By Bob Burg
It seems as though most salespeople constantly and consistently leave money on the table by not asking for and receiving referrals after a successful presentation. There are many reasons for this but they all basically fall under the category of fear of rejection and fear of the referral-gathering process itself.
In this article though, let’s discuss why referrals are so important. What I’ve found is that, until a sales professional truly understands why referrals offer such a benefit to him or her, they will continue to forego asking. The fact is that, for most salespeople, it’s simply easier not to ask. Easier in the short term, that is. In the long-term, the salesperson who does not ask for and obtain referrals is making their life so much harder, and unnecessarily so.
Benefits of Referrals include:
#1 It’s easier to set the appointment with a referred prospect.
#2 Money is generally less of an issue
#3 Typically, with a referred prospect, it’s easier to close the sale.
#4 Referred prospects are more apt to refer others to you.
Let’s take these one by one.
It’s easier to set the appointment with a referred prospect. Why? Borrowed influence. Someone whom that prospect knows, likes and trusts has made that referral. As you know, it’s a lot more valuable for someone with whom the prospect has that type of relationship to suggest he or she see you, then for you to suggest it yourself. Not to mention the fact that you might not ever know this prospect or have the opportunity to ever meet them, if it wasn’t for the person who referred you.
Money is generally less of an issue. Don’t get me wrong. It’s not that money suddenly becomes an unimportant concept in that person’s life. It’s just that, since the question of trust and credibility has already been handled, via the referral, you can sell on value rather than on price. And, as you know, typically the problem isn’t that an item costs too much; it’s that the perceived value of the product or service doesn’t equal the price.
Typically, with a referred prospect, it’s easier to close the sale. If you don’t like the term “close the sale,” then we can substitute, “complete the transaction.” Either way, the point is that, once again, because of the borrowed trust you have with our prospect, completing the transaction is a lot easier than it would be if you had to establish the “know you, like you, trust you feelings” on your own. Of course, you still must prove yourself worthy of such during the presentation, but you begin in a lot better position than you would otherwise.
Referred prospects are more apt to refer others to you. But, to me, here is the key benefit: Referred prospects are already of the mindset that that's how you do business. After all, that's how they met you. So to them, providing you with referrals is natural. That's simply how you run your business. In other words, as far as they’re concerned, it’s a natural part of the process. Because of this, you’ll hardly ever receive the objection, “Well, I don’t like to refer salespeople to my friends.” Of course, even if they don’t say that, that is often their true objection. After all, they’ve been burned before; referring a salesperson to a friend and then being made to look bad by an overbearing, non-relenting salesperson. Since they met you by way of referral, and you’re style and professionalism was such that they like you and feel very comfortable with you that is no longer a challenge for them. They know you’ll make them look good to those they refer.
With a healthy referral-based business, your business becomes a lot easier, a lot more fun, and much more profitable, as you’ll constantly find yourself presenting to those who are A-list prospects.
Look at it this way. As legend has it, at the end of a rainbow is a pot of gold. Most salespeople spend most of their time at the very beginning of that rainbow, doing all the typical “prospecting” things. They pound the pavement, make teleprospecting calls, qualify interest, and everything else. Once you’ve cultivated that network of A-list referrals, however, you get to spend your time mostly at the pot of gold; talking to people that want to buy, need to buy, and can buy. In other words, you’ll invest the majority of your working day around the people whose lives you can add significant value to through helping them own your products and services.
Bob Burg is coauthor (with John David Mann) of The Go-Giver and Go-Givers Sell More. You can download Chapter One of both books at www.Burg.com
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