Improve Your sales by Asking for Referrals

We all know that if a client refers us to one of his associates or friends, we have a much higher probability of making a sale and doing business with that referral than if we had no introduction. In fact, it is up to 10 times easier to sell to a referral than to a cold call.

How do you get a large number of qualified referrals? Most people do not volunteer referrals, so the key is to ask for them correctly. Here is a 3-step method that has worked well for me:

1. Thank the client for his time.

“Mr. Smith, thank you for your time today. I look forward to talking with you again soon.”

Saying “thank you” is not only common courtesy, it makes people feel good.

2. Ask for his help

“Before I go, I wonder if you could help me?”

This is a very low key and friendly approach. Most of us don’t mind doing small favours for people if they ask politely and it doesn’t take a lot of our time.

3. Ask correctly.

There are effective and ineffective ways to ask for referrals. An ineffective way is to ask a yes/no question.

Example:

“Do you know anyone else who could be interested in this particular product or service?”

This question can be answered “yes” or “no” – and it’s often easier for the person to pick “no.”

Think of the number of times you have walked into a retail shop and have been asked, “Can I help you?” only to reply, “No thanks, just looking” … without even thinking!

A much more effective way to ask for referrals is to start your question with the word “who.”

Example:

“Who are two or three people you know who may be interested in this product or service?” Followed with “Who would you suggest I talk with?”

When you start a question with the word “who,” it is very difficult to get a yes/no answer.

Another tip: Give the person you are talking to the choice of giving you two or three names – not one or two. When given a choice, it’s surprising how often people will go with the lower number you give them.

Example:

I had an amusing experience when I was selling sales training programs a few years ago.

I used to make it a habit to ask for “one or two” referrals.

“Who are one or two sales managers you know who may be interested in looking at some ideas to increase sales? Who would you suggest I talk with?”

I measured the success of this referral system by asking 100 people I spoke with these questions. I found that some gave me one referral, some gave me two, and some gave me none. I ended up with approximately 100 referrals – an average of roughly one referral per person, the lower number of the two choices I gave them (one or two).

A few months later, I asked another 100 people basically the same questions. But instead of asking for one or two referrals, I asked for two or three.

“Who are two or three sales managers you know who may be interested in looking at some ideas to increase sales? Who would you  suggest I talk with?”

This time, I got appropriately 200 referrals – an average of two referrals from each person I asked. Again, some gave me none or one – but some gave me two or three or more. Yet I still averaged out at two per person, or the lower number of the two choices I gave them (two or three).

I then did a small test. For one month, I asked everybody I spoke with the same referral questions – but changed the numbers to seven or eight.

“Who are seven or eight sales managers you know who may be interested in looking at some ideas to increase sales? Who would you suggest I talk with?”

That month, I received over 415 qualified referrals who I could talk to about sales training programs. I actually had more prospects than I could handle, and had to give quite a few of them to other salespeople on my team.

One more thing to keep in mind about asking for referrals: You do not know who the person you are talking to could potentially refer you to. Plus, you can often get referrals from people who never buy from you themselves.

Example:

When I sold sales training programs, I was in contact for several years with a very successful businessperson. This person never spent one dollar on my services, even though he could have benefited greatly if he had. However, during the time I stayed in touch with him, he gave me over 50 referrals to other businesspeople who could use my sales training services. And many of those referrals became clients.

Referrals are a wonderful way to increase your sales. All you have to do is invest a small amount of your time and get good at asking for them.