How to Use Referrals
It's Carl's sixteenth cold call. He's had fifteen rejections in a row. "There must be a better way," he says to himself. "I might as well be calling right out of the telephone book." As he dials, his secret hope is that he'll get either a busy signal or no answer. He wonders if there's a job that doesn't create so much emotional distress. There has to be a better way!
If you're still making cold calls to get business, you undoubtedly don't enjoy it. There is a better way. Learn how to use referrals. You've probably heard these often-used excuses for not getting referrals: "If my client really wanted to give me a referral, he would have offered it," or, "If my work was really outstanding, I would be inundated with referrals." How about this reluctant thought: "When it gets down to the point of asking for a referral, I lose my nerve. I just don't feel comfortable asking my clients for leads." The truth is that your clients think you are already extremely successful. You project this image as you sell yourself. As a client once said, "I was shocked when my mortgage broker asked me for a referral. I never before realized he wanted or needed them."
Many salespeople use effective referral-generating techniques. Some, like Dennis Renter, a Newport Beach, California financial planner, hand out cards to clients offering free estate evaluations for clients to give to their friends.
Ron is a mortgage broker who moved from Salt Lake City, Utah to San Jose, California where he had no clients, no prospects, and no business. His "mind-set philosophy" conveys a message parallel to, "Give a man a fish and he will eat for a day; teach a man to fish and he will eat for a lifetime." His attitude dictates, "If I make a sale, I eat for a day; if I get referrals, I will eat for a lifetime."
Ron's technique focuses on asking for referrals during the closing process. At the point Ron closes the prospect, he takes an application from his briefcase and explains that he needs some information. He admitted to me that he usually has enough details already to fill out the app, but the request sets the stage for gaining referrals. When he's working with a married couple, he usually asks the husband to answer selective details, and then gives the wife a piece of paper and a pen. He asks, "Would you please fill this out listing four or five people you know who might be thinking about moving in the near future, would like to save some money on their next mortgage, and might benefit from my help." Ron then turns back to the husband and completes the details.
WHOM TO REFER
Ron has often been interrupted by the spouse asking, "Exactly who do I put down?" He replies, "Just four or five people you know socially or professionally with good common sense, are thinking about moving in the near future, would like to save some money on their next mortgage, and might benefit from my help." Ron usually receives three or four names. His closing average of 85 percent on referrals is probably due to prompting even the most reluctant clients for referrals. He softens his close by explaining how he will deal with the names. For instance, Ron may state, "I want to meet with people like yourselves so that I can share some ideas on
how to save money on their next mortgage. I will respect the fact that you are friends and there won't be any high pressure. I will strive to help them in much the same way as I have helped you."
FIVE STEPS TO GAINING REFERRALS
Some general rules in asking for referrals are:
- Tell your clients why you want them.
- Mention that you will respect their relationship with the referral, as well as the referring client's financial privacy.
- Be specific. Instead of requesting "a few names," ask for five referrals. You are much more likely to get what you ask for when you give an exact number.
- Learn something about each referral's personal life. Does she play tennis? Is his hobby interior design? You will be able to develop a high level of trust and rapport by initially saying, "Jan tells me you're quite a tennis player." Using personal knowledge like this will also position you as a friend of a friend. It will make it very difficult for a prospect to say no to an appointment request.
- Ask for the referral before the closing paper work is done. Have you noticed how quickly busy customers want to get back to their office or home after business has been completed? If they sense that giving you referrals is part of the sales process, they'll give you more qualified names.
I recently received a referral to a real estate company executive who was in charge of booking speakers for his annual convention. I knew he had a new baby approximately the same age as mine. We talked about how special little girls are and how loving each of our daughters are. Fifteen minutes later, he booked me for his company's convention. I may have gained the business engagement without knowing about his new baby, but five minutes of personal conversation about a mutual interest helped develop trust more rapidly than two weeks of face-to-face meetings. Using these five steps will help you get at least eight appointments for every ten referrals.
A great salesperson is extremely effective at cold calling but never has to take that route. Instead, use the referral-generating technique of keeping yourself memorable in your client's mind. Joe Gerard, the Guinness Book of World Records "Best Salesman on Earth," reports that everyone has at least 250 friends and acquaintances. Obviously, your client is able to give you more than five referrals!
Ron Howard uses another effective device for gathering referrals. He asks his clients to hand him their personal telephone book. Ron then turns the book to "H" and writes in "Ron Howard" and his telephone number. He also turns to "F" for Financial services and writes in the name of his company, Investors Financial services, with his name and phone number. Ron reports the average client will refer another twenty to thirty of his friends and acquaintances using this method. He has even been called from cocktail parties by clients who want him to schedule an appointment with their "good buddy" (they just met).
Often, salespeople have difficulty conducting a yearly review with existing clients. But think what you could gain by providing that service. You guessed it - five new solid referrals. Ask the question of your clients, "Do you know anybody I should meet?" Then move again into your
qualification statement: "I would like the names of any social or professional people you know who can save money, have good common sense, and might wish to invest."
THE FINAL SCENARIO
As Carl dialed the telephone, he kept thinking about his client. The client told Carl that the referral was an avid golfer. Carl was just learning the game. The referral owned his own business and was a homeowner and progressive thinker. Carl made the call. He mentioned his client's name. The referral answered, "Yes, he told me you would be calling. I've been looking forward to talking with you." Carl smiled.
The following is a script you might find useful in following up with your new referrals. Use this as a foundation, then work your own style into the model. Let it serve simply as a guideline, not to be read, but rather to be conceptually followed.
Hello. Is this Mr. Jones? (Referral name), my name is (your name). I am with (company name). I spent some time with a mutual friend recently (client's first and last name). Do you remember him?
He tells me you (personal touch - background, hobby) are a great tennis player. Is that true? (Allow enough time to elicit rapport).
I've had the opportunity to share an interesting idea with (client's name) that he found very exciting. In fact, he was so interested that he and I were able to save him tens of thousands of dollars in costs. He gave me your name and thought you might be interested also. Of course, I have no way of knowing if it would be of benefit to you, but (clients' name) did recommend that I call you to set up a time when we could talk and share a few ideas. Did (client's name) tell you I would be calling? (Yes, No) "How about Tuesday at 3 p.m. or is 4:30 p.m. best for you?"
Do you have thirty minutes later this week when we could get together? Or (for appointment close): I'll be in your neighborhood Wednesday at about 4 p.m. Are you free then?
Referrals are not like old wine and aged cheese. They do not improve with time. CALL REFERRALS WITHIN 48 HOURS. The first person to ask about your referral progress with will be your referring client. If he knows you pursued his lead, you are likely to get other names. If he thinks otherwise, gaining more referrals from him will be tougher than arm-wrestling a grizzly. Also, remember to copy your first letter of correspondence to the client who gave you the referral. He might help sell you with a telephone call. It is very important to get your client involved in prospecting. You might, in fact, gain 5 percent more business just by virtue of letting your client know that you've actually contacted the leads he gave you.
Your clients will be your best source of business. All you need to do is ask them to refer you. But more importantly, let them know that you didn't just take the leads and throw them in your briefcase. Your clients want to see you become successful. They want to see you become wealthy. Let them know that you are appreciative and that you have followed up on the leads they gave you. They will give you many more in the months and years to come.
Dr. Kerry Johnson is a frequent speaker at Financial Services conferences around the world on topics like How to Read Your Clients Mind, Marketing to the Affluent, and, Peak Performance: How to Increase Your Business By 70% in 8 Weeks. In fact his his personal coaching company, Peak Performance Coaching guarantees a 70% increase in business in 8 weeks. He is also the author of 6 books including "Mastering the Game, and his newest book Willpower: The Secrets of Self Discipline." To receive a free subscription to his monthly newsletter, "The Winning Edge- Online, subscribe on his web site at www.KerryJohnson.com or call 800-883-8787.