Ask For The Referral
- Dan Greenberg
- Dec 14, 2023
- 6 min read
Updated: Jan 10, 2024
How many cold calls, messages, and emails is one referral worth? I wish I knew the exact answer to that question, but I don’t. What I do know is that the answer is ‘a lot’! Referrals are incredibly valuable and many many salespeople either don’t ask for them or don’t ask for them enough. I was guilty of this for most of my career. The reason why referrals are so valuable is that the first step with cold outreach is name recognition, followed by name / product association, followed by relevance level for the client. Not only do you get to skip all of those steps with a referral, you also get to skip the majority of the next few steps, which are proving thought leadership capabilities, and earning respect, and credibility.
If a buyer who is in a similar situation to the customer you are referred to makes an introduction, the new prospect will immediately assign you a level of credibility that would have likely taken months for you to earn otherwise. This is not only a huge time saver for salespeople, but in many situations, you may not have ever broken through all of those steps without the referral. This is juxtaposed to cold emails, cold messages, and cold calls, which have no magic formula, so it does not matter how good you are at formulating them, the overwhelming majority will get disregarded, rejected, or otherwise passed over.
There are essentially two ways to think about building your pipeline. There is one method that will pay immediate dividends, and one method that will pay long term dividends. The latter is research, sales intelligence tools, and cold outreach. With this method, you have the ability to research in bulk and send campaign based, although targeted and relevant messages to scalable groups of prospects. This approach, for the most part, will benefit your book of business 4–6 months down the road. In other words, if you are reading this in mid-December, and you don’t start researched and targeted cold outreach now, you will likely have a bad April, May, and June.
The other method is the one that pays more immediate dividends. It is less scalable, and more reliant on the sellers own network and capabilities, but it is much more effective, and much more efficient. This method is leveraging your own network, and asking for referrals. This method allows you to save time and be more effective in outreach. The problem with network leverage is that most sellers exhaust their own network pretty early in their tenure at a new company, so as far as this method is concerned we are left with referrals. Assuming that you can continue to grow your book of business, there will be a constantly evolving and growing base from which to ask for referrals, and one of the best things about referrals, as referenced above, is that they can have a positive impact on a book of business in the short run.
Who: As sellers, we should be thinking pretty consistently about where we should be mining for new referrals. We can, of course, ask existing clients for referrals. This makes a lot of sense because existing clients are likely to have some affinity towards your solution, and likely have contacts in similar industries where the solutions would have similar benefits. But there are a number of other potential breeding grounds for referrals that often get overlooked. Ask prospects for referrals. Don’t worry about losing a deal by asking your prospects who else you can help. Prospects who have recently said no, are generally more inclined to want to help, and prospects who are on the fence, who decide to refer you, will become more inclined to buy because they have created social pressure for themselves by tacitly vouching for you. It is also a good idea to think about internal channel partnership managers, marketing managers and product managers. They all have connections with counterparts and may be able to make warm introductions, especially the channel partnership managers whose job it is to create opportunities through partners.
Where / When: Asking for referrals is too often thought of as a stage in the sales process. It shouldn’t be. There is no need to wait until after the prospect says no, or until they become a client. It is important to be careful not to lead the prospect to believe that you are not focused on them, but in more social type settings, or at the end of calls, or in group meeting settings, it is often appropriate to ask prospects, clients, or partners who else they know that could benefit from a conversation. Making the ask seem like a very low lift is key. If you ask in a heavy or formal way, you will be sending a signal that this is a big ask and the responder will be less likely to comply. Conventions, conferences, and trade shows are another great place to ask for referrals. Attendees, even those who you do not yet work with, are in a networking mindset, and the ask will seem very appropriate.
Why: As we mentioned above, referrals are significantly more valuable, efficient, and more enjoyable to work than cold outreach. According to a Nielsen survey from 2012, 92% of consumers trust referrals from friends and family over other forms of advertising. Now, you may say that this is stated preferences, and that this is more of a B2C survey, and you would be right about both, but sales is a human to human endeavor. The individuals that you deal with want to find a reason, even a justification, to trust some person or product over others, and oftentimes this is very hard for them to parse without something to grasp onto. A referral can be just that piece of comfort that they are searching for. But if you need a little more help bridging the gap from B2C to B2B, according to a Blanc and Otus study, 86% of B2B buyers say word-of-mouth is the most influential factor in making purchase decisions. And, if you need one more stat to think about, an Influative study tells us that 84% of B2B decision makers start the buying process with a referral.
How: This only leaves us with the mechanics of the ask, which is, of course, a very important part. There are a few things to think about when asking for referrals. You should do it somewhat often, maybe two to four times a year with existing clients because their networks change, and they aren’t always thinking about everyone they know. Make sure to ask leading, but unobtrusive and lightweight questions when making the ask so that you make it easier for the prospect or client to think of the right person. Prompt them with the types of positions, or types of problems, or company names that will help them zero in on the right referrals, and then help them hone in on the right people as they answer your initial suggestions. It is also important to assure the potential referrer that you are going to have the right type of business conversation with their contact, so that they are not worried about you making them look bad. So, refer back to good conversations that you have had with the referrer and let them know that at the very least, it will be a good chance for their counterpart to learn a bit about the market, just as they have. Lastly, it is important to make the logistics as easy as possible for your potential referrer. If they have to send a message, offer to pre-write it for them, if they are having trouble thinking of the best way to make the connection, help them with the topics. And remember, you are in sales. Follow up will be key. This will not be at the top of their priority list, so make sure you are diligent about follow up.
Pipeline is key to any seller’s success. A seller must have options so that they don’t feel doomed if their next big potential deal falls through. Having only one, or a few deals in the pipeline will make a seller come off as needy, and it will limit their likelihood to close deals. Growing a pipeline is a consistent activity, and the best and most enjoyable leads over the course of time will come from referrals. According to the same Influitive study referenced above, 87% of B2B frontline sales personnel, 82% of sales leaders, and 78% of marketers believe that referrals are vital to sales success. They are right.
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