Editor’s Note: This post is part of our special 1-week series on sales prospecting, from experts on the subject.
Prospecting is hard enough at the best of times but how often is the best prospecting tool available to us left under-utilized? In fact, how often is it literally staring us in the face and we stare vacantly back at it? When I say I am talking about REFERRALS, your answer is probably “too often!”
For some reason asking for referrals is often done in a haphazard fashion if indeed it is done at all. There is a reluctance, particularly in B2B sales to ask for a referral during the sales process but as you move towards closing a new deal, that is precisely the time when your new customer is most likely to provide you with a referral. There is an old Irish saying that “going to a wedding is the making of another” given that the celebration and the ebullience of the newly-weds prompts others to start thinking about heading down that path, or aisle to be precise. Same thing with closing a deal, your new customer is excited and pumped about your product or service and enthusiastic about what it is going to do for them and their organization. Now all you have to do is present them with the opportunity to share their enthusiasm with others they think may benefit.
The same applies at renewal time or upsell time – just because the customer didn’t have a referral for you the first time doesn’t mean they won’t later – in other words, don’t just ask once.
So my advice is start looking at every closing of a sale (or renewal or upsell) as the chance to create multiple other sales.
In short elevate referrals to the top of your prospecting activities. And you don’t need to take my word for the power of referrals – here are 10 statistics that spell it out very clearly and salespeople, pay particular attention to the bonus stat #11!
1. Word of Mouth is STILL the most influential factor in driving purchases. Source: Nielsen
2. 91% of customers say they’d give referrals: only 11% of salespeople ask for referrals. Source: DaleCarnegie
3. 73% of executives prefer to work with sales professionals referred by someone they know. Source: IDC
4. Referred customers have a 16% higher lifetime value. Source: Journal of Marketing
5. A referred customer is 18% more loyal than a customer acquired through a different method. Source: Journal of Marketing
6. 84% of B2B decision-makers start their purchase with a referral. Source: Edelman Trust Barometer
7. Every referring customers makes an average of 2.68 invites. Source: SaaSquatch Data Science
8. B2B buyers are 5X more likely to engage when introduced. Source: LinkedIn
9. Referral leads convert 30% better than leads generated from other marketing channels. Source: R&G Technologies
10. Referrals are 4x more valuable than a web lead. Source: Inside Sales
11. Salespeople who actively seek out and exploit referrals earn 4 to 5 times more than those who don’t. Source: @TopSalesWorld