Among the many challenges that salespeople and managers in the commercial area face on a daily basis, acquiring new customers is one of the main ones.
To get new customers, they use the most different means, but often end up neglecting one of the best – the referrals.
So, today we are going to talk about the importance and how to work the referrals by the Sales area.
What is an indication in Sales?
Every salesperson should know what an indication is, but here the question is not to answer this question, but to differentiate a situation.
Although it is closely related to Referral Marketing or, if you prefer, Referral Marketing, it is not the set of actions and policies that the company adopts to encourage this behavior in its customers, but the premeditated act and as an integral part of the actions of the salesperson, which we will address.
In other words, it is the explicit request that the Sales professional makes, whether or not the company has a policy in place.
When there is something on the part of the company, logically its work is facilitated. When not, it is the seller going beyond the steps considered as part of the selling process.
It is your request for the customer to give you a name among his acquaintances, to present him the same product / service.
The main difference lies in the fact that, as a company policy, the seller is most of the time a passive agent and in the situation that interests us, he becomes an active agent and , therefore, responsible for the actions and results.
Why is it important to ask in sales referrals?
It is a fact that among all that Joe Girard to be considered the biggest car salesman in the world in a year, by the Guinness Book of Records, the indications he asked for, figured as one of his differentials as a Sales professional.
Girard paid from the his own pocket to customers who referred other potential customers, regardless of whether the resulting sales materialized or not, because in practice he had found that the gain it was rewarding.
Since the time he achieved the feat – between 1963 and 1978 – and nowadays, a lot has changed and so much due to the emergence of the Internet, affecting in a decisive way the forms of consumption, as for new needs and desires, the power of the indication remains undeniable.
Among everything you consume today, from the restaurants you frequent, going through the movies you’ve watched and books you’ve read, the brands that you put in your shopping cart at the supermarket and a lot of other things, how many are the result of a compliment, a comment in the circle of friends, or even because you saw a video of a digital influencer?
Even without realizing it or knowing it consciously, every company has already sold by referral at some time – or many – times and, therefore, every consumer has also bought by referral.
Your friend returns from vacation and after telling you everything what he did in the period, praises a hotel in which he stayed. He tells every detail of the personalized service he received, the facilities and the privileged location. He also talks about how much the family enjoyed it and that if one day he returns, he intends to stay there again.
This is the result of a real experience and not of the Marketing done by an “unknown”, in the your company.
In practical terms, the advantages are many:
- Confidence – in general, people look for security in the choices they make and part of the process of establishing trust in a company involves knowing what those who have already had experiences with the company think. If even Google reviews are useful and they are made by strangers, what influence does one have coming from a friend or relative;
- Prospecting – Prospecting in Sales is much easier, as many of the steps that are necessary to get the leads that will feed the pipeline or sales funnel are skipped. Think about everything that is done to get good names and that through the indication comes as a result and a sale;
- Cost – the cost of customer acquisition, which involves everything that is spent (advertising, marketing, listings, etc.) to feed the funnel to the exit of a customer constituted at the other end, can be much lower. Even when you pay for it, as in the case of Joe Girard;
- Time – everything we’ve mentioned so far here, it takes time, but through an indication, you already have a prospect and they often enter the pipeline at a more advanced stage, skipping steps in the process. Put another way, at about the same time you made a sale, you already have another good name to work with;
- Objections – as a consequence of all the above aspects, there is a natural tendency for there to be fewer objections to be dealt with and which in turn contribute to greater conversion and less time consumption.
Why don’t sellers ask for referrals?
This one is for you, the manager responsible for a team of salespeople. If it’s so good and makes it so easy, why aren’t salespeople in the habit of asking for referrals?
There are several possible reasons and it’s critical to properly identify them.
- If the quality of service, the quality of products / services, the after-sales, communication, or relationship do not work as intended, or in the worst cases If there are none, the seller will not feel comfortable asking for an indication;
- Direct consequence of the above factor, if the seller is not convinced of the effectiveness of his work and of what the company offers, he also does not feel comfortable making the request;
- We don’t know the best time to ask, either because it may seem artificial, because we are not used to it, or because we lack experience in doing so;
- They are suspicious of their efficiency and the return they can have, either because no one has shown them by presenting the facts and the corresponding figures , either because they were not successful in the few attempts they made;
- They don’t know how to do it and/or they don’t have the tools that give them the support to include them in their routine, such as a CRM software;
- The seller is not, but he is a seller and therefore he does not have the profile and consequently the hard and soft skills that is expected of one, being more difficult for him and sometimes not even having the motivation so necessary for his good performance;
- The company’s policies or its business model make it difficult for personal initiatives or even prevent them in some cases, as in the case of large retail chains.
It is important to highlight that it is possible to request indications even when not linked to a permanent policy of the company, provided that the above factors do not present themselves as insurmountable barriers to such a practice.
How to get referrals in Sales?
If you are one of the many who were convinced that referrals are an important instrument for increasing sales, we have finally reached the point you were looking forward to.
Making the request for referrals something common and consolidated in your routines, should be the result of not one or two, but many actions that are dependent, starting with the NPS (Net Promoter Score) and which is an indicator of how willing customers are to recommend your company to a friend or relative.
More than a thermometer of this disposition, it is a reflection of everything the company has done in relation to the customer and how their perception of it is.
Your company does not have to be that that has the most satisfied customers in its segment, as long as it knows how to identify who are those with the highest level of satisfaction and you automatically know who are likely to indicate.
But as far as that satisfaction levels drop and consequently the NPS goes from the quality zone down , the indication numbers go in the same direction. And as we have seen, it ends up being a reason for salespeople to stop asking for them.
More than that, below certain thresholds, the issue is no longer getting new customers, but working to reduce the loss of customers, otherwise the number of new ones will not be enough to compensate for the departing ones, among other resulting problems.
Once the company does its part and, therefore, there is an enabling environment, there is maintenance of the customer base, with a good digital reputation and good NPS, instituting the request for referrals consists of:
- Find the ideal time to request and that depending on what is sold, it does not necessarily have to be after closing. In some cases, predominantly in the first sale of consumer durables, it may be after some time of enjoyment of the product by the customer, in a post-sales contact aiming to measure their satisfaction;
- In the provision of services, the same observation above applies, that is, the moment of the request must be after the customer has at least partially enjoyed what he purchased, as is the case of the sale of papers. In other cases, as in the example given by the hotel, at check-out;
- indicators and targets for prospecting, establishing them for the number of indications, is important, both to measure the results, and to be a means of institutionalizing the practice;
- When investing in customer relationship actions, it ends up being more natural and organic to ask for referrals;
- Tools – such as the aforementioned CRM – and reports, help to have more accurate information and stop relying only on the mind and can draw a more detailed, more specific profile, as well as gathers data on customer behavior and purchase history, facilitating the planning of the approach of the nominees;
- The trainings are a necessity to present methods and approaches to the less experienced and those who do not have the established habit.
Conclusion
The request for indications by the seller is one of the most important instruments to increase sales and should be part of the seller’s routine.
