Sales and Sales Management Blog

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

January 23, 2009

It’s Not Your Client’s Responsibility to do Your Job

Filed under: business,prospecting,Referral Selling,sales,selling,small business — Paul McCord @ 12:38 pm
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Most salespeople want referrals.  Almost all sales trainers preach the need to generate ‘em, usually by saying something like, “all of my clients give me four or five great referrals to their friends and family, while I’m filling out the paperwork, just write down the names and phone numbers of four or five people who might need my services,” or, “by the way, do you know of anyone else who might need my service?”

Most salespeople learn very quickly that these approaches don’t work well.  Sure, a salesperson might get an occasional name and phone number, but usually they aren’t much better than taking out the phonebook and pointing at names at random.

There are several reasons these approaches don’t really work such as not defining for the client what a good referral is, not giving the client time to get comfortable with the idea of giving referrals, and not giving the client a reason why they should give referrals.  In order to get a large number of high quality referrals, you must address and overcome each of these issues. 

But one of the major reasons clients don’t give lots of quality referrals is that they don’t know whom to refer.  They just don’t know enough about your business to give you really good referrals.  They really don’t know what you’re looking for-even after you define whom a quality referral is.  Besides, they have enough to think about, they don’t need to be doing your job for you.  It isn’t their responsibility-it’s yours.

Does that mean you can’t get great referrals?

No, not at all.

It does mean, however, that you can’t rely on your client doing your job. 

So, how do you get referrals from clients without them having to do the work?  Simple.  You do some investigation to figure out whom your client knows that you know you want to be referred to. 

OK, it isn’t simple.  It takes work on your part-detective work.  But it’s your business, not theirs.  You have to take responsibility for building your business, not pass it off to your clients.

Being a referral detective means you have to listen to your client.  You have to ask the right questions.  You have to observe his or her surroundings.  You have to be alert to discover who you have reason to believe they know that you know would be a good prospect for you.

Most often you’ll uncover referral opportunities through casual conversations with your client and observing their office or home surroundings. 

A few examples:

  • If you’re speaking with the VP of Finance for XYZ Company, during your rapport building, casually asking them whom they worked for prior to joining XYZ will reveal a potential referral. 
  • If your client is purchasing a car, asking who’s next in their family to purchase a vehicle may reveal a referral
  • If your client has a plaque from the local chamber of commerce for his work as one of last year’s directors, whom in the chamber do you know you’d like to be referred to?
  • If your client is a purchasing agent for ABC Company, what companies do they purchase from that you’d like to be referred to? 

Instead of asking your client a general question that he or she may easily answer in the  negative, ask your client if they would refer you to the person or company you’ve uncovered from your detective work.  If you’ve done a great job and you’ve uncovered someone they know, they will refer you.

Then, take it one step further.  Instead of just getting a name and phone number, get a real referral-a direct introduction to the referred prospect.

Yes, this isn’t as easy as asking the typical ‘referral’ question; but are you looking to build your business or just slide through doing as little as possible? If you’re serious about building your business, take responsibility for its success and do the work for your client.  You’ll get a lot more referrals-and a lot better referrals-for your effort.

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.

September 7, 2008

Great Tips and a Free Audio Copy of My Referral Selling Book

Filed under: Book Recommendations,business,lead generation,marketing,prospecting,Referral Selling,sales,Sales Resources,selling — Paul McCord @ 6:08 pm
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Would you like a free unabridged audio copy of my bestselling book Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals? Well, you can have one courtesy of Jeb Blount, The Sales Guy. That’s every second of the 4 hours and 18 minutes of the book-and not only do you not pay the Audible cost of $17.95, you don’t pay a penny.

Jeb’s podcast series, The Sales Guy’s Quick and Dirty Tips, has arranged for you get a free download of my book in audio form from Audiable.com. Already have the book in hardback or audio form? Would you rather have another book? No problem. You can choose my book or a book by Nido Qubein, Tom Hopkins, Brain Tracey, Steven R. Covey, Harry Beckwith, Zig Zigler, Malcolm Gladwell, Jeffrey Giotmer, Seth Godin, or other top authors.

The best part is you also get great sales tips from Jeb. Hop on over to iTunes, Quick and Dirty Tips, or Sales Gravy, listen to Jeb give you some tips to help you sell and then listen to me tell you how to turn your business into a referral-based business, increase your income substantially, get off the ineffective, discouraging, and never-ending cold calling treadmill, and enjoy your job a whole lot more.

I want to thank Jeb for featuring my book on this offer-and encourage you, whether you get my book, another book, or no book, to head over to Quick and Dirty Tips and improve you sales business.

August 16, 2008

Turning Worthless ‘Referrals’ into Real Clients

Filed under: marketing,Personal Marketing,prospecting,Referral Selling,sales,sales training,selling — Paul McCord @ 8:52 am
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Sales through referrals from clients make up less than 7% of the business for over 75% of all salespeople. Yet referrals are the basis of business for most of the top 5% mega-producers.

Why do so few get so much from referrals when the vast majority of salespeople get so little from the same marketing method?

It isn’t luck.

It isn’t that their clients know more people or are easier to get referrals from.

It isn’t magic.

The mega-producers who work their business from referrals have learned that:

  • Despite what many teach, clients don’t want to give referrals
  • Simply asking for referrals gets you nothing but maybe a name and phone number that is little better than picking a name and number at random out of the phone book
  • Getting lots of high quality referrals is a process, not a question at the end of the sale
  • If you want lots of great referrals you have to make giving great referrals easy for you client
  • A real referral isn’t just a name and phone number, it’s a direct introduction to the prospect
  • By using a disciplined process that addresses and overcomes all of the client’s anxiety and fears about referrals, they can generate 5, 10, 15 or more high quality referrals from each of their clients

If you want to get out of the rat race of cold calling and ‘networking,’ if you want to eliminate the expensive direct mail, the ineffective fliers and the other methods you’re using that aren’t getting you where you want to go, you have to learn to find and connect with high quality prospects the way the most successful salespeople do-through working with your clients to meet and connect with tons of high quality prospects.

You can learn the same process the most successful salespeople use and have the same success in generating the quantity and quality of referrals that will take your business to a referral-based business. The PWWR Referral Generation SystemTM was developed by Paul McCord by combining the best referral practices of 47 true million dollar a year income mega-producers. It is the only comprehensive referral generation process that works with clients to generate referrals in a way that clients are comfortable with and respond to by giving a large number of quality referrals.

Till September 1st, McCord Training is offering special referral training packages at tremendous discounts. You can learn the process and with some packages even have Paul give you direct one-on-one referral coaching.

With these learning materials you learn:

  • Why just asking for referrals doesn’t work
  • Why clients hate being asked for referrals
  • How to create the relationship with the client that will make them want to give referrals
  • How to make giving referrals so easy for the client that they’ll give you 10, 15, 20 or more quality referrals
  • Why just getting a name and phone number is useless
  • How to turn ‘referrals’ into direct, powerful, appointment setting introductions
  • How to turn your business into a referral-based business

No gimmicks, no get rich quick schemes, no tricks. The PWWR Referral Generation System is a PROCESS, not a trick. It is a comprehensive program that makes clients at ease with referrals, gives them an objective basis to determine if you’ve earned the referrals, and makes it easy for them to give you a large number of quality referrals.

These special training packages include Paul’s best-selling book on referrals that is becoming recognized as the authoritative work on referral generation, Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals, the companion workbook, 4 hours of CD training on referrals, and some include personal one-on-one referral coaching.

These packages allow you to save anywhere from $50.00 to over $1,340.00 from the standard retail price of the products if sold separately.

Don’t wait as the sale ends September 1st and these types of discounts-almost 50% off retail won’t be offered again until next August-if then.

See and purchase the packages HERE

August 5, 2008

New Referral Book Coming Spring of 2009 from Sales Gravy Press

Filed under: business,prospecting,Referral Selling,sales,Sales Resources,sales training,selling,small business,success — Paul McCord @ 7:31 am
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Sales Gravy Press Signs Best-Selling Author Paul McCord

Author and internationally recognized sales trainer Paul McCord has signed with Sales Gravy Press to publish his newest book, a follow-up work to his best-selling book on referrals, Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals (Wiley 2006).

Cape Coral, FL (PRWEB) July 31, 2008 — Author and internationally recognized sales trainer Paul McCord has signed with Sales Gravy Press to publish his newest book, a follow-up work to his best-selling book on referrals, “Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals” (Wiley 2006). The new book leads the reader through specific application strategies of the groundbreaking referral generation process laid out in Creating a Million Dollar a Year Sales Income.

“The initial book laid the groundwork for a disciplined, predictable, effective process for generating a large number of high quality referrals from each client,” McCord said, “and now I show salespeople how to apply those principles to specific situations. The first book demonstrated why the training they received hasn’t worked and walked them through a process that not only generates referrals, but generates a large number of high quality referrals. The new book goes even further and shows salespeople how to mine their database, turn cold calls into referred calls, and how to make giving referrals so easy they can generate 10, 15, 20 or more quality referrals from every one of their clients.”

With almost three decades under his belt as a salesperson, manager, business owner, and consultant, McCord’s experience and knowledge is both wide and deep. And like most of us, his life’s journey has taken some strange turns. “I thought I was going to be an academic, teaching Philosophy in a university,” he admits. “But as a doctoral student, it became clear that I didn’t have the personality for the academic life. I was more attracted to the real than the theoretical. I left the program and went into sales — and what’s more real than selling? Now, almost thirty years later, I’m back where I started–teaching, combining my love of working with and training salespeople and managers with the hard lessons I’ve learned over the years in the sales business.”

“Getting Paul on board is a huge win for Sales Gravy Press,” said Publisher, Jeb Blount. “Paul’s large following and proven success as an author are cornerstones in our mission to build a foundation of the brightest authors, speakers, thought leaders, and experts in the sales profession. We are just ecstatic that Paul has joined the Sales Gravy family.”

The new book will be released in the spring of 2009.

July 15, 2008

Referral Sources or Referral Partnerships?

Filed under: business,lead generation,marketing,Networking,prospecting,Referral Selling,sales,selling,small business — Paul McCord @ 7:44 am
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Is your pipeline anemic?

Are you finding yourself having to work harder to find and connect with quality prospects?

Is your call list getting short and you’re not sure where you’re going to find new names?

Whether you’re facing the above issues or not, aligning yourself with others who can expose you to new prospects, help set up the sale for you, and help make life more enjoyable is one of the most effective marketing methods you can employ.

Enlisting other salespeople or companies who sell to the same prospects as you to help you find and connect with quality prospects has been a staple of marketing for top producers for decades—and unsuccessfully imitated by countless others.

Why have top producers found working with other professionals for referrals to work so well while so many others have failed to capitalize on them?

I often hear salespeople and managers–and even some sales trainers–talk about seeking out ‘referral sources’ to help them find and connect with prospects.  These referral sources tend to be salespeople who are likely to deal with people or companies that would be great prospects for the salesperson and who might need or want their product or service.

These ‘referral sources’ discussions always interest me, so I’ll engage the salesperson in a conversation about their experience with them.  Typically my first question will be how much business they’ve closed through these referral sources.  A few will indicate they’ve done well with them, most indicate they’ve seen very little to no real business from their sources.

When I ask the salesperson I’m speaking with what the other salesperson gets out of making the referral, they mention that they are giving the referrer the assurance that they’ll take exceptional care of the salesperson’s client, allowing that salesperson to become more valuable to their client by becoming a trusted source of addition advice and services, or they’ll give the salesperson’s client a discount of some sort that only that salesperson’s clients get, or they’ll give the salesperson a $5 or $10 gift card to Starbucks or wherever for every successful referral–in other words, nothing of value to the referrer.

When I assert that the other person is getting nothing of value, I often get a scornful look and verbal resistance.  Some of the responses I’ve received are:

•    From a mortgage loan officer: “Their client has to have a loan and I’ll make sure their client is well taken care of and gets a great deal—and that the loan will close on time.  That’s real value to that Realtor and their client.”
•    From an insurance agent: “She doesn’t offer insurance, just securities.  Her clients need insurance and she can be assured that I won’t try to steal her clients or infringe on her business in any way and if she doesn’t help her client through me, her client is likely to see an agent that will try to steal her business.”
•    From a salesperson for an IT service company: “I often find additional needs the client has and when I do, if he (the person who referred him to the client) sells that product, I’ll send the business to him.  I’ll be a source for additional sales for him to his client.”
•    From a specialized printing salesperson: “My referral sources are also in the printing business.  Their clients will on occasion need some things done that they can’t do and that I can.  My appeal to them is that by referring the business to me, they are assured that I’ll talk up just how good they are and it keeps their client from going to another company that might be able to not only do what I do but might be able to replace them as well.”
•    From a pool builder sales rep: “I target residential remodelers who do a lot of extensive remodeling.   My company isn’t the cheapest but it is very competitively priced and if they refer their client, we’ll give their client a 10% discount.  We make them look good because their client not only gets a high quality company, but they save a lot of money too.”

In each of these cases (and these responses are the norm, not the exception), the reason given for the referral source to send them referrals is that they are doing the referral source a favor!  “I’ll talk them up,” or “I’ll close the loan on time,” or “I won’t try to steal her business,” or “I’ll make them look good.”  The worst part is these salespeople are serious when they make these statements.

Like I said, these referral sources get nothing out of the deal.  Why do they need these salespeople?  A promise of making them look good, or not trying to steal their business, or closing the loan on time is a dime a dozen.  Actually, they’re more like a penny a hundred.  There isn’t a mortgage loan officer, IT salesperson, pool builder, or printing salesperson alive that isn’t likely to make the same promise.  If you think you’re doing your referral source a favor and that is going to earn you their business, you’re in for a surprise.

The first rule in developing referral business from others is that they don’t need you.  They don’t need your promises, they don’t need you to make them look good, they don’t need you messin’ with their clients.

The second rule in developing referral business from others is they need business too.  They need referrals to quality prospects, just like you do.

The ‘secret’ the top producers have discovered when getting referrals from other salespeople and companies is to forget about ‘referral sources’ and develop referral partnerships—real partnerships where the referrals go in both directions, not jut one.

Salespeople and companies need the same thing you need—business.  If they need someone to make them look good or to help one of their clients, they have no problem finding dozens of salespeople willing to help.  What they need are reciprocal relationships where the people they refer clients to also refer prospects back to them.  They need partners, not moochers.  And if you’re not giving back in kind, that’s exactly what you are—a moocher.

Setting up Referral Partnerships

1.  Identify Your Potential Partners: Look for other salespeople or companies who deal with the same prospects as you.  Define your ideal prospect—you may have more than one ideal—and then look for others who target the same prospect.  You want to find salespeople who are already established in the market; who have the reach and reputation you wish for yourself; and whose quality of products and services match yours.

There is no need to waste time and energy on low producing salespeople as they won’t be able to feed you many prospects.  In addition, the quality and cost of your products and/or services should closely match your potential partner’s since you will be looking for the same prospect.  If your product is top of the line and expensive, don’t partner with a salesperson whose products are on the bargain end of the spectrum.  Likewise, if you are selling modestly priced products, don’t think you can partner with a premium priced company to enhance your image—their clients are more than likely not going to be interested in your company’s products.

2.  Know What You’re After: Once you’ve identified a number of potential partners, develop a plan of approach for each.  What are you looking for with each partner—joint marketing?  Maybe joint sales calls?  Simply referring clients back and forth?

Take a close look at the activities of each salesperson or company you’ve identified to get an idea of how they operate.  Do they do a lot of advertising?  Are they constantly running specials?  Are their sales materials high dollar—or maybe they don’t really use collateral material?  Are there gaps in their offerings that you can help fill?  Do they tend to sell mostly to existing customers or to new prospects?

How your proposed partner works will lead you to know what to propose to them.  If they do a great deal of advertising or direct mail, maybe a joint advertising campaign would be of interest to them.  If they work primarily with their existing client base, referring back and forth might be most appealing.  If they use a lot of high dollar collateral material, you better have material that is equally impressive.

3.  Set an Appointment with the Partner Prospect: Invite your partner prospect to lunch.  Your partnership discussion is important and shouldn’t be a viewed as a casual phone conversation.

Many of your potential partners will be men and women you either don’t know or have only met once or twice very casually.  Many will not know who you are.  Since the men and women you’ve identified as potential partners are the best in their industry in their local market, a very effective way to gain a lunch meeting is to acknowledge their success and superior reputation.  Just call them, introduce yourself, and then tell them that you know them via their reputation and the quality of their work and that you’d like to take them to lunch as you have found that it is always good practice to know top people in the business.  Most will accept—people like to be recognized for their work.  Seldom have I been turned down with this approach.  And best of all, it’s true.  I do want to know the best people in the business and they are among the best in the business in their area.

4.  Make Your Proposal: During your meeting, present your proposal.  Your proposal must focus on what the partnership will do for your potential partner, not what it will do for you.  Salespeople are people, meaning their natural interest is ‘what’s in it for me.’  If you approach the conversation from a self-centered point of view, your proposal is dead before you even begin.

If you’ve done your homework well, you should be able to relate exactly why your potential partner would be interested in working with you, what type of working relationship it would be, and what the potential results for them will be.

Since there is a very good chance your potential partner doesn’t know who you are—and possibly they know little or nothing about your company—you’ll have to be able to quickly create a relationship with them and to provide credibility for yourself and your company.  Hopefully you have mutual clients or testimonials from individuals or companies your potential partner will recognize and respect.

Don’t expect a commitment during your initial meeting.  Most often if the person is interested, they’ll need time to do some due diligence, as well as additional discussions to develop the model for the partnership.

5.  The Monkey is on Your Back: The partnership was your idea, not theirs.  That means you’ll have to do the work to get the partnership going.  Even if you gain agreement from your potential partner, they won’t be committed until they see results.  You’ll have to take the lead in getting the partnership moving—and most importantly, you’ll have to provide them with real leads, referrals, and potential business before you can expect them to begin feeding you leads and referrals.

If you’re just looking for free, easy business, don’t bother with a partnership because it won’t do you any good.  However, if you’re willing to invest the time and effort, focusing on creating partnerships with the top salespeople and companies in your area that work with your prime prospects can bring in business you would have had a very difficult if not impossible time reaching.

Partnerships are great door openers and business builders.  But they aren’t magical.  They take work.  They take time and effort.  And most of all, they require you to do what you say you’re going to do—be a source of new business for your partner, just as they are expected to be a source of new business for you.

July 9, 2008

Dave Stein’s Review of Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals

Filed under: Book Reviews,lead generation,marketing,prospecting,Referral Selling,sales,sales training,selling — Paul McCord @ 6:48 am
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Referral Selling: An Old Silver Bullet, Revitalized

By Dave Stein

If you visit the best sales blog sites, you’ll no doubt stumble upon Paul McCord. Paul has a lot to say about an old silver bullet-referral selling.

I call referral selling “old” only because the practice of leveraging existing customer relationships has been around for decades. In fact, not enough sales people build this potentially powerful lead generation strategy into their overall territory management approach. (There are reasons for that. Among them are unhappy, unreferenceable customers, fear and simply not knowing how to referral sell.)

I’ve been pretty tough on sales tips books and articles. With that in mind, referral selling skills (like presentation skills and typing skills) can be independent of any sales methodology.

Paul’s book, Creating a Million Dollar a Year Sales Income – Sales Success Through Client Referrals provides a comprehensive view of the subject. His intent is to guide the reader into deploying a referral-based business model. Although Paul’s background is in financial services, where referral selling is more widely used, his strategies and tactics can be applied across pretty much any industry.

Paul’s PWWR (pronounced “power”) system is the key. Plant the seeds, Water them throughout the sale, Weed out any issues, and Reap the referrals. This is Paul’s recommended process and it makes a lot of sense. Although I have not employed Paul’s PWWR process, I can envision it working very well in diverse situations. He’s done a terrific job.

Here is my recommendation for sales leaders. (A full-fledged plan will contain considerably more detail-this is just a starting point….)

  1. If your sales team hasn’t been effectively leveraging existing customers for referrals, determine why.
  2. Benchmark the level at which referrals business is being converted to sales.
  3. If the reason is that (you and) your salespeople don’t know how, invest in this book.
  4. Take the time to study Paul’s referral process and his recommendations.
  5. Set an objective. For example, referrals will be the source of 10% of our business next year.
  6. Devise a plan for adopting his process across your team.
  7. Build appropriate coursework, tools, coaching mechanisms. (This is a difficult proposition for a busy sales manager. You probably don’t have either the time or the skills. I’m sure Paul would be delighted to engage with you on this…)
  8. Train your team or get them trained.
  9. Deploy the process, measure results against your benchmark and objective and refine.

Dave Stein is an internationally recognized thought leader in the area of sales performance, sales effectiveness and especially sales training. He writes the Smart Sales column for Sales and Marketing Management magazine, is the author of How Winners Sell, and is Founder and CEO of ES Research Group, an independent firm offering independent, authoritative intelligence about sales training and the companies that provide it.

Read reviews of Creating a Million Dollar a Year Sales Income by ChangingMinds.org, AllBooks Reviews, Selling Power Magazine, Dave Lakhani, and Frank Rubauskas here.

May 26, 2008

Asking for Referrals–Don’t be Mislead by Misguided Trainers

Filed under: marketing,Personal Marketing,prospecting,Referral Selling,sales,selling,Word of Mouth Marketing — Paul McCord @ 8:46 am
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Take a look at some of the current literature and training on referrals and you’re bound to walk away confused and frustrated. One trainer tells you not to ask for referrals because it signals to your client that you’re weak and can’t find business on your own. Another tells you that referrals are your ‘right’ and your clients have no right to withhold them from you. Another says that when you ask for referrals you’re offending your client and that instead of asking clients for referrals, you should be exchanging referrals with other salespeople like trading cards. Another one tells you that in order to get referrals you must give the client a reward, the bigger, the better. Many others say the ‘secret’ to getting referrals is just to ask.

So, who’s right? Are referrals a sign of weakness? Are your relationships with your clients commodities to be traded on the open market? Are referrals your God given right? Do you really have to bribe a client to get referrals? Or is simply asking the magic formula?

Misguided Referral Training
In a sense they’re all right. If one doesn’t know how to initiate and develop a relationship with clients that result in the client willingly giving a large number of high quality referrals then maybe you are offending the client when you ask; maybe you do have to bribe them in order to get referrals; maybe your relationship is nothing but a commodity; maybe you do feel you have to go in with the attitude that it’s “my right and by gosh you’re going to give me referrals.”

According to one trainer, asking for referrals can kill your credibility by making you “just like every other salesperson.” Instead of asking for referrals, one should be different and professional, giving great service and waiting for your clients to spread the word for you. Talk about having no clue as to how to generate referrals.

First, this trainer has left the realm of referrals and has gone into the realm of word of mouth marketing—a not uncommon confusion of the two very different marketing formats. Secondly, no matter how great you are at providing superior service, how often have you gotten unsolicited referrals? The dozens and dozens of top producers I’ve worked with believe they can reasonably rely on maybe a half dozen unsolicited referrals a year. Now that puts a real dent in their production.

According to another training company, you should be asking for referrals virtually every time you speak with your prospects and clients–and you should be asking because referrals are your right. They advise you begin asking for referrals from your first meeting with the prospect and ask for them before you make any presentation. You have a right to ask for referrals and your prospect has no right to withhold them, so ask for them right up front, ask forcefully–and insist they give them. As with the advice above, they seem have no clue as to the psychology of referrals. They appear to believe that salespeople are God’s gift to consumers and therefore have extraordinary rights simply because they have a business card that says they’re a salesperson.

Referrals are NOT a right. Referrals are EARNED and you cannot earn a referral the second you meet a prospect. The client has the right to give or not give referrals; you have no right to expect them. Referrals are earned by doing exactly what you have promised your client, not by demanding them, not by expecting them, not by simply existing and standing in front of a prospect or client.

Many advocate using incentives to get referrals, but often the incentives they speak of aren’t really incentives but are instead bribes. The theory is that people ‘love to give referrals’ and that giving an incentive simply makes giving referrals that much easier and ‘fun.’ Some advocate gift cards of anywhere from $25 to $100 or more, others a percentage of the sales price, and others free merchandise and/or service, often the incentive is outlandish—and the bigger the incentive, the more referrals you’ll get and if you get enough referrals, the incentive will have been worth it.

The first problem with this advice is that people don’t ‘love giving referrals.’ Most clients hate giving referrals—unless they fully understand why they are giving the referral, why giving referrals are in their own best interest, and that the person they give the referral to has objectively earned the referral. Clients don’t give referrals because they like you, respect you, or even because you did a good job. They give referrals because giving referrals is in their best interest—and if you have to bribe them to give referrals, you haven’t earned them. And if you haven’t earned them, no matter the size of the bribe you give, you won’t get high quality referrals.

Secondly, clients may well question your professionalism and your ethics if you must result to bribing them for referrals. Clients make a number of assumptions about salespeople. One is that a successful salesperson doesn’t have to bribe people for business. If they believe that is what you are trying to do, you lose their respect and once you lose their respect, they won’t be referring you to the best prospects they know.

If you use an incentive, it must be small in price, highly personal in the sense that it is something just for them, and it must not appear in any way, shape, or form to be a bribe.

There are sites on the internet that try to turn referrals into trading commodities between salespeople. These of course aren’t referrals; they’re simply exchanging information between salespeople about who to contact within a company. These commodity trades can certainly be valuable, but they are a far cry from a referral. According to the blog on one company’s website, customers don’t have the proper ‘DNA’ to give referrals. A client’s only value is in being a reference, not in giving referrals.

As with the others, it simply demonstrates a lack of understanding of what a referral is and how to generate a quality referral. Again, I think the service these companies provide is valuable for the right salespeople, but confusing a referral with a name trade is a disservice to the salespeople engaging in their service. Salespeople can use both quite successfully. No matter how hard I try, I simply cannot get referred into every company that I would like to speak to. A service such as this can help me do that—but having a direct referral into the company is a far better alternative, if I can get it.

Finally, there are the hundreds of sales trainers giving the worn out advice to simply “do a good job and ask for referrals.” This is the way referral generation has been taught for decades simply because the trainers didn’t know a better way of referral generation. Unfortunately, it has been demonstrated that just doing a good job and asking doesn’t work. Thousands upon thousands of salespeople have tried the do a good job and ask for referrals method and have met with dismal results—very often to the point they simply give up asking. In fact, the failure of this method is a major contributor to the misunderstanding of referrals that has resulted in the unfortunate advice given by the trainers above.

Why These Training Methods Fail
To understand how to get referrals, you must first understand why the typical referral training doesn’t work. Understanding what doesn’t work will lead you to understand what does work.

Most referral training is nothing more than a variation of ‘do a good job and ask for referrals.’ Referrals are still an afterthought, a last second question often asked as the salesperson is literally walking out the door. There may be a little twist to it such as offer an ‘incentive’ (read bribe), or ask every time you see a prospect or client because they owe you referrals, or help your client by defining for them who a good prospect is.

The standard referral training creates more problems than it solves. It does solve one problem—it has you ask for referrals. But it creates these problems:
• Asking without first introducing the topic of referrals and allowing the client to become comfortable with the concept takes the client by surprise—it’s an unexpected and unwelcome request.
• It puts your client on the spot. The client is expected to come up with quality referrals in the course of 10 or 15 seconds—an unreasonable expectation
• It doesn’t define for the client who a good referral is (although as we’ve seen, at least a few trainers understand this is an issue)
• It ignores the psychology of the client—that client’s are human and humans typically do things because they see doing them to be in their best interests, and simply asking for referrals doesn’t give the client a reason to give them
• It further ignores the psychology of referrals by ignoring the fact that when a client gives a referral they are putting their credibility on the line with the prospect they refer. Consequently, they won’t give quality referrals unless they KNOW they will not be embarrassed in front of the prospect. They must have an objective way to determine if you’ve earned the referrals.
• It doesn’t make giving referrals easy for the client—it makes them do all the work.

Is it any wonder most salespeople don’t get many quality referrals? The process they’ve been taught actually discourages clients and prospects from giving referrals. If one wanted to develop a system designed to NOT get referrals, they couldn’t come up with a better system than the one most salespeople have been taught.

Almost every one of the training mistakes above can be traced to the standard referral selling process’ failures:
• Losing credibility? Of course, asking unexpected and unwelcome questions that put your client on the spot doesn’t do you any favors with your client.
• Needing a bribe? Certainly, what other reason does the process give for the client to give referrals? None.
• Clients are only good as references? Naturally, when you can’t get a decent referral from them, what else are they good for other than a reference?
• Demand they give referrals because referrals are your right? When the process fails, browbeat your client into giving referrals. That sounds like a winning attitude.

Turn Referrals into a Real Process
If the above advice is wrong, which it is, then how do you get referrals?

If you want to turn your business into a referral-based business, or even if you just want to significantly increase the number and quality of referrals you get from your clients and your prospects, you have to make referrals a real part of your sales process, not just a last second question, a bribe, or a hope for word of mouth marketing.

You have to have a process that:
• Lets your client get comfortable with idea of giving referrals
• Gives the client ample time to think of quality referrals to give
• Defines for the client exactly who a quality prospect for you is
• Gives the client a real reason as to why giving you referrals is in their own best interests
• Gives the client an objective way to determine if you’ve really earned the referrals
• Makes giving a large number of high quality referrals easy

Referrals are not a last minute, off the cuff question to ambush your client with as you’re walking out the door. Instead, true referral selling involves taking the time to work with your client to get them comfortable, to get them educated, to show them why giving referrals is in their best interests, and to allow them to objectively determine if you have earned their trust and their referrals—and then to make it so easy for the them that they freely give 5, 6, 7 or more high quality referrals.

A referral process introduces you to the client as a referral-based salesperson. It leads them though the process, step-by-step to prepare them to give high quality referrals. It gets their verbal agreement to give you a large number of high quality referrals. It defines for them exactly how you will earn their referrals. And then you do the work for them, making it easy for them to give you a large number of high quality referrals.

Like anything else in sales, learning to generate a large number of high quality referrals isn’t magic; it’s learning and perfecting a real process. It takes time, energy, and honing of skills.

Excerpts from Creating a Million Dollar a Year Sales Income: Sales Success Through Client Referrals (John Wiley and Sons, 2007). Available at Amazon, Barnes and Noble, Books a Million, Borders and all fine bookstores.

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