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Want to deeply ‘get’ referral marketing, and the incredible profits at very little cost that it can bring?

Then this post is for you.

Ever since I heard Paul McCord crack-the-whip on a poorly attended teleseminar I was solidly impressed.

I’ve been watching out for something that really demonstrates this guy’s credentials, and this is it. An excerpt from his first book, an Amazon and Barnes & Noble bestseller, “Creating a Million Dollar a Year Sales Income: Sales Success Through Client Referrals”.

Every paragraph is dangerously necessary…

Asking For Referrals–Don’t Be Mislead by Misguided Trainers

By Paul McCord

Take a look at some of the current literature and training on referrals and you’re bound to walk away confused and frustrated. One trainer tells you not to ask for referrals because it signals to your client that you’re weak and can’t find business on your own. Another tells you that referrals are your ‘right’ and your clients have no right to withhold them from you. Another says that when you ask for referrals you’re offending your client and that instead of asking clients for referrals, you should be exchanging referrals with other salespeople like trading cards. Another one tells you that in order to get referrals you must give the client a reward, the bigger, the better. Many others say the ’secret’ to getting referrals is just to ask.

So, who’s right? Are referrals a sign of weakness? Are your relationships with your clients commodities to be traded on the open market? Are referrals your God given right? Do you really have to bribe a client to get referrals? Or is simply asking the magic formula?

Misguided Referral Training

In a sense they’re all right. If one doesn’t know how to initiate and develop a relationship with clients that result in the client willingly giving a large number of high quality referrals then maybe you are offending the client when you ask; maybe you do have to bribe them in order to get referrals; maybe your relationship is nothing but a commodity; maybe you do feel you have to go in with the attitude that it’s “my right and by gosh you’re going to give me referrals.”

According to one trainer, asking for referrals can kill your credibility by making you “just like every other salesperson.” Instead of asking for referrals, one should be different and professional, giving great service and waiting for your clients to spread the word for you. Talk about having no clue as to how to generate referrals.

First, this trainer has left the realm of referrals and has gone into the realm of word of mouth marketing — a not uncommon confusion of the two very different marketing formats. [Editor:- Okay, I think of referrals as a sub-category of word of mouth, but enough of semantic quibbles.] Secondly, no matter how great you are at providing superior service, how often have you gotten unsolicited referrals? The dozens and dozens of top producers I’ve worked with believe they can reasonably rely on maybe a half dozen unsolicited referrals a year. Now that puts a real dent in their production.

According to another training company, you should be asking for referrals virtually every time you speak with your prospects and clients–and you should be asking because referrals are your right. They advise you begin asking for referrals from your first meeting with the prospect and ask for them before you make any presentation. You have a right to ask for referrals and your prospect has no right to withhold them, so ask for them right up front, ask forcefully–and insist they give them. As with the advice above, they seem have no clue as to the psychology of referrals. They appear to believe that salespeople are God’s gift to consumers and therefore have extraordinary rights simply because they have a business card that says they’re a salesperson.

Referrals are NOT a right.

Referrals are EARNED and you cannot earn a referral the second you meet a prospect. The client has the right to give or not give referrals; you have no right to expect them.

Referrals are earned by doing exactly what you have promised your client, not by demanding them, not by expecting them, not by simply existing and standing in front of a prospect or client.

Many advocate using incentives to get referrals, but often the incentives they speak of aren’t really incentives but are instead bribes. The theory is that people ‘love to give referrals’ and that giving an incentive simply makes giving referrals that much easier and ‘fun.’ Some advocate gift cards of anywhere from $25 to $100 or more, others a percentage of the sales price, and others free merchandise and/or service, often the incentive is outlandish–and the bigger the incentive, the more referrals you’ll get and if you get enough referrals, the incentive will have been worth it.

The first problem with this advice is that people don’t ‘love giving referrals.’ Most clients hate giving referrals–unless they fully understand why they are giving the referral, why giving referrals are in their own best interest, and that the person they give the referral to has objectively earned the referral. Clients don’t give referrals because they like you, respect you, or even because you did a good job. They give referrals because giving referrals is in their best interest–and if you have to bribe them to give referrals, you haven’t earned them. And if you haven’t earned them, no matter the size of the bribe you give, you won’t get high quality referrals.

Secondly, clients may well question your professionalism and your ethics if you must result to bribing them for referrals. Clients make a number of assumptions about salespeople. One is that a successful salesperson doesn’t have to bribe people for business. If they believe that is what you are trying to do, you lose their respect and once you lose their respect, they won’t be referring you to the best prospects they know.

If you use an incentive, it must be small in price, highly personal in the sense that it is something just for them, and it must not appear in any way, shape, or form to be a bribe.

There are sites on the internet that try to turn referrals into trading commodities between salespeople. These of course aren’t referrals; they’re simply exchanging information between salespeople about who to contact within a company. These commodity trades can certainly be valuable, but they are a far cry from a referral. According to the blog on one company’s website, customers don’t have the proper ‘DNA’ to give referrals. A client’s only value is in being a reference, not in giving referrals.

As with the others, it simply demonstrates a lack of understanding of what a referral is and how to generate a quality referral. Again, I think the service these companies provide is valuable for the right salespeople, but confusing a referral with a name trade is a disservice to the salespeople engaging in their service. Salespeople can use both quite successfully. No matter how hard I try, I simply cannot get referred into every company that I would like to speak to. A service such as this can help me do that–but having a direct referral into the company is a far better alternative, if I can get it.

Finally, there are the hundreds of sales trainers giving the worn out advice to simply “do a good job and ask for referrals.” This is the way referral generation has been taught for decades simply because the trainers didn’t know a better way of referral generation. Unfortunately, it has been demonstrated that just doing a good job and asking doesn’t work. Thousands upon thousands of salespeople have tried the do a good job and ask for referrals method and have met with dismal results–very often to the point they simply give up asking. In fact, the failure of this method is a major contributor to the misunderstanding of referrals that has resulted in the unfortunate advice given by the trainers above.

Why These Training Methods Fail

To understand how to get referrals, you must first understand why the typical referral training doesn’t work. Understanding what doesn’t work will lead you to understand what does work.

Most referral training is nothing more than a variation of ‘do a good job and ask for referrals.’ Referrals are still an afterthought, a last second question often asked as the salesperson is literally walking out the door. There may be a little twist to it such as offer an ‘incentive’ (read bribe), or ask every time you see a prospect or client because they owe you referrals, or help your client by defining for them who a good
prospect is.

The standard referral training creates more problems than it solves. It does solve one problem–it has you ask for referrals. But it creates these problems:

• Asking without first introducing the topic of referrals and allowing the client to become comfortable with the concept takes the client by surprise–it’s an unexpected and unwelcome request.
• It puts your client on the spot. The client is expected to come up with quality referrals in the course of 10 or 15 seconds–an unreasonable expectation.
• It doesn’t define for the client who a good referral is (although as we’ve seen, at least a few trainers understand this is an issue.)
• It ignores the psychology of the client–that client’s are human and humans typically do things because they see doing them to be in their best interests, and simply asking for referrals doesn’t give the client a reason to give them.
• It further ignores the psychology of referrals by ignoring the fact that when a client gives a referral they are putting their credibility on the line with the prospect they refer. Consequently, they won’t give quality referrals unless they KNOW they will not be embarrassed in front of the prospect. They must have an objective way to determine if you’ve earned the referrals.
• It doesn’t make giving referrals easy for the client–it makes them do all the work.

Is it any wonder most salespeople don’t get many quality referrals? The process they’ve been taught actually discourages clients and prospects from giving referrals. If one wanted to develop a system designed to NOT get referrals, they couldn’t come up with a better system than the one most salespeople have been taught.

Almost every one of the training mistakes above can be traced to the standard referral selling process’ failures:

• Losing credibility? Of course, asking unexpected and unwelcome questions that put your client on the spot doesn’t do you any favors with your client.
• Needing a bribe? Certainly, what other reason does the process give for the client to give referrals? None.
• Clients are only good as references? Naturally, when you can’t get a decent referral from them, what else are they good for other than a reference?
• Demand they give referrals because referrals are your right? When the process fails, browbeat your client into giving referrals. That sounds like a winning attitude.

Turn Referrals into a Real Process

If the above advice is wrong, which it is, then how do you get referrals?

If you want to turn your business into a referral-based business, or even if you just want to significantly increase the number and quality of referrals you get from your clients and your prospects, you have to make referrals a real part of your sales process, not just a last second question, a bribe, or a hope for word of mouth marketing. [Editor:- definitely avoid the ‘hope for’ type.]

You have to have a process that:

• Lets your client get comfortable with idea of giving referrals
• Gives the client ample time to think of quality referrals to give
• Defines for the client exactly who a quality prospect for you is
• Gives the client a real reason as to why giving you referrals is in their own best interests
• Gives the client an objective way to determine if you’ve really earned the referrals
• Makes giving a large number of high quality referrals easy

Referrals are not a last minute, off the cuff question to ambush your client with as you’re walking out the door. Instead, true referral selling involves taking the time to work with your client to get them comfortable, to get them educated, to show them why giving referrals is in their best interests, and to allow them to objectively determine if you have earned their trust and their referrals–and then to make it so easy for the them that they freely give 5, 6, 7 or more high quality referrals.

A referral process introduces you to the client as a referral-based salesperson. It leads them though the process, step-by-step to prepare them to give high quality referrals. It gets their verbal agreement to give you a large number of high quality referrals. It defines for them exactly how you will earn their referrals. And then you do the work for them, making it easy for them to give you a large number of high quality referrals.

Like anything else in sales, learning to generate a large number of high quality referrals isn’t magic; it’s learning and perfecting a real process. It takes time, energy, and honing of skills.

——-

Paul asked me for feedback ahead of the publication on his second book, “SuperStar Selling: 12 Keys to Becoming a Sales SuperStar” which was released earlier this year, and just as I had discovered in his teleseminar, he has much more to teach.

Along with some more specific comments and something for his publisher to bash into a proper “testimonial” I also said this…

“Realism is a scary thing to put in a book Paul.”

Paul’s sales training website is at www.powerreferralselling.com, and he runs two blogs at http://salesandmanagementblog.com and http://themanagementcurve.com

If you are a salesman or managing sales people, and you haven’t at least got something of Paul’s in your collection then you’re missing out big time.

If the excerpt above hasn’t proven this to you then I don’t know what will.

I don’t ever dedicate so much of my blog to one item lightly.

-Martin Russell

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