Referral business is the best business to have. It is a marketplace signal that your customers respect and trust your solutions. They perceive you as a valued advisor and partner to their business.
The trust you earn with your current customers doesn’t automatically transfer when they refer you to other companies.
Are you making this mis-assumption? If so, in your mind their referral shortens your sales cycle and you are nearer to closing.
That’s not what the referral customer is assuming.
A referral means that the door is open and the call is warm.
A referral means that you can leverage your relationship with the referring company in setting that first meeting with the prospective customer.
A referral does not mean that you start at anywhere near the level of knowledge and interpersonal relationship you have earned with the customer furnishing you with that introductory referral.
Qualify referrals before you contact them. They may not be appropriate for building your business.
Qualify referrals again before you meet with them. These potential new customers may bring baggage which you do not wish to associate with your brand and professional reputation.
Qualify referrals again after you have that first meeting with them.
Your current customers may send you to a competitor to glean information. They will ask you about what their competitor told you during your “referral” meeting. I’ve had this scenario happen to me more than once early in my career when I was gung-ho about building my pipeline.
Your current customers may send you to a dead end. You already thanked them for the referral. Now have the guts to tell them that their referral was a waste of your time. Press them for why they made the referral in the first place. If you truly have a transparent relationship with each other, your current customers will be comfortable sharing with you that your request for referral made them uncomfortable. They enjoy the competitive advantage you offer to their own company. They aren’t at all interested in sharing you with anyone else. (Yes, again a hindsight vignette from early on in my sales career).
Asking for referrals is a solid component of your business development and sales process. Pushing all of your customers to provide referrals may be uncomfortable for them. Learn the difference.
Continuously qualify and re-qualify referrals.
My advice: Before you rush off in pursuit of the next bright shiny referral object, sleep on the referral. Do your homework, just as you would with a bright shiny new unqualified lead.
Save yourself a lot of wasted time in the process.
Babette N. Ten Haken, President of Sales Aerobics for Engineers®, LLC is a management strategist and team-building leadership coach. She helps companies, startups and family-owned businesses who wrestle with unpredictable revenue streams. She and her clients co-create Playbooks, resulting in more productive, profitable and healthy organizations. Her Playbook on leadership and business strategies, including tools, Do YOU Mean Business? is available on Amazon.com.