Asking for referrals is one of the pillars of consultative or relationship-based selling. The reason it works so well lies in two factors: 1) most people like to share information with others, especially if it makes them look good 2) most people trust recommendations from people they know. One need only check out their Facebook or Twitter feed to see these factors in play.
However, many salespeople still fail to ask for referrals on a regular basis. If you fall into this category and want to close deals faster, it’s time to get with the program and do what the top sales pros do.
In my book, Close Deals Faster: The 15 Shortcuts of the Asher Sales Method,I delve into the topic in detail, but I will share with you a few salient points in this post.
Referred leads are easier to close
What is your current lead-to-close ratio? I bet it’s not between 70 and 90 percent – which is what many top salespeople achieve with referred leads. The average is around 50 percent. As you may have experienced, it can take 10 or more leads to close a deal when those leads are cold or handed in by the marketing department, so it is far more lucrative to pursue referrals.
Since people tend to buy from those they like and trust, a referral gives you a head start on the “trust factor.” Adding to the buying pressure is the desire to “keep up with the Joneses.” The prospects starts to think “If Joe bought it for his company, it must be good, and I don’t want to miss out.” Believe it or not, this affects a B2B buyer considering a 10,000 seat software license as much as a B2C buyer considering a handbag.
However, there is one caveat in dealing with referred leads, as you will read in the next section.
The trick to closing referred leads
Here is what the average salesperson does with a referred lead: contacts them once or twice, excited that the lead came from an existing customer so “they are going to be super easy to close.” Then, when the referral does not buy right away, they give up.
Not only do they lose the sale, but they also form the opinion that referred leads are no better than any other lead, so it’s not worth asking for them. Also, the referrer might get upset and feel that you didn’t care enough about their friend or associate to pursue them.
Elite salespeople know it takes an average (can take many more) of 12 touches to close a sale. And since these leads are far likelier to close eventually, they do not give up. That’s the entire lesson: persist, because the payoff is almost guaranteed.
Working referrals will lead you to close deals faster, but only if you make enough touches.