Referrals are great, aren’t they? When you get that phone call or e-intro where someone recommends your business to someone else, it makes you feel all warm and fuzzy inside. What’s more, it might make you believe that sales success can be yours simply by providing referral-worthy insights and superior service, right?
Thousands of books (more than 4,000 show up in an Amazon.com search for “referrals”) have been published touting the myriad virtues of seeking, earning and benefiting from referrals. What is seldom talked about, however, are the dangers that lurk when you place too much emphasis on expecting and waiting for referrals. Read on to learn more about those dangers, and how to avoid them.
First, however, let me at least acknowledge a couple reasons why referrals are so highly regarded:
- Referrals show that the person making the referral knows, likes and trusts you enough to put his or her own reputation on the line.
- Referral partners – individually or as part of a strategically assembled “power circle” – can help you better understand your business, your target market, and how to promote your services.
On the flip side, waiting for referrals at the expense of deploying stronger sales tactics can be a fool’s game. As Jeffrey J. Fox notes in The Secrets of Great Rainmakers, you can’t hope to sell much of anything by “…sitting at a desk doing busywork, procrastinating, hoping for the phone to ring, and kidding yourself.”
So why do too many business owners become so easily seduced into waiting for, expecting and relying on referrals? I think there are three main reasons. Depending on referrals lets you:
- Maintain an appearance of humility. Instead of tooting your own proverbial horn, others are doing it for you. And being modest makes you that much more worthy of being rewarded with referrals in the first place, doesn’t it?
- Avoid your aversion to selling. Many (perhaps most) business professionals I’ve encountered in Indianapolis and the central Indiana area have an overriding lack of confidence in every aspect of sales, from sales strategy to sales management to the sales process itself. By depending on others to be your sales force, you’re free to focus on your core strengths. Or, if the mood strikes, on rearranging your paper clips.
- Avoid taking control of your destiny. After all, if someone else is calling the shots, how can you be blamed for serving the wrong markets or getting off track from your core competencies?
Although waiting passively for referrals can be dangerous, you can turn a negative into a highly profitable positive. Here’s how:
- Examine how the successful referrals you’ve received came about. Trace them back to their roots. What sales, marketing or networking seeds did you sow – perhaps months or years earlier – that bore the fruit of a profitable referral? Analyze enough of these successes and you’ll probably find common ground, some sales effort or sales strategy that worked, again and again. Find that common ground, and then actively ramp up that part of your sales system for faster sales growth.
- Understand your ideal customer and find out who influences them. Establish strategic relationships with these influencers and you’ll find that your subsequent referrals – based on a solid understanding of your value proposition – will be higher quality and more profitable. As Jeffrey Gitomer notes in the Little Red Book of Selling, “…find the influencers, influence the influencers, and hear that cash register ring.”
- Be proactive, not reactive. To get referrals, make referrals. More importantly, make sure you are worthy of receiving referrals in the first place. Communicate clearly, be authentic and provide superior service.
Overdoing any single aspect of a sales and marketing mix can be dangerous. But if you make the effort to improve your referral system as just one facet of your overall sales strategy and marketing program, your sales efforts and bottom line success should improve.
Still not sure how to make the necessary changes to your sales program and sales processes? Contact a Sales Xceleration Advisor today. They would love to learn more about your day-to-day sales challenges and help you discover how to improve your bottom line sales results.
