Referral Harvesting"I never met a referral that I didn't like" by Anonymous.           

In our constant search for the easy way to sell (there is no easy way but we continue to look), one consistent factor is that the most successful sales organizations are aware of their numbers and make course corrections by them.  Organizational and individual patterns of success can be duplicated and challenges recognized and overcome.

Do you know your referral ratio?

When it comes to referrals, we advise our clients to think of themselves as a sales manager.  That’s right; your clients now work for you!  How are you managing and leading your clients, prospects, network, etc. in delivering referrals to you?

A recent article in Forbes Small Business (June 2008) highlighted an important metric – Net Promoter Score; “…those so delighted that they praise a product or service to all within earshot.”  Without going into all the mathematics, this concept measures what proportion of your customers are promoters (for you and your company).  Which customers are referral sources?

Here's one fast way of calculating your Net Promoter Score:

• Of your current prospects, how many are as a result of a referral?  If your referral ratio is below 60%, what can be done to improve it?

Here's what we know:

• Referrals are the best way to generate new business and expand your prospecting network.  We estimate that hit ratios from referred prospects start at 50% and go up from there.

• Set referral goals - how many referrals can be generated for the balance of this year?  Okay, how about for September?  October? Your assignment is to pick a number and write it down.

• Target your referral sources - You know that your products and services are terrific.  Where is the greatest level of personal trust between you and your client?  Which customers are the safest to ask?  Think of those clients who have actually experienced and recognized your outstanding service.  Who comes to mind?  This is where to begin.    Start from the possible and move gradually towards the impossible.

• Ask.  Yes, that's all there is to it, just ask.  We recommend that you even set goals with your referral sources.  Here's a dialogue example: "I'm building my business and would value your assistance.  Is it possible to obtain five referrals/introductions from you over the next ninety days?"  Your assignment is to develop and practice your own dialogue.

• Be specific as to the types of referrals you are seeking.  Targeting specific accounts, individuals or industry niches will be helpful to your referral source.  Ask for and discuss specific strategies for reaching each referral.

• Explain the process - how you will communicate, offer outstanding value and gracefully walk away if you are not the right fit or the best solution.

• Upon conclusion of the activity with the referred account, thank your referral source again (and ask for another!)

Insurance Industry studies have shown that over 90% of those asked are happy to refer business.  That's the good news.  The bad news is that less than 3% are asked for referrals.  Sometimes, we simply expect that a satisfied client will naturally offer business contacts - stop that thinking immediately!  You need to ask.

We always feel good about ourselves when we refer business contacts to others.  Let your clients and referral sources feel good about themselves.

Why not ask for a referral today?  How about 1 by 5:00 p.m.?

Best wishes are flying your way,

Sales Coach Newsletter is a product of Redmond Group, Inc.  We are specialists in the systematic process of developing and retaining new business.  We design sales and retention process maps and unique measurement tools to track progress to meet business objectives.  We conduct in-house workshops, individual and sales team coaching, Webcasts and assist with product launches.
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