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Increasing Sales

Does Referral Selling Work?

On LinkedIn, a business owner asked, “Is business growth through referrals possible?” He further explained, “In B2B, is it possible to actively, and positively encourage client referrals?” He continued, “I’m not talking about just doing a good job and waiting for our client to sing our praises – No – this is a question about whether it is possible to “push” our clients to refer (referral selling). Is it doable, and how???”

I jumped all over that question. I love it when someone’s looking for a better way to generate business, and I have the answer. Yes, it is doable, and you can use the referral system laid out by Joanne Black in her book No More Cold Calling.  

After seeing Joanne speak and reading her book, I was sold.  She’s been carrying the flag of ONLY referral selling for over ten years, and I have jumped on board. I must admit that I had resisted the book for many years; after all, I’ve made a nice living using my cold-calling skills.

I used to think, “Who is she to say no more cold calling?” I was resisting because I didn’t want to change. You know, if it isn’t broken, don’t fix it.

A horse-drawn carriage still works as transportation, but it doesn’t mean we should keep using them. Just as the horse and carriage don’t make sense today, having quality sales reps cold calling doesn’t. I’m not saying cold calling can’t work, but in this information age, the higher quality customers and clients are not picking up or reading what’s being sent. 

Joanne’s system and approach are simple enough for anyone to implement but not necessarily easy, which explains why most salespeople don’t. There are no gimmicks, tricks, or slick lines to increase referrals, but there are better times and better ways to ask for referrals.

In addition, the book addresses reasons why salespeople don’t ask or receive referrals as often as they can and provides perspectives to motivate change.

The business owner who asked the LinkedIn question was looking for more than doing a good job and waiting for clients to refer others. In his words, he wants to know how to “push” his clients to refer. This program will not teach you how to push others, but it is about being proactive in your referral efforts, which leads to more referrals.

Joanne has plenty of resources on her website If referral selling strikes a chord with you, I encourage you to order her book. 

Referrals – The Ultimate Sales Profession Validation

Referrals are the number one desired source of leads. They have the highest closing ratio and profit margin, but it tends to be an area neglected by most salespeople. The focus is usually put on pleasing the customer or building a relationship in hopes of a referral introduction being made someday, and some days they do, but could there have been more? 

We all get a few this way, but if you work a referral system you will realize many more leads than simply waiting for someone to ask your customer, “Do you know a ______ company or person? Cold calling and working a referral system both require hard work. Why work so hard at cold calling when you can work on referrals? 

The following business reasoning behind referral selling is too compelling to ignore:

  • Reduced marketing costs from traditional direct cold marketing approaches.
  • Shortening of the sales cycle, as referred prospects already trust you.
  • Improved profitability as you focus referrals on preferred or ideal clients/customers
  • Service-minded salespeople representing the company and building trust. Referral selling doesn’t work any other way.
  • Internal cross-selling increases as part of the system.

With all that said, those willing to put in the work will win more business by spending less time and money.

Key Components to a Referral System

Believe people want to help others 

One roadblock to asking for referrals is our belief that we are imposing or jeopardizing our current relationship with the person we want to ask. In general, the opposite is true. People like helping others when they are presented with the opportunity respectfully and intelligently.

Trust and confidence are the requirements for a good referral 

People do need to feel confident in your product and service as well as trust you as a person to make a quality introduction. They don’t need to be a customer or client to understand your value, but they do need to be educated on that value before they can think of more people they can refer.

Change your definition of what a referral is 

The definition Joanne uses is when someone introduces you to someone else. When done correctly, the person you are introduced to is expecting and looking forward to your call. Anything else is a cold call.

Create a list of your current referral network 

You know a lot of people. Write their names down and build a list. The list can be anyone, and as you work the system, you’ll better define who’s ready to refer you now and those who need to get to know you and your service value a little better.

Identify your ideal referral client 

In order to receive high-quality referrals, you must be able to quickly communicate the exact type of person or business you would want to be referred to. Allow your referrer do some qualifying by knowing who to introduce you to. 

Create an interesting, intriguing, or funny intro when meeting new people

This is used more when you are meeting someone cold and the question of, “What do you do?” comes up. I use these: “I hang out with salespeople all day”, “I am a motivation expert”, or “The best-kept secret in the small business worl.”

Improve when and how you ask for referrals 

The No More Cold Calling Program does a great job at helping you make these improvements. While asking more often is part of the system, how and when you ask is where the magic exists. Tip – find a smooth way to ask when your customer or client is reconnected with what they value about working with you and your company. 

Show your appreciation 

Remember to say thanks for every introduction you receive. Keep people updated as to what happens with those they have introduced.

Where to Find Your Hidden Referrals

Have you run out of people to ask for referrals, or are you going back to the same well too often? I know a place where referrals might exist that most of you have never explored. As with all referrals, they must be earned, so I can’t guarantee some of you will find a treasure, but for others, there’s a bounty waiting to be tapped.

Think of this as a treasure hunt. Before I show you the map, let me help you decide if it’s worth taking this journey because you’ll only find treasure if you’ve earned it with your past efforts and actions.

Are you sea-worthy?             

Before we set sail, I’ll need to check your ship to see if it’s sea-worthy.

  1. Do you have a recognizable sales process that a buyer would enjoy and say was well worth their time going through?
  2. Do most buyers enjoy relating to you? Are you easy to work with?
  3. Do buyers have an enjoyable or valuable experience working through a buying process with you?
  4. Do you have a competitive product/service at a competitive price? (not the low-cost leader but competitive)
  5. Did you demonstrate a true value proposition connected to the buyers’ objectives?

If you answered yes to three or more of the questions, you could proceed. If you had three or more no answers, the chances of referrals waiting for you are slim. You might take this list and make sure you can say yes.

What type of captain are you?

I need to see if you might sink the ship when the seas are rough or if you can roll with what the ocean throws at you. Here’s your test. Would you say yes or no to these statements?

  1. I believe everyone should buy from me, and I should win every deal.
  2. When a decision goes against me, I’m done with that contact and do not need to contact them in the future.
  3. I take it personally when buyers decide against me or make what I see as a “bad” decision.
  4. I will put down a buyer or find fault in them with my teammates if they decide to go with the competition.

Three or more no’s, and you can move on. Two or more yes’ and I am not sure you’ll find treasure. But if you have to find out where it is, keep reading.

Can you navigate in tricky waters?

This referral conversation you’ll engage in is rarely visited due to the tricky navigation to pull it off. If you have a good ship, have passed the captain’s test, and can follow the map I will lay out, the treasure is almost yours. Here is your next test.

  1. Do you often change a proven process to make it a better “fit” for you?
  2. Do you tend to skip a step or two of a proven process in the name of being efficient or creative?
  3. Once you know where the treasure is, will you forget the map and figure out your approach?

Two or three no’s would be the better answers here. Since you have come this far, you can proceed but if you had yes’s to these answers, you could wreck your ship when you are close to the treasure. Good luck.

Where the Treasure Lies

For those that have passed all tests, you will find the treasure you earned with the buyers that went with the competition or did not make a decision to go with you. Yep, that’s right, the people that said NO have a treasure you built with them.

If you sold well and did what was required in having a sea-worthy ship and captained the sales process humbly, you could have a treasure waiting for you. Now can you follow the map?

The Treasure Route

  1. Create a list of your lost deals over the past year or two.
  2. Review the four questions in the sea-worthy ship section to see if you pass with each contact. If you don’t, take them off the list.
  3. Review the list again and check to see how you were as a captain during the process. If you did not pass with any buyer, take them off the list.
  4. Now call your list in the following manner:
  5. Hi _____, it’s _________ from __________.  (short Chit chat) I hope things are going well for you with (the competitor); no hard feelings here. I enjoyed working with you through the process. I had a couple of questions I hoped you could answer. Do you have a minute?
  6. Thanks
  7. I build my business on referrals, and although you did not buy from me, I wanted to ask if you found working with me enjoyable and valuable.
  8. How so? What did you like about me, our company, process or product?
  9. Thank you, I appreciate that. I enjoyed working with you as well.
  10. I would like to be introduced to people in your position who would enjoy working with me during their buying process. I understand there are no guarantees of them doing business with me; there never are. Could you think of one or two people that might enjoy getting to know me and learning about our company in case they will be purchasing our type of solution?
  11. Be quiet and let them think.
  12. If they have one or two people, ask them to tell you more about them. Once you feel they would be a good fit, ask them if they would make an introduction for you.
  13. If they do, you have found some treasure.

Build Lifetime Value Through a Referral Network

We never will know the value of any person we converse with and get to know until their life is over. So how do you increase the lifetime value of each contact you make and develop a valuable referral network? Most professional B2B Sales Managers would suggest:

  1. Don’t care about how much value someone can bring to you, but you do care about how much you can bring to them.
  2. Stop looking at “people” as prospects, suspects, customers, and clients, and see them as people who might be able to use your help.
  3. Never determine the value of a relationship on whether they buy from you. Offer them your best if you win or lose, and maintain a relationship.
  4. Always give to the relationship when you get a chance. This could be as simple as staying in touch with a call, card, or email or sending them information that they can use in their business or life.
  5. Genuinely care. Don’t worry if you are crossing some business/personal line. Caring is always good, if it is recognized or not.
  6. Never burn a bridge, even if one is burnt back to you.
  7. Follow your heart; it is less risky than keeping up with the Joneses.

When you treat people like this, you will be developing a solid referral network. People will want to do business with you.  The system is simple but not easy. If you get stalled developing your system, give us a call.  We’re trained in coaching teams and individuals through the program.





Rene is the President of Sales Manager Now, a company that provides fractional sales management services to small and family-run businesses. He has twenty-seven years of experience in sales leadership, coaching, and consulting. He is also the author of the Part-Time Sales Management handbook and is based in Auburn, California.

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