The Steps Involved in Maximising Customer Referrals

In a recent blog piece we talked about the importance of customer referrals in maximising sales success.

This checklist will help you to maximise sales referrals for your business: 

1. Analyse the source of your sales.  First check to see where your sales, leads and enquiries come from and the closure rates for each source.  How many are derived from customer referrals?  

2. Set a target for referrals.  How many of your customers have been asked for a referral in the past year?  Set a target for the number of referrals you want to get over the next 12 months and the value of additional sales you expect as a result.

4. Put a plan in place for referral-generated sales.  Don’t leave referrals to chance - list all the actions required by sales and service to meet your sales referral targets.  Put names, as well as completion and review dates beside all the those from whom referrals are to be sought.

5. Make sales referrals a part of your key account management plans.  So, when your team is discussing key customer accounts, put sales referrals on the agenda and leave it there.

6. Deliver on your promises.  If you want referrals then you must deliver on your promises first.  That is you must ensure that your customer is satisfied with your product and service.  Before you ask for a referral, ask the customer for feedback.  This will either identify opportunities for strengthening your relationship with your customer, or immediately pave the way for referrals, or testimonials.

7. Be an expert not a sales person.  If your customer considers you to be an expert, a solutions provider, or a problem solver, as opposed to a sales person, then you are already well on the way to winning his commendation.  Also you have made it easy for him to pass on a referral.  After all, everybody is cautious about setting a sales person loose on a friend, or colleague.

8. Become a partner not a supplier.  If you are going to be a problem solver, as opposed to a sales person, then to be consistent your organisation should position itself as a partner, not just a supplier. It’s a small change in terminology, but a major difference in mindset and one that your customer will reward you for.

9. Share sales commissions on referral business with service and support staff.  Referral business comes from good service, as much as good salesmanship, so it makes sense to reward and encourage service for sales referrals.  Indeed, front line staff are best positioned to hear about the customer’s buying plans, company changes, etc.

10. Make your buyer and his/her manager look good.  When a manager in a customer organisation makes the effort of passing on referrals they are in effect saying a personal thank you.  All organisations have their own internal politics and pressures.  All managers have their own egos and ambitions.  So, helping them in these areas, is as important as providing them with technology, products, or services. This can be achieved in a lot of ways.  One simple way is to provide the manager with specialist training, information and ideas that will be of specific help to him.  Above all let him take the credit and make him, or her look good. 

11. Ask, but at the right time.  Don’t ask for referrals before it is reasonable to do so.  Wait until the customer has experienced your company and its products sufficiently to be able to pass judgement, both for themselves and others.  It is unfair to ask the customer to attach his good name to something that he or she has had only limited experience of.  More important still, it makes you look pushy if you ask for a referral the minute you have closed the sale. 

12. Ask, but only the right people.  Make a list of the customers you can ask for referrals.  Not all customers will be raving fans of your company and maybe even different contacts in the same company may be more positively disposed to helping you.  

13. Ask your customers for testimonials and agree where and where they can be used.  What your customers say about you, particularly, where they attach their name to it, has more impact that anything you, or your marketing people, have to say.  

14. Generate publicity for your customer (and yourself).  Another important way to bask in the glory of what you have done for your customer and to directly and indirectly generate referral business is to get publicity for your clients.  For example, if your customer has just implemented your technology help them to get trade press publicity regarding their new capabilities and facilities.  Let them take most of the limelight, as long as your company’s name and its products are mentioned. 

15. Say thank you for referrals.  Make sure you say a personal thank you for any referrals.  Make a purpose of calling your customer to say thank you and of updating your customer on how things progress with the referral.  If you get to quote, or get the contract, say thank you with a bottle of wine, a meal out, or something else.  Find another way of showing your gratitude if your customer’s company policy dictates against gifts.  

16. Provide an incentive for referrals (if appropriate).  Any ongoing arrangement regarding referrals should involve a referral fee, or percentage based on resulting sales.  In setting on this, it is useful to analyse the relative cost of generating a sales lead and closing a sale (from different sources).

17. Pass referrals both ways.  One of the best ways to encourage referrals is to provide your customer, or partner with referrals/useful contacts in turn. 

18. Use Linked-In to ask for referrals from your contacts - see the full details of who your contacts know and ask for an introductions to those that may represent potential customers.  See our guide to using Linked-In.

19. Make sure your customer knows your full range of offerings.  It is easy to assume that your customer, in particular, all departments, managers and buyers, in the company know about your company and your full range of products and solutions.  If they do not know then you are missing out in sales referrals within your customer’s organisation, as well as outside.  Also make sure your customers know the type of customers you are looking for.