How to Earn Referrals

I’m going to make your job a lot easier today.

Every sales pro knows that referrals make for easier sales. How easy? Research shows that well over half of the opportunities that come from referrals end up as a sale, according to Joanne Black, author of No More Cold Calling (Warner, 2006). And that’s better than any other lead generation method.

So you should ask every new customer for a referral after you ...make the sale, right? Wrong. The moment you’ve made the first sale is absolute worst time to ask for a referral. Here’s why.

Referrals are all about risk and trust. When a customer gives you a referral, they’re risking the relationship that they have with a friend or colleague. If you’ve just closed a deal, that risk is piled on top of the risk the customer already took by deciding to buy from you. If you (or your firm) can’t deliver, the customer will look doubly stupid.

You have to earn the right to ask for a referral. There are two ways to do this.

Technique #1. The Wait and See. This comes from Jeffrey Gitomer, author of The Sales Bible (Wiley, 2003). When the customer decides to buy, say something like this:

Wonderful! Thanks for agreeing to become our customer. You’ll be amazed at the quality of our product and how well we’re going to service it. But I have one request. I want you to think of some friends and colleagues who you think should be doing business with us – providing we are as incredible as I say we are. And once I proven to you, beyond all doubt, that my firm is fantastic, I’m going ask you to contact those people to suggest they meet with me. Does that sound fair to you?

Then follow up... after you're certain that you've wowed the customer. 

Technique #2. The Counter-Referral. This is simple: find a customer for your customer. Because you’re in sales, you know lots of people, right? If you use your connections to bring in some extra business for your customer, you’ve earned the right – tit for tat – to ask for a referral.  Although Gitomer also talks about this, I first heard this idea from Sam Reese, CEO of Miller Heiman, a giant sales training firm.

Here’s the capper. If you want a truckload of referrals, combine the two techniques. As you gain the reputation not just for being the best, but also for helping your customers get more business, your customers will be recommending you to everyone they know – without you ever having to ask.