It is a well-known fact that one of the best ways to generate new leads for a business is by asking for referrals. However, not all referrals are created equal.
Here are some tips to get the best possible referrals and get so good at it that you can become a referral ninja:
Whom to ask for referrals:
It is a good idea to ask for a referral only from a good customer. The definition of a good customer according to me is the following:
- A customer who sees a lot of value from buying/using your products/services.
- A customer who pays you on time
- A customer who is as close to your ideal customer as possible.
- A customer who is not demanding but not so much that serving them/him/her is no longer profitable.
The reason is that people like to hang out with people like themselves or people who are better than themselves. So, if you ask for a referral from one of your good customers, chances are that their referrals would turn out to be as good as this customer or at times even better.
For the very same reason, it is not a good idea to ask for referrals from customers who are not profitable to serve or don’t pay on time or pose any other challenge as their referrals might end up being the same way.
When to ask for referrals:
- It is a good idea to ask for referrals at certain touch points and avoid asking for referrals at certain other touch points.
- Just before you close a sale with them. There is always some paperwork that needs to be done to close the deal. It is a good idea for you to ask for referrals while the paperwork is done. They are feeling good about the purchase and are most open to provide referrals during this time.
- Immediately after they have used the product or service. If your product requires implementation, then immediately after they complete the implementation and their go-live, as long as the go-live went as per plan. This is a time when they will be most open to giving referrals.
- A few days after your support team resolved an issue for your customer and did it well.
- A few days after you have done them a favour of any sorts (could be connecting to someone they have been wanting to be connected or shared a lead for their business or any other such thing). Not immediately after but a few days later.
- At the start of a quarter or month. At the start of the quarter, you can reach out to all your customers saying that you could use a bit of help from your customers as you are building up a list of prospective businesses that you want to engage with.
When not to ask for a referral:
- Immediately after closing a deal.
- Immediately after you help them out in one way or other
- After an escalation
How to ask for a referral:
What I have seen work really well is being upfront and honest. Ask them for a favour. Tell them that they are a very valuable customer who has benefitted from their product or service. So, it would be great if they could refer their friends or business just like themselves or their customers, {who might benefit from your product/service as well} so that you can serve them as well.
The order of preference:
- Ask them to call the reference and tell them that they would connect you to the prospect and that they should meet you when possible. They should also tell them they are your customers and have been happy with your product/service
- Then Ask them to email their reference copying you on the email. You need to make it really easy by sharing a template that they can use to introduce you to their friends.
- If the above is not possible, ask them to share the email/phone number of the prospect and take their permission to tell the prospect that the customer gave you their contact and asked to get in touch. Then do so, when reaching out to the prospect.
- If none of this is possible, it might be a good idea to just take the contact and do a cold call. In that case, you should tell the prospect that as you are able to add value to the referring customer, you think that you will be able to add value to them as well. So, would it be possible to get some time to pitch your product or service?
What to do post a referral:
It is not enough to ask for a referral. It is critically important that you go back and update your customer who gave the referral what happened with their referral.
- If you close a sale with the referral, go ahead and send a thank you card or a bouquet of flowers or anything else that shows gratitude. This is a good time to ask for another referral.
- If you didn’t close a sale, go ahead and still send a thank you note with a short note about what happened. This is a good time for you to ask for another referral.
- If it takes too long to close a sale, keep them updated on the progress you are having with the reference.
In conclusion:
Once we are able to close a referral deal, go back and repeat the same process with the new customer. When done effectively, it continues to improve our pipeline and at the same time keeps an ongoing engagement with our current customers. Research shows that if someone helps you once, there is a good chance that they will continue to help you as long as you don’t break their trust.
