Wouldn’t you love to get all your business from referrals? After all, just sitting around waiting for a customer is not very productive!

Without a doubt, there’s great value to be gained in referral business. The closing rate on referrals is double that of normal customers and referrals also tend to close more quickly as well as be more profitable.

So, with such compelling reasons to seek referrals, why don’t more salespeople ask?

The question becomes even more pressing when you consider that 87 per cent of satisfied customers would happily pass along names, yet only 7 per cent of sales reps ever ask, according to recent statistics.

Roadblocks: Fear of Rejection and Incorrect Technique

Two major issues stand in the way – fear of rejection and incorrect technique. Even though rejection is something sales reps face daily, somehow a rejection seems more personal when it involves asking for referrals.

In addition, asking for a referral opens the door for possible negative feedback from customers. As a result, salespeople usually avoid the referrals issue entirely – to keep the relationship positive and avoid stubbing their toe during the sales process.

The other problem is that salespeople generally ask for referrals incorrectly. There are plenty of top performers who have built an excellent book of repeat and referred business. But there is a right way and a wrong way to go about it.

Don’t Just Ask

While the majority of sales consultants don’t ask for referrals at all, those that summon the courage to do so tend to ask in a weak, general sort of way. Here’s an example: ‘Mike, do you know anyone else who would like to buy a car?’ or ‘Linda, do you know anyone else in the market for a car?’

There are a couple of problems with asking like this, even when you do it at the end of a successful customer interaction. Firstly, you’re catching the customer off-guard; most customers can’t think of anyone on the spur of the moment. And secondly, customers are often sensitive about giving out names of friends for fear that you will expect them to purchase now. You can overcome both of these obstacles by taking the pressure off.

First, have a pre-printed form available that provides space for several names and contact information and use a script similar to this –
Sales rep: ‘May I ask a favor? I get a lot of my business from referrals from happy customers like you, so would you mind giving me the names of some people who you think may be in the market for a car at some point in the future? Please keep in mind that I’m not expecting you to know anyone in the market today, just someone who might consider purchasing a car down the line.’

At this point it’s wise to excuse yourself to give the customers some time to think. When you return, ask why they thought of those people and get permission to contact them.
This approach works for two reasons. By providing a form, most people will feel obligated to fill it out. Secondly, you have acknowledged that the customer probably doesn’t know anyone in the market today, but you open up their mind by asking for someone who may consider purchasing in the future – which is almost everyone!

Try this approach with your sold customers and you will be pleasantly surprised by how effective it is.

David Martin
President and Co-Founder – Mar-Kee Consulting Group