Pop quiz hotshot—what’s your best channel for bringing in quality leads? Is it cold calling? Or email? Maybe LinkedIn? [Buzzer sound] Bzzzzzt. Wrong. Wrong wrong wrong. These are all okay sources. But they’re far from the best.
It turns out it’s your own buyers that are the most superior source of leads. Because they open up the door to the holy grail of all lead types—the referral. The question is, do you know how to earn those referrals without alienating your clients?
Why Referrals Rock
What’s so great about referrals anyway? Well simply put, referrals are just plain better than any other type of lead. Here’s why.
A) They’re The Easiest Leads You’ll Ever Uncover
First up, they’re the easiest leads you’ll ever uncover.
According to a report from Social Media Today, more than half of marketers (54%) say referral marketing generates more cost-efficient leads compared to other marketing channels.
B) The Best Way to Gain Instant Influence
Referral leads bypass all that time-consuming rapport-building right off the bat. And that means they’re more likely to convert.
Marketo found that referred leads have a better conversion rate than any other channel—at 10.99% from lead to opportunity, 3.74X the average rate. Compare that to sales prospecting (0.90%, 0.31X), inbound (3.82%, 1.30X), paid marketing (2.98%, 1.01X), and email (0.55%, 0.19X).
C) Easier Closing
Referred leads are easier to close.
70% of sales leaders and 69% of frontline sales reps report that referrals close substantially faster than traditional leads according to Influitive and Heinz Marketing.
D) Bigger Purchases
Plus, referrals spend more.
The Wharton School of Business found the lifetime value of referral customers is 16% higher than your average customer.
E) Flywheel Referrals
Referral leads bring in even more referrals. With each referral you bring in, you’re not just earning a single new customer. You’re also expanding your network of potential referrals and boosting the odds that you’ll bring even more of these high quality leads.
Because according to Invesp, referred customers have a 37% higher retention rate and are 4X more likely to refer more customers to your brand than non-referrals.
Alright alright, enough with the stats. Let’s get to the meat of it all…
The More Referrals Framework
The More Referrals Framework. How do you ask for referrals in the first place?
And that means you have to deliver real, tangible value for your customers. But if you have delivered, all you need to do to earn a referral is follow this four-step framework…
1. Confirm Your Value
One, Confirm Your Value. Basically, this is where you prove to your buyer that you’ve earned some serious results for them. And to do that, just follow this mini-framework we’ve put together…
- Document the following:
- Problems the buyer had when they started working with you.
- Results you promised to deliver.
- Whether you delivered those results.
- Things you’ve done above what was promised.
- What you want to improve next quarter.
- Set up a call with your buyer and run through your documentation.
- Be sure to email the documentation ahead of time (to give them time to look it over).
- Go through each step on the call.
- Confirm value.
- At the end of the call ask, “So it’s fair to say that we’ve delivered/over-delivered on what was promised?”
- Optional: Follow up with, “For my records, if I send you a quick email, can you reply and confirm that again so that I can share it with my boss?”
2. Ask “Who Else?”
Ask “Who Else?” Who else is in their network that you can help?
No need to overcomplicate here. Just follow this simple script…
- Seller: “Is it fair to say that we’ve solved X problems, with Y solution, and you’re happy with it?”
- Buyer: “Yes, that is correct.” (If they say no, refer them to your previous documentation that they have agreed to)
- Seller: “Do you know anyone else who has X problem? I’d love to see if I can help them solve it too.”
Then you shut up.
No kidding—don’t say anything else. Let the buyer think about it on their own and don’t help them out. Don’t point them in the right direction. Don’t say a word.
It might be awkward for a minute or two. And that’s okay.
But remember—you’ve made a promise and delivered value to the buyer at this point. They’ve agreed to it. And now it’s time that they do you a favor in return.
After the buyer gives you a name and their contact info, don’t give up there. Instead, say:
- Seller: “OK great. Is there anyone else?”
Don’t be satisfied with just one name. Keep going until the buyer really has tapped out of potential referrals they can introduce you to.
After you’ve got multiple leads to reach out to, it’s time to…
3. Make a Specific Ask
Make a Specific Ask—get your buyer to set up a quick introduction.
Here’s the difference between a regular ask and the specific intro we should be aiming for:
- Bad Ask: “Is there anyone you think you could introduce me to?”
- Specific Ask: “Can you introduce me to Barry Jones from ACME industries, via email? I can send you a templated introduction email if that would make things easier.”
See the difference here?
The best way to make this step more successful is by doing a lot of the work upfront. And that means passing on this template the referral source can use.
I’ve been working with [YOUR NAME] and [he/she] has helped us with [COMMON PROBLEM].
I know they have really useful content and insights that they can send over.
Does it make sense for me to introduce [YOUR NAME] so they can see if they can help you out too?
Nothing complicated here. But the goal is to make everything as easy as possible for your buyer.
And once you’ve made the specific ask, you can move on to…
4. Use the 1-1-1 Follow Up
Using the 1-1-1 Follow Up method.
You can’t get lazy after you’ve gotten buy-in from the buyer. Because most of the time, they won’t act unless you do a bit of pushing. That’s why it’s up to you to create a system that ensures your buyer is making good on their promise.
I’ve found the 1-1-1 Follow Up method is the best way to stay on top of your referral sources. Check it out…
- 1 Day – Follow up with the buyer and ask if they’ve sent the email.
- 1 Week – Follow up with the buyer and ask if they’ve sent the email. Add the potential buyer on LinkedIn. Your introduction message should mention the previous buyer.
- 1 Month – Follow up with the buyer again. Now start prospecting the potential buyer, regardless of whether the introduction has been made.
That’s all there is to it!
So if you’re not getting the results you want with normal prospecting, turn to mining referrals.