Why salespeople avoid referrals (and what you can do about it)

Time and again, research has proven referrals are the best way to close more high-probability prospects. So why do salespeople constantly avoid asking for them? 

A number of studies confirm salespeople avoid seeking out referrals for the following reasons:

1. It’s a different skill, and it requires a certain amount of training and development.
2. People are uncomfortable with the idea of asking loyal customers for referrals. They think it may jeopardize a business relationship or that the customer might say no.
3. They aren’t aware that there are metrics for measuring success with referrals.
4. They don’t have a preset process or methodology to support a referral selling system — from implementation to specific rewards or bonuses based on referrals.

In reality, a referral selling system is not only easy to implement, it also increases your chances of selling more.

The average conversion rate from cold calling is about 10%. The average rate of conversion when it comes to referrals is never less than 50%.

So how do you start a successful referral program? There are three steps:

1. Make it a priority. Chances are you’ve learned to sell a certain way and old habits die hard. So it’s important to make referral selling a priority. That means rearranging schedules so that you have more time to attend affairs that cater to your target prospects.
2. Create a regular process and metrics (e.g. “If I attend three seminars this week, I should be able to meet X new prospects”). Start seeking out opportunities to network through current clients. Offer to take them out to lunch and insist they invite a colleague.
3. Spend more time researching clients, responding to e-mails and dealing with direct mail. These are opportunities to communicate and branch out.

Referral programs are valuable for a number of reasons. Most notably, they:

• increase overall sales and revenue
• help companies retain more loyal customers
• enable salespeople to spend less time on the phone and more time actively selling, and
• reflect a high-powered sales organization that builds long-term relationships instead of just closing sales.

Based in part on the book No More Cold Calling by Joanne Black.