Cold calling is super effective…if you know what you are doing! What I can’t understand is why so many companies emphasize prospecting (cold calling) aka making new friends :), when the majority of companies I consult with don’t even ask their current clients (people that love them) for referrals? The answer is they just don’t know how to do it! Sure, I could call you and say, “Hey, who do you know that would be interested in working with me?”, but I would rate this “ask” as an F-. Why? Because referrals have nothing to do with me! Referrals have everything to do with you “my client” and your friends. Have you heard the line “Your referrals are the greatest compliment I could receive?” Yuck! Or worse: “I build my business on your referrals.” Who cares? Sorry, but this is so unprofessional.
Let’s break this down; referrals are NOT about you so it’s not a compliment to you. Referrals are given because your client believes that you will make him/her look good with their friends/clients. Has anyone ever said, I’ll have them call you? Or your client won’t even give you their friend’s phone number? It’s because they don’t trust that you will make them look good. Referrals are about your clients building stronger relationships with their clients, and you (the salesperson) are just the one to build that relationship! Introductions are just as awful an approach. If I ask you to introduce me to the VP of Sales of XYZ corporation, I’m hoping that you will actually do it — or more accurately, make you work for me, and hope that you can overcome every objection that might come up — and I’m hoping that you are good enough to sell for me! Worse, you are putting your paycheck in the hands of someone that may never call you because you never got their phone number. Unfortunately, if sales were super easy we would all just sit back and wait for the phone to ring. That doesn’t happen today; we must go out and get what we want, and to sit back and wait passively is a very poor strategy.
You must have an attitude of service. A better way to ask for a referral is: Who do you know that’s like you, super successful, that might be open to… (you fill in the blank). But that leads us to the next problem which is that most companies don’t even know their target market. Who do you want to be referred to? If I said, “Who do you know that needs a coach?”, you might refer me to your sick, broke, miserable cousin. No thank you. But if I asked you, “Who owns a company that is super successful and wants to take their business to the next level”, Hmmm now you are thinking about who you know that is a super-successful business owner! I will never forget my good friend Mel— she has me come and speak to her networking groups every year! A few years ago we got a beer after one of the events and she asked about my life, clients etc., and at that time I had a client that was literally the devil’s best friend. They had lots of money but I was not dealing with ethical people and I kind of started to complain and she asked me “who do you want to work with?” I blurted out Christians! I just want to work with a Christian business owner! Mel said, well you have to meet Tim Flanagan. I asked, “Oh what do you like about him?” And she went on and on about how he is a man of integrity and is so genuine and runs a very successful financial firm in Charlotte. So I called him and, as they say, the rest is history. I worked with his company to take their sales to the next level. Watch Tamara in Action
Here’s the point! I got what I asked for! What kind of referrals are you asking for? You want vertical referrals, meaning you want to be referred to rich people! Here is a real estate example of the difference between a traditional referral versus a vertical referral. “Who do you know that is looking to buy a home in Charlotte? “(normal way to ask for a referral). A vertical referral would be “Who do you know, that’s like you, financially savvy, that might be looking for a second home?” Now this is a much classier way to ask for a vertical referral, because the question in itself presupposes that the person, your client, would refer you to is already rich, because you are asking for someone that is looking to buy a second home.
When I visit a company and do an initial 1-hour workshop, I ask: “Do you have a standard referral form?” “Do you ask every new client for a referral?” The answer sadly is no, most salespeople don’t practice good sales etiquette. I will usually hand out my referral form and then email them mine in a word document so that they can copy it and write their own tag line or way to ask for referrals. When I actually train a group of professional salespeople I take my referral form to the next level and show them how to get what they really want. For example, on my old referral form it says:
Who else can we make this happy? Who do you know that is a friend or entrepreneur that owns a business with a team of 10 or more salespeople; a company, organization, networking group or association that would enjoy a free workshop?
Simple right? But how could I be even more specific so that I walk away with a name and a cell phone number?
My new referral form says:
Who else can we make this happy? Who do you know that is: a friend or entrepreneur that owns a business with a team of 20 or more salespeople, a VP of Sales for a large company; someone that hires speakers such as a corporate meeting planner, a trade-group, or association that would enjoy hiring a professional speaker?
Now I can drill down even more and say: maybe the president or program director of a local or national association, like SHRM or a trade group, like a chamber or Rotary club, or maybe a corporation that has sales reps that need to polish their phone skills to get even more appointments, like a financial firm or a Medical supply company.
Feel free to contact me with a list of referrals, my job is to make you look good, of course.
If you aren’t’ sold on the effectiveness of referrals, read what Lind has to say about Henderson Properties.
“We hired Tamara as our Keynote speaker for our company retreat and in addition we hired her to help us with some internal documents to improve our overall customer service and sales. As a result, Tamara created a custom referral form, as we did not have anything in place nor did we ask for referrals. We obtained 65 referrals in our first quarter and closed 10 of them resulting in $27,000 of gross revenue. Our year-end results are remarkable! We obtained 228 referrals, closed 75 and had gross sales of $122,288.89, with another $12,000 about to come in! This is money that would have never come in if we hadn’t been proactive to build our business. Thank you Tamara!”
-Lind Goodman Division Sales Manager for Henderson Properties
As of August they have obtained an additional 108 referrals this year…not bad for extra income, that comes in as a result of a one sheet referral form!
Just an FYI, one referral is equivalent to 15 cold calls. Let’s start strengthening relationships and be smarter in our approach to build our business!
Listen to Tamara’s podcast! How to Ask for Referrals…The Classy Way
Call us to join the next Prospecting Mastery Class and learn how to convert all those referrals into paid clients!