TALKING SALES 181: “Referral Strategy” – John Dougan

Referral Strategy 02 - Introduction              “Is it wrong to simply to ask for a referral?” – an interview by John Smibert.

 

 

In my last discussion with John Dougan , titled “Reciprocity: The forgotten Sales Strategy” he mentioned ‘referrals’ as one key thing that a customer will regularly provide as a way of giving back.John Dougan

So in this discussion I asked John to share the strategy he recommends to maximise the quantity of quality referrals obtained.

Why are referrals important? Based on research a referral provides 9 times the chance of a sales outcome than any other type of lead generated.

John talked about the best timing to ask for a referral, how to target a specific referral, and the best approach to obtain it. John emphasised that it is important to make it easier for the customer, to make it easier for me, to sell to somebody else?

In the full discussion – that can be viewed or read below – John  provides insight for salespeople into these referral strategy recommendations. I hope you like it.

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John Dougan is the Intrepid Sales Detective, a noted writer and blogger on sales effectiveness.

Interview

John S: Hello, I’ve got John Dougan with me again – welcome back, John!

John D: Thank you, John!

John S: Hey John, last time we discussed reciprocity as a strategy in sales, and during that discussion you briefly mentioned referrals, and that’s something reciprocity can drive, a desire by the customer to give you referrals. Let’s talk referrals more. I’d like to understand some of the strategies you deploy, and recommend to others to deploy, to maximise the number of referrals you get.

John D: Yes. I think the first strategy when we ask for a referral is knowing when to actually ask for a referral. We have this theory in sales that the moment we can ask for a referral is when the client has signed on the dotted line, and that couldn’t be further from the truth. The moment you’ve provided value to a customer, you are at liberty to ask for a referral.

John S: By providing value you mean after you’d delivered what you promised you were going to deliver, not just the contract itself.

John D: Yes, what you’ve delivered. But John, there are elements before that in conversations, where you might create or provide value that they hadn’t previously thought of. So, at that stage, if there’s anybody else that they feel should benefit from that, it’s worthwhile having the conversation. But I’m not saying have the conversation like that. Again, a common misinterpretation is, “Oh, you’ve signed the dotted line or I’ve created some value. Who do you know that I should be speaking to?” Well, that’s not a strategy, that’s a question.

John S: Okay, so timing is the first step.

John D: Definitely.

John S: Get the timing right. And it’s after, again, reciprocity, after you feel that they should be in a position of wanting to give back.

Referral Strategy 04 - Reciprocity2 720x450John D: Yes. The second one is ‘Who do I want a referral to?’ It’s understanding what customers that that person might know that you actually could do business with. So rather than for example saying, “Who do you know that I should be speaking to?” ask them this question, “How can I make it easier for you to refer me to that specific person, because I know they would find value in xyz.”

John S: Okay. So, you’ve done your research ahead of time, you know who your target customers are, you know that they already have some sort of relationship there.

John D: Yes.

John S: And you’re asking for them to tie that together.

John D: Not only that, you’re using a wonderful referral strategy. Probably the worst thing about referrals, if I flip it on its head, is we ask for referrals based on what work our customer has to do to get us that referral. I’m telling you not to do that, John. I’m telling you to have control and say, “How do I make it easier for you, Mr. Customer, to refer me?”

John S: Great point. I get the guts of that, and I think it’s very, very important. The other thing is you may not know who they know, even if you’ve done research. I don’t think it’s a good idea they say, “Who do you know?” One of the recommendations I make to people is they have a very clear definition of who a target client looks like, and say, “Do you know anybody in an organisation who has these characteristics and these sort of issues and challenges and so on?” rather than say, “Do you know anybody that might need our product or service?”

John D: Well, there’s another opportunity in that, John, in that you can review the steps that you’ve taken with your current customer. As a direct result of that, you can actually create a battle card of what that process looked like and where you added specific value. When you’re doing that review with your customer, why not turn around and say, “Listen, we provided this value there. I know that you deal with these third-party resellers, I know you have these clients. Is there anybody there where I can make it easier for you to refer me into?”

John S: I think that’s a brilliant approach to getting a referral. And a referral is really something that’s of high value, and the customer understands when they give you a referral that it is good value to you, so it is reciprocity in the way they do it. And you’re just saying, “I’m going to make it easy for you. I’m not going to make it your job, it’s still my job; I’m just going to make it easy for you to help me.”

John D: That’s the perfect reciprocity, isn’t it? How do I make it easier for you to make it easier for me to sell to somebody else? And depending on whose research you read, and I read an awful lot – in fact, probably all of them – referrals are up to nine times more likely to close.

Referral Strategy 03 - Saleswoman 700x470John S: Oh, it’s absolutely the way to go, isn’t it?

John D: Without a shadow of a doubt.

John S: So, give me a bottom line on this. Referrals is the way to go because it’s many, many more times… you get the results versus cold calls or trying to get in the door yourself. But the bottom line for referrals on how to do it successfully is?

John D: How to get successful referrals is very simple. Become the trusted advisor. And John, when I say that, I mean give value at every interaction where you might ask for a referral. If it’s reviewing an approach that you took to win a client, don’t be afraid to review that process so that the client gets absolute benefit in understanding that. Ask for a referral at the point that you give any value to a client, otherwise you might miss your opportunity.

John S: Great advice, John – thank you very much, and good referring!

John D: Thank you!

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If you like John Dougan  you can see more of his interviews here:

  1. Adapting Sales Process to Buyer Behaviour
  2. Choosing the right sales methodology
  3. The social selling evolution
  4. The sales profession
  5. Why is your sales meeting de-motivating?
  6. Research shows sales meetings suck
  7. Coaching for sustainable sales growth
  8. Coaching for behavioural change
  9. Reciprocity: The forgotten sales strategy

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John works with companies who are striving to grow high margin revenue by retaining customers, creating value for customers and strategically acquiring new customers. He loves successful and happy sales teams who are driving positive change for their customers. He coaches sales professionals who are keen to enhance their career. He helps them develop their skills and capabilities and enhance & leverage their personal brand.

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