Had a dialogue with a client this week about where their new leads are coming from that lead to new business. The client kept using the term “referrals” as their major driver for new business.
Now on the surface this sounds great and exciting news – referrals are driving all their new business opportunities. Then the dialogue went deeper and the news was not as great.
It appears they were not doing anything to create or control the flow of “referrals.” They just happened to show up from “word of mouth” situations. Is this a real strategy for leads?
This issues happens to most sales people and especially to professional services groups. And, it is similar to the “instant gravitation” found syndrome which is a short term fix. Making matters worst is the continued reliance on this “false” strategy.
The truth is their are two types of “lead generation techniques” which appear to both be labeled as “referrals.” Actually, only one of the techniques is actually a referral.
So let’s look into the two types of “referrals” out there for you.
1. Word of Mouth – This is a common technique that is usually referred to as a referral, yet it is actually only a Word of Mouth situation. Now, it is true that a Word of Mouth situation has some very positive results for many a sales person, professional or company leader. Why? Because the credibility the person who tells someone else about you and your abilities or results delivered – has a transfer effect. Therefore, you, the sales person, have credibility, trust and positive expectations are the beginning of your meeting. This truly beats having to start from the beginning for sure.
Yet, can you build a business or sales pipeline on “word of mouth?” It is not a strong strategy for delivering consistent opportunities – as it is more of a random or surprise special. There is no continuity to this type of lead generation system, in fact, you could hardly call it a system due to the lack of a systematic process.
Word of Mouth is based upon your Goodwill and Timing rather than any focused strategy you are using at the moment. Now don’t get me wrong, I love a good word of mouth opportunity. They do seem to have a higher closing rate due to the credibility transfer due to someone’s strong relationship with the prospect.
2. Referrals – A true referral is something you actually take part in as a process or system. The true referral is a proactive activity you take to focus existing customers – even prospects in some cases – that create sales opportunities for you.
The true referral can be built into your sales process to find ideal customers and at a minimum get a warm rather than cold reception.
Here’s how this works – you are ProActive by ASKING your customers if they know anyone else in your field, industry, or market who could benefit from working with you. This allows the customer to FOCUS their thoughts about who else could benefit from what you offer. The key here is ask using specific parameters rather than the old “do you know anyone I could meet?” That question leads back to Hope Strategy rather than having a Focusing Plan to get more opportunities.
After you have asked a specific type of referral question (specific being exactly the type of person or business you want to work with for your business offer), you could do one of three tactics…
- Get them to write a letter or email with a copy to you. This is the least effective method since there is a lack of emotion in the contact method. However, you would get a mailing address or an email address to use latter.
- Get them to call and introduce you. This is a better method since the referrer has a chance to answer questions about you or your company as well as any experiences they have had with you. Then, you could either have a time or date to call them OR have the phone handed to you to set up the meeting time and place. Either method gets you headed in the right direction with the new lead.
- Get the Referrer to set up a lunch meeting to introduce you. Now you have the best of all opportunities. Assuming the referrer and the lead (prospect) already have a good relationship – you will get the same level of trust and confidence entering into the meeting. Similar to number two above, the prospect has an opportunity to ask questions about you to the referrer – again building confidence and trust. And, as has happened for me in these situations, the referrer starts taking about the results and the great work you have performed for his/her company. And, the best situation is when they are really good friends who have shared their issues. Then the referrer begins to tell the prospect / lead how much you can assist them with a specific issue or problem they currently have to deal with everyday. This last example is the Holy Grail of Sales Opportunities and you have to do is manage or coordinate the account.
There are books written on this subject of developing a “Referral System” to build your business. If you don’t have a referral system in place currently, then you have a major opportunity staring you in the face. Get going and move into the ranks of b2b sales superstar status faster than you ever imaged. It is only one strategy – yet is one of the most effective strategies I know.
Leave nothing to Chance. Be ProActive in your Lead Generation with existing happy and satisfied customers. By the way, I did forget to mention this – satisfied customers are your most enthusiastic evangelists for you and your company. Never leave this growth machine to chance.