With so many channels available for sales reps to connect, engage, and nurture relationships with potential buyers, getting sales referrals has become even more critical than before to book more sales appointments and grow the sales pipeline.
But, modern sellers beware! Not all sales or customer referrals are made equal. The key is: to craft the ‘right’ sales referral strategy that will help you generate high quality referral business. Doing so will enable you to get to a conversation faster, with a lot less sales prospecting effort.
According to Harvard Business Review, “84% of B2B buyers are now starting the purchasing process with a referral, and peer recommendations are influencing more than 90% of all B2B buying decisions.” Therefore, it is essential that we focus on how to leverage this channel to get that referral as you never know… Your buyer just might be already asking their peers.
How to Ask for Sales Referrals (3 Ways)
There are three central ways to ask for a sales referral and they are:
- Pick up the phone and ask for an introduction
- Leverage LinkedIn to find a mutual connection or shared connection and ask for an introduction via LinkedIn messaging, or
- Again leverage LinkedIn to find the mutual or shared connection and ask for an introduction via email
What is the best way to do it?
Well if you listened to this podcast with my friend Joanne Black one of the top referral sales experts, she will tell you that you need to pick up the phone. While I agree with every piece of advice she shares on sales referrals, we disagree on the medium by which you can ask.
I believe that option 2 and 3 listed above are just as effective as picking up the phone whereas Joanne disagrees. In fact, many buyers today prefer to know within 15-seconds of reading a short text what exactly you want to accomplish. Most executives that I work with respond to nearly every one of my voicemails with a text message. This has gotten more prevalent now that 50% of workers are working from home.
As such, I’ve recorded a new Digital Sales Referral podcast that really showcases how to go about leveraging email and or LinkedIn premium or LinkedIn Sales Navigator to drive a higher meeting response rate. I encourage you to listen to it here:
Leveraging your LinkedIn profile is a great way to get sales referrals. When you use tools like LinkedIn Sales Navigator, you’re able to see the connections you have in common with a potential lead, so you know whom to reach out to for a referral.
Most sales reps don’t maximize their social networks to get referral business and ultimately miss out on easy sales opportunities. LinkedIn is built on the idea of six degrees of separation which actually means you can connect with anyone in this world through five connections. If this is true, which it is proven to be, then even if you have a few hundred connections on LinkedIn, many of these people you know would be happy to provide an e-introduction to a prospective lead, leveraging their relationship as your mutual connection.
Research shows that 73% of executives prefer to work with salespeople referred by someone they know. So, as you focus on a referral strategy, look to drive referrals from within your network or leverage the connections of those in your organization (often referred to LinkedIn’s Teamlink feature), improving the chance of converting cold leads to warm conversations.
What is the Difference Between a Lead and a Referral?
This is a common question, so let’s clear this up before we jump into how to use the referral strategies in this article.
A lead is a target buyer persona that you pursue, who you generally have no relationship with and may or may not be ready to buy from you. Although they may be interested in what you have to offer, they will need nurturing to get them through the sales cycle.
At times, a lead could also be a target buyer persona that your marketing team has placed into the marketing funnel. This lead could be someone who knows your company and may have previously shown some interest in your company, thought-leadership, products and/or services but is not quite ready to buy yet.
On the other hand, a referral is someone who fits your buyer persona, has been introduced to you by a common connection. They may or may not have expressed interest in your offering, but would likely schedule a sales call without much sales nurturing needed as a result of the sales referral or introduction made between you and them.
The goal – if you can – is to get as many referrals from previous and current customers or mutual connections as you can to build your appointment calendar and sales pipeline with people who will have a higher propensity to buy. That’s why having a customer referral program in place can be a highly effective way to drive continual referrals, so you don’t have to reach out to cold leads. This would reduce your cost of customer acquisition.
Why Sales Referrals Work?
Sales referrals are an incredibly valuable asset for salespeople, providing numerous advantages that have the potential to greatly enhance sales performance. One key reason why sales referrals work so effectively is the trust factor. Prospects are much more inclined to trust the salesperson and the product or service being presented when they are referred by someone they know and trust. This trust can significantly shorten the sales cycle, as the prospect is already predisposed to doing business with the salesperson.
Another reason why sales referrals are so effective is the quality of the leads they generate. Referrals tend to be pre-qualified, meaning that the prospect is likely to have a genuine need for the product or service and the budget to make a purchase, otherwise they wouldn’t take the meeting. This makes the salesperson’s job easier because they deal with leads that are more likely to become customers.
Additionally, sales referrals can help to build stronger relationships with existing customers. By asking for referrals, salespeople are demonstrating to their customers that they value their opinion and trust their judgment. This can lead to increased customer loyalty and repeat business in the future.
Moreover, to advertise a business can serve as a cost-efficient method for generating new leads. In contrast to alternative lead generation techniques like advertising or cold calling, referrals generally incur minimal or no expenses. This means that salespeople can generate new leads without having to invest a significant amount of time or money.
Sales referrals are a highly effective sales strategy for a number of reasons. They can help to build trust with prospects, generate high-quality leads, strengthen relationships with existing customers, and be a cost-effective way to generate new leads. By incorporating sales referrals into their sales strategy, salespeople can significantly boost their sales performance and achieve greater success.
Best Practices for B2B Sales Referrals
The job of generating sales referrals should be shared between sales and marketing. After all, the more word of mouth marketing you can generate, the less you as a seller or your sales team have to spend on cold outreach or prospecting and the more time they can spend on actual fruitful sales conversations! That’s why it’s important to use a host of ways to engage with your satisfied customers to ask for referrals, as often as you can.
Here are four best practices to follow (and build into your customer journey) to get sales referrals around the clock.
1. Provide an Exceptional Customer Experience
A happy customer will be more willing to give a referral or do a sales introduction when they truly enjoy doing business with you. From onboarding your customers to providing support and training – ensure you make every touchpoint as exceptional as possible. Utilizing advanced customer experience software can significantly improve how you achieve this. Not only does this give you an unshakable advantage over your competition, but it builds trust with your satisfied customers to know that any referral they provide will also receive the highest level of customer service.
2. Ask for Success Stories
Customers that have had a positive experience love to share their results with you. However often marketing and sales teams fail to reach out to get these case studies.
As an effective sales manager, you should build at least one touch point in your customer referral process to ask your existing customers about their success. Questions such as, “What metrics have improved as a result of using our product or service?” or “How exactly have you been able to achieve your business goal(s) by using our product or service?”.
By asking these questions, not only does this enable you to connect with customers to ensure they are having a great experience, but it positions your sales and marketing teams to ask for a referral. Or, if nothing else, your sales professionals can use this time to encourage your satisfied customers to leave a review on an online platform such as Google, G2, Yelp, etc.
3. Create a Customer Referral Program
Who doesn’t like to be rewarded? Your satisfied customers sure do love rewards! And, with data telling us that 60% of B2B sales professionals are able to generate higher volumes of qualified leads through referral programs – why wouldn’t you have one in place?
Building in incentives for customers to refer their colleagues or business connections to you is an important part of consistently driving referrals. The reward could be monetary, access to a free upgrade of your service, or some other enticing corporate gift. What’s important is to let your customers know about the referral process, who makes an ideal client referral, and what steps they should follow to be rewarded for their referred customers.
You may choose to give smaller incentives just for an e-introduction to referral versus a larger bonus for when a referred customer generates actual new business. Either way, have your sales and marketing teams clearly communicate your referral program and its benefits as often as they can. Referral tools, like ReferralCandy, can help with this process by allowing you to send invitation emails automatically.
How to Ask for Sales Referrals?
Here, at Vengreso, we follow a two-step digital referral process. Our channel of choice to execute this strategy is LinkedIn (particularly using sales prospecting tools such as LinkedIn Sales Navigator as often as we can).
These are our two steps to building a solid sales referral strategy:
1. Look at your target buyer and assess mutual connections
Look for your ideal buyer persona on LinkedIn. Identify any mutual connections you may share or Teamlink connections if you’re using LinkedIn Sales Navigator. It’s even better if these mutual connections are existing customers that you have a relationship with.
The key with this step is to find mutual connections that you may have the strongest relationship with before you move to step #2: the ask! But even if you don’t have a strong relationship, do not let that stop you.
2. Ask your mutual connections for a “favor”
At this step of the process, you’ll want to reach out to see if there is a possibility of the mutual connection connecting you with your ideal buyer. We always aim to contact at least three people to start this referral process. But there is nothing wrong with sending step-1 of the below referral sales template to all of the mutual connections.
What you’re looking for is the person that says yes to the below template AND has the strongest relationship. The worst that someone can say is “No.”
Here is what that sample referral sales template would look like:
Instructions: Customize the part highlighted in YELLOW and follow step 1.
Hey POTENTIALREFERRERSFIRSTNAME! I hope all is well. In reviewing LinkedIn, I noticed you are directly connected to PROSPECTSFIRSTNAME LASTNAME – INSERT PROSPECTS LINKEDIN URL. I was wondering if you know them well enough that you’d be willing to introduce the two of us? If you do, I will provide you a separate introduction message via LinkedIn or email that you could use to easily make the introduction. I appreciate any insight you may have related to PROSPECTSFIRSTNAME or any help you can offer. Thanks again.
Don’t forget to take this template and set it up in FlyMSG so you can use it anywhere on the web including in email or on LinkedIn.
Suggested FlyCut for FlyMSG.io or mobile device: -pmreferstep1
Suggested FlyMSG Category: Prospecting Messages
If during the first round of contacting the three people you chose you doesn’t don’t get a positive response, then choose a new set of three mutual connections and try again. As mentioned earlier, our Vengreso sellers take the time to ask all mutual connections upfront so as to avoid having to “wait” on three people.
If you’d like to see this step in action I would encourage you to watch this video from our YouTube channel on Maximizing Success with the Digital Sales Referral here:
3. Sales referral template for the mutual connection that said “yes”
The above step is a great way to better understand the relationship between your connection and the B2B buyer you want to be introduced to. If there is a strong enough connection, they will be willing to do an e-introduction for you.
But now comes the important part and that is you found someone who said “yes, I’ll introduce you.” So what do you say next to solidify that sales referral and book another sales meeting?
The second message from our sales referral templates can be found here. Of course you can leverage FlyMSG.io for free to use both of the templates provided.
For more in-depth guidance on the referral process, watch this 20-min video to see the Vengreso two-step Sales Referral Strategy in action. Trust me you won’t regret it:
Who to Ask for Sales Referrals?
When it comes to asking for a sales referral, targeting the right people is crucial. You want to approach individuals who are connected to those you are targeting. Doing so dramatically improves your productivity as a rep.
Target the Right Sales Referrals: Your Existing Customers
One key group to consider is your existing customers. Happy customers are usually willing to recommend your product or service to others. These customers already know and trust your brand, making them ideal candidates to ask for referrals.
Leverage Your Professional Network to Get Intro’s
Another valuable source of referrals is your professional network. This includes colleagues, industry peers, and even competitors who may be able to provide valuable leads. These individuals are likely to have a good understanding of your industry and the types of customers you are looking for, making them valuable sources of referrals.
Tap into Partnerships and Supplier Relationships
Consider asking for referrals from partners or suppliers with whom you have a good relationship. These individuals may have access to a network of potential customers who could benefit from your product or service. By leveraging these relationships, you can tap into new referral sources and expand your reach.
Empower Your Team to Refer
Your employees can also be powerful advocates for your brand. Encourage your team members to refer potential leads and incentivize them for successful referrals. This not only boosts morale and motivation but also helps to spread the word about your products or services.
Utilize Social Media and Online Communities
Don’t overlook the power of social media and online communities. Platforms like LinkedIn, Facebook, and industry forums can be great places to ask for referrals and connect with potential leads. Building relationships within these communities can increase your chances of getting valuable referrals to help grow your business.
When To Ask for a Sales Referral?
There are I’m sure many occasions that one could ask for a sales referral. But seeing we are in sales we want to always capitalize on the “opportunity” to ask for one. Getting into referral mode is all about having the right sales mindset. Think they won’t work and they won’t. Think they do work and they will.
Below are several different circumstances that we see it’s right to “ask” for a referral.
- After you’ve shown value to their business
- If they tell you they are happy
- You’ve achieved a key milestone during implementation or during usage of your product/service
- You find out they have referred you to someone else. That would be a great time to ask for one more “favor”
- If the customer asks for a discount, negotiate in their contract they will provide X referrals within Y period of time. We do this all the time within our contracts. Don’t under-estimate the power of negotiations.
- If you have a mutual connection with someone that can refer you to a buyers office. Now the key here is… how strong is your relationship? If it’s weak we tell sellers to ask still. You never know what someone might be willing to do. If it’s a strong relationship you better make sure you ask right away. To find the mutual connection make sure you leverage LinkedIn Premium or LinkedIn Sales Navigator or LinkedIn search filters on their freemium platform.
Do you see another? If so, please add it to the comments below and we’ll update the article with your input and attribute it to you!
What is the Meeting Acceptance Rate of Sales Referrals?
As you may have figured out sales referrals are the golden ticket and yield massive success. Yet, only 11% of sellers focus on this as a source for net new meetings.
While the acceptance rate of a meeting request by a buyer when referred to a seller can vary based on several factors one thing is for sure… 84% of B2B buyers are now starting the purchasing process with a referral, and peer recommendations are influencing more than 90% of all B2B buying decisions. So, we’d be foolish to not leverage this medium as a primary source to book that next meeting.
There are many things as well that could impact the meeting acceptance rate of a sales referral. These include the relationship between the referrer and the buyer, the quality of the referral, the relevance of the product or service to the buyer’s needs, and the effectiveness of the seller’s communication. However, there are some clear stats that we should consider on IF and or WHEN we should leverage sales referrals to engage a buyer. They are quite compelling. Take a look:
- People are 90% more likely to trust and buy from a brand recommended by a friend. (Source: Nielsen)
- 73% of executives prefer to work with sales professionals referred by someone they know. [Source: IDC]
- Salespeople who actively seek out and exploit referrals earn 4 to 5 times more than those who don’t.
- 84% of buyers now kick off their buying process with a referral.
- 92% of buyers trust referrals from people they know.
- 91% of customers say they’d give referrals. Only 11% of salespeople ask for referrals.
- Companies with formalized referral programs experience 86% more revenue growth over the past two years when compared to the rest.
- 86% of B2B companies with a referral program experience growth.
- The lifetime value of referred customers is on average 16% higher than that of non-referred customers. [Source: Wharton School of Business]
Higher Conversion Rates with Referral-Based Leads
While there isn’t a specific universal percentage, studies have consistently shown that referral-based leads generally have a higher conversion rate compared to other types of leads. As noted above, the Wharton School of Business found that referred customers have a 16% higher lifetime value than non-referred customers.
Increased Likelihood of Purchase with Referrals
Moreover, a study by Nielsen revealed that people are four times more likely to buy when referred by a friend. This statistic highlights the significant impact referrals can have on the acceptance rate of a meeting request by a buyer when referred to a seller.
Referrals Enhance Meeting Request Acceptance
In conclusion, while the exact percentage may vary, it is evident that referrals can significantly improve the chances of a meeting request being accepted by a buyer. Leveraging referrals can be a powerful strategy for sellers looking to increase their meeting acceptance rates and ultimately drive sales.
Referrals in Sales: A Successful Case Study
In the following video, Mike Moore, International Account Manager at CHG Meridian, talks about his experience in Vengreso’s social selling program with Mario Martinez, Jr. on how to leverage sales referrals.
Mike was using LinkedIn to generate business in the past but said to himself, “Why not follow somebody that’s making a living off this!”.
Mike secured FIVE new opportunities after completing Vengreso’s OnDemand Sales Training for Prospecting program: FlyMSG Sales Pro Teams! He applied the steps he learned for the “perfect digital sales referral” and achieved quality results.
For other customer testimonials like this, go to Vengreso’s YouTube channel or check out the blog archive.
Do you want to learn all the tricks of LinkedIn and get the most out of it? Make sure you participate in our LinkedIn Training! You can also check these 10 LinkedIn tips that will help you book more sales meetings, grow the sales pipeline and attain quota!
