t dictated by chance since you have total control over your honesty, truthfulness, and actions, almost guarantying your client’s trust.

Next Post: Part 2: Your Client’s Purchasing Experience

March 23, 2009

Charity Can Be Great Business

Filed under: business,Networking,prospecting,sales,selling — Paul McCord @ 10:32 am
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On any given workday you can find tens of thousands of professionals, salespeople and business owners across the country working networking events.  These events, whether sponsored by a chamber of commerce, an industry association, or a networking group, attract a large number of men and women all looking for the same thing-a prospect.  In fact, at a great many of these events the vast majority of attendees are not really interested in meeting and mingling with other business people, but are only interested in finding a real, live prospect and if there are no prospects, they deem their time spent at the event to have been wasted. 

In time, most salespeople, professionals and business owners become convinced that networking as they’ve come to know it is nothing more than a huge waste of time.  For most, unless they are selling a relatively inexpensive consumer or business commodity, they’re right.

This doesn’t mean that networking is a waste of time.  Networking can, in fact, be one of the most productive and satisfying prospecting and marketing methods one can engage in.  Whether you’re a professional, business owner, or salesperson, there are a number of viable networking venues open to you, but non-profit charitable organizations are ignored as prospecting venues by most. 

Non-profit charitable organizations offer a tremendous opportunity to acquire new business while at the same time contributing to your community.  What better way to generate new business than to do so while volunteering your time, energy, and possibly money to help others?

Why are non-profits so valuable as prospecting venues?

  • You can often identify a charity whose board and committees have a large number of real prospects for your goods and services.
  • Instead of meeting these prospects in a sales situation where they will probably have their guard up, you meet them in a much more relaxed atmosphere where you can get to know one another as friends prior to approaching them regarding business.
  • You have the opportunity to demonstrate your competence, trustworthiness, and honesty prior to engaging the prospect in a business conversation.

However, networking through a charitable organization isn’t as simple as just picking one out and joining it. 

If you want to network through a charitable organization you’ll need to:

  • Find an organization whose purpose and goals are of sincere interest to you. In order to effectively network through an organization you’ll have to become an active member, participating in the success of the organization by becoming involved in a committee, attending all of the function, and working for the overall success of the organization. If you simply join hoping to show up when you think there might be a networking opportunity, you’ll quickly discover that you won’t succeed. Many members of these organizations are leery of those who join for no other reason than to meet business connections. They can smell you coming-and they’ll reject you. If you want to be successful, you have to be a real part of the group and not a leech.
  • Be patient. Building relationships takes time. Demonstrating who you are and why taking you seriously takes time. If you looking for quick, easy business, working within a charitable organization isn’t for you.
  • Commit yourself to the organization’s goals and objectives first, business second. If you’re not committed to the organization’s goals and objectives, your lack of commitment will eventually come through–and you very possibly may do your business more harm than good.

If you’re looking to establish some new business connections and find some great new prospects, consider investing your time and energy in a charitable organization.  You’ll find it far more satisfying and productive than the typical networking venues most salespeople and professionals work.

November 28, 2008

Should You Allow Your Sales Reps to do “Personal Branding”?

Filed under: branding,business,Personal Marketing,sales,Sales Management,selling,small business — Paul McCord @ 6:56 am
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I’ve had several sales managers asking about what limitations they should put on their salespeople who are trying to do “personal branding.”

For many industries, personal branding isn’t new. For instance, for years this has been a common factor in the real estate industry. Realtors have always tried to brand themselves as much or more than the company they work for. Other industries have had something of a similar history, though maybe not to the extent as the real estate industry. Mortgage loan officers, bankers, insurance agents and financial services reps have always tried to establish a personal following. These personal followings would, the salesperson hoped, follow them as they moved from company to company

However, in the last few years this idea that the salesperson should be selling themselves and their identification first and the company secondarily (if at all) has begun to enter into a number of industries. Now companies from dozens of industries must make a decision as to just how far they go in allowing their salespeople to overshadow the company in name recognition.

There are three things a company must take into consideration when trying to determine how free a salesperson should be to feature themselves in marketing vs. the company:

Who’s paying? He who pays should determine who gets top billing. This is just common sense (with some limitations below). If I’m going to pay for the ad, the flier, the brochure, or whatever, I should certainly have the option of advancing my name recognition more than the company’s. I certainly must take into consideration my current name recognition vs. my company’s. If I’m a new salesperson with little name identity and I work for a major company whose name is a household name, I might want to feature my company’s name just as much as I do my own. But, at the same time, I ultimately want to spend my money advancing myself more than the company.

If the company is paying for the marketing, then the same logic applies. The company should be advancing their name over the salespersons. In both instances, both the company and the salesperson should have their identities displayed. The question isn’t which to display, but which is emphasized.

Is it legal? If there are regulatory reasons for limiting the “personal branding” then, of course, the question is moot, but the company certainly has no business asking the salesperson to pay for or participate in the cost of the marketing.

What is being sold? If the experience and qualifications of the salesperson are of primary significance in the sale of the product or service, it is to the company’s advantage that the salesperson focus on their name and their experience. Even if the company is a household name. Joining a household name with a salesperson with exceptional credentials will only enhance the company’s sales.

If the product or service is dominated not by the salesperson’s experience and skills, but by the product or service, then it is probably to the salesperson’s advantage for the company and the product to be the primary focus of the piece.

So, the brief answer: based on a combination of who’s paying for the marketing piece, the regulatory situation and whether the salesperson’s experience and skills are the primary sales issue should determine just how much freedom a salesperson should have in “personal branding.”

Companies cannot keep their salespeople from leaving. The fact is that those salespeople most likely to want to brand are those who will have the most direct influence on the quality of a customer’s experience. To a large extent, it is the quality of the Realtor, not their company, that has the most impact on a customer’s experience; it is the quality of the broker, not the company, that will have the most influence on a customer’s satisfaction; and it is the quality of the agent that will have the most influence on a client’s purchase, not the insurance company he works for.

Let your people personal brand all they want-then work to keep them happy and in place as their sales grown.

November 22, 2008

The Four Pillars of a Successful Referral

Filed under: Client Relationships,marketing,Personal Marketing,Referral Selling,sales,selling,small business — Paul McCord @ 6:27 am
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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.  That is what my PWWR (pronounced Power) Referral Generation System does.

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.

October 24, 2008

Why Clients Resist Giving Quality Referrals

Filed under: marketing,prospecting,Referral Selling,sales,selling,small business — Paul McCord @ 8:43 am
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Virtually every advisor has been taught that generating referrals from clients and prospects are the way to success, but less than 15% of all advisors generate enough referrals to significantly impact their business.  Most of the time, the problems advisors have generating referrals is due to the training-or lack thereof–they have received, rather than with the their performance.  The traditional referral selling training has been to “do a good job and ask for referrals.”  Yet, it has been obvious for decades that it really does not work very well.  Using the traditional approach, the typical advisor will get an occasional name and phone number or two from their clients, but seldom do these names and phone numbers result in a sale.  Certainly, on occasion, these referrals become clients, but the close ratio tends to be quite poor.

The failure to generate a large number of high quality referrals actually lies in the traditional method’s approach to the client.  The traditional “do a good job and ask for referrals” approach creates several roadblocks to getting referrals.

First, by waiting until the sale is complete and then asking for referrals, your client has not had the opportunity to prepare for your request.  To the client, the request comes from out of the blue.  When you approach your client with your request without giving them an opportunity to think about it, you have put them on the spot.  You are only giving them a few seconds to go through their mental file cabinet.  More than likely in this situation, they will not be able to immediately produce the number or the quality of referrals you want.

Second, even if your client takes a few seconds to think about it, they really do not know what you want.  It may seem obvious to you, but your client really has not a clue what a good referral for you is.  This may seem a little difficult to accept, but it is true.  You assume that because you sell a whole array of financial products and services, your customer is immediately going to think, “Who do I know who needs or uses any type of financial advice, guidance or products?”  Wrong assumption.  What they actually think is “what does this person want from me?”  Or, more likely, “how can I get out of answering this?”  Without having defined for your client exactly what a quality referral for you is, you stand a very little chance of getting quality referrals.

Third, the traditional method of “do a good job and ask for referrals” does not give your client a reason to give you referrals.  We make the assumption that if we have done a good job, the client will like and respect us and be willing to give us referrals.  Again, this is far from the case.  Most clients will not give good, quality referrals just because they like you or because you have done a good job for them.  You must give them a reason to give you referrals.  They need to understand why it is in their best interest to give you referrals-and after the sale is complete, it is too late to try to explain how giving you referrals benefits them.  Clients assume that whomever they refer you to will be more demanding and critical they have been.  When a client gives a referral, they are putting their reputation and image on the line with the person to whom they are referring you.  They are concerned about what their friend or acquaintance is going to think of them, particularly if you mess up.  Consequently, you must give them a good reason why they should go out on the limb for you.

Fourth, the traditional referral generation method does not give the client an objective standard by which to measure the quality of your performance.  You and your client may “feel” you have done a good job, but when you ask for referrals, they begin to think back over the sales process more critically and question whether you have really performed up to standard.  If the two of you agree up-front on exactly what you need to do in order to “do a good job,” they will have an objective basis to decide if they trust you enough and if you have earned the right to be sent to the people they really know and respect.

And finally, although not a direct result of the traditional referral generation method, an equally serious issue is studies show that the majority of the times advisors do not really ask for referrals-rather they suggest referrals.  Instead of asking a direct question seeking referrals such as “John, which of your friends, family members or acquaintances do you know that I may be able help solve some crucial issues?” the typical advisor will make a weak request such as “John, if you happen to know someone I can help would you mind letting me know?”  Or, “John, if you run across someone who could use my services would mind giving them my card?”  Rather than a request for referrals, these are throwaway sentences, quickly forgotten by most clients.

Traditional referral training is inherently unfair to you, the advisor, and your client.  It does not give the you the tools needed to successfully work with your client to generate quality referrals, and it does not give your client a reason give referrals, nor a chance to become comfortable giving you referrals.

Yet, it is possible to generate a very large number of high quality referrals from your clients.  You need to make sure that your interaction with your client eliminates these shortcomings.  Preparing your client during the sales process to give referrals by informing them up-front that you are a referral-based advisor and expect referrals after the sale; defining for your client exactly what a quality referral for you is; educating your client on why it is in their best interest to give you referrals; and then coming to an agreement with your client on exactly what you must do during the course of the sale to earn their referrals will quickly give you a large pipeline of quality referrals. 

By recognizing and resolving the problems of the traditional referral generation method, you can turn these issues into your strengths, generating a large number of high quality referrals from almost every one of your clients and prospects.

October 17, 2008

Turn Your Client Database into Gold

Filed under: business,lead generation,marketing,Personal Marketing,prospecting,Referral Selling,sales,selling,small business — Paul McCord @ 4:14 am
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Right this minute, you are probably sitting on tens of thousands, maybe hundreds of thousands of dollars worth of commissions. Most registered reps have a database of current and past clients whose potential referrals are worth several thousand additional commission dollars per month.  Yet, this resource goes virtually untapped for most advisors.

Why?  Simply because most reps have not learned how to successfully convert their client relationships into referral relationships. Acquiring referrals from clients is not as simple as “doing a good job” and then asking for referrals. Generating a large number of highly qualified referrals from a client is a process that starts from the moment the prospect is first met, not a one-time act after the sale has been completed.  It requires an understanding of what a successful referral is based on, and how to exploit the referral to insure a successful contact with the referee.

Every referral involves the interaction of three people and four relationships among those three individuals.  The strength or weakness of each of these interactions will influence the success or failure of the referral for the advisor:

  1. The Advisor/Client relationship:  In order for the client to be willing to give a quality referral, there must have been built a strong bond of trust between the rep and the client.  A client may give a “referral” to someone they do not trust, but they will not give a referral to someone they know well and respect if they do not trust the salesperson.  If there is only a weak bond of trust between the advisor and client, the “referral” the client is likely to give will be to someone the client either believes will not meet with the advisor or someone the client does not know well or respect.
  2. The client’s purchasing experience: Clients will not give high quality referrals if their purchasing experience did not meet or exceed both their expectations and their priorities.  All clients enter purchasing relationships with certain expectations and priorities.  Expectations and priorities are not the same.  A client may expect to be kept fully informed during the course of the sale and may have certain product or service functionality requirements as his top priority.  In order to receive a large number of high quality referrals, the rep must make sure that they meet or exceed both the client’s expectations and priorities.  Despite the current parroting of the buzz phrase, “exceeding the customer’s expectations,” meeting and exceeding client expectations is seldom accomplished.  Few people take the time and effort to discuss with their client what the client’s expectations and priorities are-rather most reps, and companies, assume they know.  At best, all they can knowingly accomplish is meeting or exceeding their expectations of what they think their client should expect.
  3. The Client/Prospect relationship: The trust and respect relationship between client and referee are of great importance.  The stronger the bond of trust and respect between the client and the prospect, the easier it will be for the advisor to set an appointment with and then sell the prospect.  In referral selling, a great deal of the rep’s credibility, or lack thereof, is built on the trust and respect the prospect has for the client who made the referral.  If the client/prospect bond is strong enough, the rep is virtually guaranteed a sale.  On the other hand, if the bond is particularly weak, the referral is little better than a cold call.  Consequently, it is of utmost importance for the advisor to know as much as possible about the client’s relationship, and likely bond of trust, with the prospect.
  4. The advisor’s initial contact with the referee: based on the client/prospect bond, the advisor must determine how best to contact the prospect to produce the greatest opportunity to acquire a meeting.   The weaker the relationship between the client and the prospect, the stronger the contact method the rep should seek to employ.  If the client/prospect relationship is extremely strong, virtually any contact method, including a phone call from the salesperson mentioning the client’s name will suffice, but for a weak relationship, the rep must strive to use the strongest contact method possible.  In descending order, from weakest to strongest, possible methods of contact include a phone call to the prospect from the advisor, an email from the client, a client letter, a client phone call, a client/prospect/advisor lunch meeting.

Fortunately, the advisor can control most of the above interactions.  Only the client/prospect relationship is completely out of the rep’s hands.  Even then, the rep can compensate for a less than ideal client/prospect relationship through using a stronger initial contact method.

If you understand the foundation of a referral, you can quickly increase your referral-based business and begin to mine that gold mine in your client database.

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