The use of referrals is one of the most powerful but underutilized prospecting techniques. Referrals generally provide qualified prospects who have a need for your product or service, the authority to make the purchase decision, and the ability to pay.

Referrals, can come to you through a customer, friend or even a prospect who did not buy but felt good about you and your product. The factor that makes this prospecting method so valuable is its leverage. Until the proper time to use that leverage arrives, a referral is just a lead like any other. When you have qualified a referred lead by securing all the information needed to show that this person fits the pattern of prospects you call upon, you are ready to use this valuable leverage.

Those who provide referrals should be willing either to make an initial contact for you or to allow you to use their names. Referrals work because people are naturally fearful or skeptical of strangers; especially those who try to persuade them to make some kind of decision. People accept you and your product more readily if someone they know and respect has sent you to see them. Get as many referrals as possible.

Salespeople do not have more referrals because they don’t ask. The fear of rejection is probably the reason salespeople avoid asking for referrals. One way to overcome the fear of rejection is to make asking for referrals a part of every sales presentation. When you believe in the product or service you sell, you should feel that you have done your customers a favor by introducing them to it. Offer your customers the opportunity to do their associates the favor of introducing them to you and your product or service.

You may want to design a simple referral form to record important information provided to you by your referrals. These can be formally printed cards or just a form you fill out from verbal reporting.

The form should include the correctly spelled name of the prospect, appropriate business or home address and telephone number, best day and time to call, relationship to referral, and any other necessary qualifying information. You may ask about the prospect’s hobbies or sports interest to break the ice.

When you can’t get the referral source to contact the prospect directly for you, ask the source to sign a simple introduction card or even your own business card. Remember that without the referral source’s open support, you really have just a name, not really a referral.

There are two reasons why people do not immediately give you referrals. The first is that they may find it difficult to think of names to give you. Basically, they just do not want to exert the mental effort to decide who might be interested. Help customers focus on specific qualities you would like to find in a prospect.

Some general questions are: Who do you know who owns a business? Who is one of your neighbors whose lifestyle is similar to yours? Who is in a similar business to yours? Who are some of your suppliers who might use my product or service? Who among your clients could use my product or service? Design other questions applicable to your own product that can help your client zero in on people you should see.

The second reason why people do not give you names is that they consider themselves “conscientious objectors;” that is, they say they just do not give referrals. This can be handled with a softening statement: “I can understand how you feel.” Then go on to ask for a referral from another point of view that makes the client feel comfortable about giving you names: “I’m not asking you to recommend me or my product. I am merely asking you to give me an introduction to some people you know. I will talk with them, as I have with you, in a professional manner and give them an opportunity to learn about my product.” Then ask the same type of questions you asked of the person who could not think of any names to give you.

Once you have received some names, make a first step toward qualifying these new prospects. Ask your client, “If you were in my place, who would you contact first?” Ask why. Then find out which one to call on next. Be sure to ask your customer to sign the referral card that you will later use.

Another way to use the power of a referral is to ask clients to call the people whose names they have given you and set up an appointment. If a telephone call is inconvenient, ask for a note on the back of the client’s business card. Mail the card with your own brief note, and follow up with a call requesting an interview.

Make asking for referrals a part of the presentation cycle. The best time to ask for referrals is usually right after the close. A customer who buys is sold on you and likely to feel good about giving you names.

Sometimes, however, a customer wants to use the product or service before giving any referrals. When the customer expresses this feeling, set a specific time (a week or month later) to call back and ask for referrals. Whenever you receive referrals, be sure to report to the client on the result of your interviews with these prospects. If you can report that some of these people bought your product or service, the customer may be willing to give you additional names. If your report is negative, explain why the prospect’s current situation made it impossible to buy. Be sure to thank the client for giving you referrals whether they buy or not.

One last piece of advice. Remember the Golden Rule. If you have established a good relationship with your client and you feel his product or service is good, then tell appropriate people among your own customer base and your personal friends. This type of value-added thoughtfulness will make you stand out even further and enhance your client’s loyalty to you.

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