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By James A. Baker
Chairman
Baker Communications
May 2009 (Reprint from 2006)
I think it was Mark Twain who said that everybody talks about the weather but no one ever does anything about it. Well, in sales a rough comparison might be that everyone talks about referral selling, but when everything is said and done, more gets said than gets done.
In some ways, successful referral selling is like the Holy Grail of selling. Research regularly confirms that sales contacts made via a trusted referral source close at much higher rates than contacts made through any other method – often 50% or even higher. Who wouldn’t love to go into a sales presentation knowing that your chances of success were already that high? For this reason, everyone talks about referrals – how to get them, how to use them, how to maximize the opportunity that is obviously there. However, for a significant number of sales reps, referrals never quite live up to the hype. What is the problem?
Well, to start with, some reps are simply uncomfortable with asking for referrals. In a way, it is like a sale within a sale. You have invested a lot of energy and emotion into closing this customer. Now, asking for a referral kind of feels like starting all over again, running the risk of hearing “No” and maybe damaging a relationship that is just starting to go well. It all feels too risky. So, these reps tell themselves that asking for a referral is still a good idea, but the timing is just not right. They intend to ask later but, in truth, they are already snake bit. They will probably never get around to asking.
The best way to turn this story around and boost your success rate with referrals is to change your perspective about what is – or what should be – happening here. Selling is based on building the proper relationships between sales rep and customer (as opposed to order taking, which is a more mechanical, casual process that can be done by anyone with very little work or training.) The most effective sales reps are the ones who have cultivated the art of building healthy relationships with their customers. When the relationship is strong and healthy – which is to say it feels safe and comfortable for everyone – the level of cooperation and collaboration goes way up. This phenomenon can be described in one word – TRUST. When your customer trusts you, it opens doors that would be closed to others. A word to the wise here: in order to open the door to obtaining high quality, profitable referrals, first concentrate on developing genuine trust with your current customers.
Here are five important steps that will help you build trust with your customers:
1. Become a consultant who solves problems instead of a “salesman” who pushes products. – Take plenty of time to get to know your customer. Ask good questions, listen carefully, make sure you understand your customer’s needs and problems, and then offer options and solutions that make sense to the customer, instead of just selling what you have.
2. Maintain a high ethical standard at all times. – Always put the needs of the customer ahead of your own, project a professional image at all times and always keep your promises, even if it ends up costing you something extra in the short term.
3. Make sure you are confident and competent in all your dealings with your customer. – Be proud of your company and enthusiastic about your product, without being pushy or obnoxious. Make sure you are the “expert” in the room when it comes to your products, and those of your competitors, but never talk down to customers or speak ill of your competitors. Above all, be sure to thoroughly connect the dots between the needs or desires your customer has expressed to you and the benefits of the product or solution you are recommending. This transaction is about the customer and his needs, not about you and your desire to sell your products.
4. Protect your credibility. It is all you really have. – Credibility is another way of saying trustworthiness, and since we are talking about building trust here, this is obviously a very important point. You establish credibility by getting involved with helping your client solve his problem – through probing, listening and offering the right solution to meet the need. You protect and build on that credibility by staying involved after the sale is closed. This can be as simple as checking in regularly to see how things are going and finding ways to add extra value after deal is done. These check-ins are NOT for the purpose of seeing if the client is ready to buy something else. You are there to serve the customer, not the other way around. As the customer begins to get to know you, and realizes that you are interested in meeting needs instead of pushing products, his respect and trust for you will go way up.
5. Always treat the customer with respect. – Nobody likes the feeling of being “sold,” not even you. Push a product and you may sell something once. Build a relationship on respect and meeting needs, and you will create a relationship of trust that will keep on selling for a long time.
What does all of this have to do with referrals? Simple. The more you meet these standards of caring and respect with your customer, they more he will trust and respect you. Not only will he be more than happy to help you by providing referrals, he will probably already be telling his colleagues and friends about you, even if you never ask.
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May Sales Quick Tip of the Month – Counter Discounting with Value
One of the most universal complaints heard from sales managers is that their sales reps are being pressured to discount price in order to be competitive in the eyes of customers. Of course, the more you discount, the more you have to boost volume but, in the meantime, customers expect you to discount even more. Keep that up and pretty soon you are out of business. As a rule, discounting to stay competitive is a bad idea. If your price is fair to you and to your customer, change the subject. Get the conversation off of price and onto value. Emphasize how well the product meets the customer’s specific needs. Carefully explain things like your superior product quality, outstanding warranty and stellar service. Help the customer clearly understand that he is getting much more for the money, and be enthusiastic about the opportunity. Customers will always ask for discounts, but that doesn’t mean you can’t close the deal without one. Act like your product is worth it, and they are much more likely to feel that way, too.
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