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4 Reasons Your Sales Team Isn’t Receiving Referrals

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4 Reasons Your Sales Team Isn’t Receiving Referrals

It is every sales professional’s dream to wake up in the morning and there in their inbox is a new prospective client just waiting on them.  But not the kind that is just a lead from the “contact” page of the company website. Nor the kind of prospect that they then have to start chasing.  The dream is for a prospect who is serious about purchasing and already trust the sales professional to help them make the right choice.

That type of prospect only shows up in one of two ways.  Either the prospect has spent months or longer researching the options, watching the demo videos, checking out the case studies and testimonials and has ruled out that their needs will be better served by one of your competitors.

Or the prospect has been referred to you by someone they trust.

The second option is faster.  And a referred prospect is typically less price sensitive because the trust they place in you – put there by the person who referred them – adds value to you.

But most sales teams are not receiving as many – or any – referrals. Here are four common reasons why your sales team may be struggling to bring in referrals.

You are telling them to ask

I get it, it is the majority of the advice out there.  There are articles, books, training programs and more teaching people how to ask for referrals… who to ask, when to ask, what different scripts to use when asking and more.

It is what we have heard for so long we have started to believe “asking for referrals” is the only way.

But when you understand the human dynamic and psychology of a referral, you recognize that asking for a referral dilutes the power of a referral.  A referral happens because your referral source (the person who sends you referrals) knows someone who has a problem or issue and they know you can solve the problem. They refer to help someone out – the person who has the problem – not to send you a new client.

If I am willing to help someone with a problem, the help I want to provide is that of a trusted resource. Which means the relationships you or your sales team has with your referral sources matter most.

What your team needs is to be able to stop asking for referrals and start cultivating relationships with referral sources or potential referral sources.

The only tool you provide is an incentivized referral program

It seems when asking doesn’t work, many companies will turn to incentivized referral programs for their sales team to promote to referral sources.  The program typically involves paying a referral source for a referral. But what is missed with this attempt at a solution, is that only a small minority of people are willing to “refer” for a commission.

Most people refer because it is how they help someone with their problem.  They would feel uncomfortable if that friend, colleague or peer found out that they received a commission for referring them.

It doesn’t matter if the company is B2B or B2C. Providing commission for “referrals” (which are really just leads you are willing to pay for) not disclosed up front will most likely backfire by damaging the relationship for all involved.

What your team needs are better tools in their referral toolbox.

Related: A Four-Step Process to Increase Your Referral Sources

You focus on the short-term fix

Many businesses are so fixated on the now – this month’s or quarter’s numbers – that they develop tunnel vision on growth.  It is true that receiving referrals takes longer than some prospecting tactics. But the better quality of prospects more than makes up for the additional time or delay.

But to have a fully functioning referral strategy in your business, you have to be willing to invest some time and resources. Most importantly you have to be willing to balance the activity needed right now to generate a new lead with the activity needed over time to sow future referrals.  Most referral explosions start off as a trickle but then snowball when the relationship with the referral sources are handled correctly.

In my experience with the financial services industry – the now always mattered more than the future. It is true in many industries.  If we are fixated on a short-term, then we miss out on doing what we need to do now to have a different future when it comes to referrals.

What your team needs is to know how to balance short-term and long-term activity.

You haven’t trained them to have different closing conversations with referred prospects

The worst thing that can happen to a sales professional or anyone involved in bringing in new clients is to receive a referral and then not close them.  A referred prospect is always yours to lose.

The sale process is different when your prospect has been referred to you. The questions you ask, and the conversation flow follows a different path. It is not about trying to find the pain or agitate the pain in your prospect. It is not about the sale pitch of your service from A to Z or how you stack up against competitors.

It is about knowing how to connect the prospect to the trust they have in you and working together to see if you are a fit.

What your team needs is to understand how to “sell” to a referred prospect, so they don’t miss out on an ‘easy-to-close’ prospect.

Ultimately what your sales professionals need is help thinking about referrals differently than they think about other types of leads.

They need permission to take the time to develop relationships with their current or ‘soon-to-be’ referral sources. They need to understand the difference between just keeping-in-touch and what is means to be top-of-mind in a memorable and meaningful way. And they need to know how to use the right referral seed language, how it works and when to plant it, so they never have to ask for a referral or pay for a referral again.

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