Referral leads arguably close easier, race through the pipeline to close faster than other lead source and generate higher loyalty and lifetime value.
Referrals work because people trust people, more than they trust any other source of information. A recent study revealed 84% of people completely trust recommendations from people they know.
The most important ingredient for a successful referral program is to “be referable”. When you delight your clients with exceptional experiences, clients are delighted to provide referrals as a gift to their friends, colleagues and family.
Asking for Referrals
The best times to ask for referrals is either at the peak of the client experience or at its end. Client experience is typically judged by how pleasant (or unpleasant) an experience is, in that moment, for your client.
Referral Program Design
The best referral programs are normally designed with the following characteristics:
- Simplicity: Everything about the program is simple & easy, including communications and processes.
- Transparency: Details of the process, benefits to the client and expectations are communicated consistently, and often, along the referral lifecycle timeline.
- Incentives: Non-monetary incentives are the better choice here, tied directly to your product or service (ex: priority support, added features, etc.)
Three Ask-For-Referral Methods
Method #1 – Current Clients
A systematic way to ask clients for referrals is via the Net Promoter Score (NPS) survey. An NPS survey asks one simple question, “On a scale of 0-10, 10 highest, how likely are you to recommend _____ to a friend, colleague, or family member?” (Fred Reichheld, Bain & Company – trademarked)
Asking Promoter clients (NPS score: 9 or 10) for referrals is given, yet shockingly few companies proactively add this method to their sales process.
Promoter clients who actively provide referrals are more likely to stay clients longer due to the psychological principle of consistency (they act in accordance with their referral behavior). Even if they move to a new company.
Client Movement:A fast way to win new business is by tracking Promoter clients whohave recently switched jobs. Automatingmovement alerts aligned to NPS promoter scores gives you instant access to new sales opportunities.
Method #2 – Indirect Referrals
While current clients are often the best source of referral, there is an indirect route to obtaining referrals. First, ask your client to connect you with their favorite vendors or partners. Then, simply trade leads with complementary suppliers. Also consider including fellow employees in internal lead referral programs.
Method #3 – Social Mining
This simple referral method requires checking your client’s LinkedIn profile and identifying 3-5 connections you want to engage as prospects. Then ask for permission to mention him/her in your communication with the prospect.
Automating successful referral programs involve:
- mapping a process,
- assembling with proper tools,
- activating with consistent workflows & calendaring,
- measuring performance, and finally
- optimizing the system
The result: A systematic and profitable prospecting referral engine that complements other successful prospecting methods, levers and systems.
Focused on top-of-funnel lead generation for 30 years, I’ve created models, systems and processes for starting conversations with people we don’t know with one goal in mind – create opportunities for revenue growth.
Call it account-based sales development, lead generation, sales enablement, demand generation, cold calling, outreach, outbound – my passion has centered around systematizing the process of reaching out to people we don’t know, engaging them in meaningful conversations, and swiftly & respectfully marching them down the active pipeline towards a qualified opportunity.