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Written by Jeff Hardesty
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Monday, 30 October 2006 |
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Word Count: 1190 10 Tips that will Increase Your Referral Ratio
Tip # 1
Discipline Yourself to a Routine of ‘Asking’
Here’s something profound. The reason most of us do not get referrals on a
routine basis is because we do not ask for them on a routine basis. Well, it’s
almost that simple. What would be the upside on your year-end W-2 if you asked
for 2 referrals from each of your new customers? Let’s say you average 6 sales
per month. That would be 12 referrals per month or 144 per year. Conservatively,
you close half of those warm leads. Multiply 72 by your average revenue per
sale. Then calculate your commission percentage off the total revenue sold. Now
ask yourself if you can afford not to ask for referrals on a routine basis.
Tip # 2
Develop a process to ‘Set the Stage’
Asking for a referral is one thing, but how many times do you actually get one?
Execute a Powerful Routine after you sign up a new customer, and request
permission for 3 additional minutes to get their professional feedback. Ask a
series of questions soliciting their opinion on ways you can be more effective
with your sales process, from initial contact to point of sale, with individuals
in the same industry and parallel titles. You are now setting the stage for your
future success. Over time, your contacts will give you a free ‘Masters Degree.’
Remember to ‘Pack your bags, but set the stage.’
Tip # 3
Communicate to a "Win-Win" Agreement
Be honest and sincere in reference to the importance of referrals for running
your business effectively. Tell your story. If you have a high referral ratio
let them know that and why it is high. Customers respect a good businessperson
more than a good salesperson. Try to pick a time when the contact would feel
comfortable giving a referral to help your business. That may not be at the
point of sale, but upon service implementation or some time in the future when
you have proved you delivered what you promised. The important point is you must
define with the contact when it can happen or what criteria need to be met for
it to happen.
Tip # 4
Follow through in order to receive a consistently high ratio of referrals.
You may not ask for a referral until (a) the service has been implemented and
(b) the customer is satisfied. But as described in Tip #3, you want to minimally
set a referral foundation at the point of sale and receive a commitment to when
you’ll receive one. Now, this is very important. Always write in your day timer
in front of the contact when the expectation is set, and let them know you are
making note of it. Treat it like an appointment for your future success. It’s
found business and will afford you a higher closing ratio, shorter sales cycle
and most importantly, more referrals! So, follow-up and get it!
Tip # 5
Develop a Referral Program
Be creative. Give up some money. Maybe it’s a gift certificate to a local
restaurant (hopefully a customer) or a graduated percent off of their next
invoice. An entrepreneurial mind will come up with a few flexible programs that
fit your level of buyer. After all, you’re not putting anything out until the
referral is sold. The old saying, "money makes money" is still true. Beside the
tax right off (check with your accountant), contacts absolutely enjoy getting a
little something. Measure the ROI and the benefit will be evident.
Tip # 6
Become the Messenger
Be sure to give the referral gifts out promptly on sold referrals. Deliver it in
person, since it also serves as an excellent time to prime the pump for
additional referrals. Don’t underestimate the power of this simple discipline. I
have experienced ‘millionaires’ who reopened their black books after receiving
$20 dollar gift certificates. After all, it’s not the amount but the gesture.
And because you are spending your valuable time being the messenger, you will
without a doubt focus on receiving one or two more warm leads.
Tip # 7
Promote a Grass Roots Chamber Program
Offer local Chambers a deal they can not refuse. Chambers want to offer their
membership a better deal, one that their members can not receive from regular
street pricing. They are open to donations to help their chamber and are also
motivated to grow their membership. Instead of offering a residual based off of
sales, offer to bring them in a certain number of new members each month.
After all, a certain percentage of businesses you call on will not be members,
and if you can show them a return on their investment, they will certainly join
the Chamber to receive it. By helping others you will see your referral ratio
reach the sky!
Tip # 8
Identify Potential ‘Bird Dogs’
‘Bird dogs’ are used by hunters to point and fetch game birds for their owners.
In sales, a ‘bird dog’ is someone who has multiple relationships with your
potential customers and they are motivated to routinely feed you contacts for
your marketing efforts. Research potential business people that may fit into
this profile, and take them out to lunch. Explain your referral program and how
it could supplement their core business revenue stream. For potential ‘Big
Hitters’ be prepared to customize your referral program to align with their
motivations. Treat them like gold and they will open up their Rolodex.
Tip #9
‘Get Married’ to a Collaboration Partner
There are companies that provide products or services in your ‘value chain’ but
do not compete directly with your product or service. Those companies and the
professional individuals that sell for them should be a point of concentration
for you to identify and contact for strategies of collaboration. I refer to this
relationship as "Natural Marriages." Contact 3 sales professionals that seem to
indicate a ‘natural marriage’ for you and them. Outline what’s in it for them.
Then ask them what you could reasonably expect over time.
Tip # 10
Join or Start a Lead Group
You have to eat lunch, right? So why not join or consider developing a Lead
Group of entrepreneurial individuals who are motivated to get together twice a
month to share leads. Find individuals who are accountable to bringing in the
minimum amount of leads each meeting as outlined in your group’s business rules.
Make sure every member is covered by the 80-20 rule, getting 80% of their leads
from 20% of the members. And don’t be shy about charging a quarterly membership
fee. That way, members have some ‘skin’ in the game.
Jeff Hardesty is President of JDH Group, Inc. and the Developer of the X2 Sales
System®, a blended training system that teaches sales professionals the
competency of setting C-level business appointments. Jeff can be reached at
This email address is being protected from spam bots, you need Javascript enabled to view it
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