Referrals convert at a higher rate than any other source of leads. Your customers themselves can be a surprisingly effective tool for generating qualified leads to build your pipeline. After all, business relationships are made through networking and partnerships. These connections are an opportunity for you to take advantage of.
Let’s say you’re on a call with an unqualified lead. You may be able to quickly and easily replace them in your pipeline by asking for a referral to a more appropriate person. Alternatively, you can leverage success stories by asking a happy customer for a referral.
When comparing companies across the board, companies with formalized referral programs experience 86% more revenue growth over the past two years, compared to the rest. Account Executives are expected to close deals, however, they should be creating more leads when opportunities arise as well. Referrals are a key component in filling your pipeline.
The timing to ask for a referral is crucial. There are two scenarios that are good times for an AE to ask a customer for a referral.
The first is right after you close. This is where you will most likely get the green light from your new customer. In fact, 83% of consumers are willing to refer after a recent positive experience.
Think about it, when you first download an application, they usually ask you right away to refer people in exchange for some type of incentive. There's a reason that these apps ask you at the beginning stages. You're more likely to actually accept a referral at the beginning of using a product/service; nobody wants to say no to a new relationship/partnership/etc.
The second is when there's a triggered action that shows they’re using the product and seeing success, this might be a couple of months down the road from when they closed. Your interest in a product/service as a consumer goes from starting really high, slowly decreasing, then goes back up as you start seeing success. So, if you wait to ask for a referral, make sure they are in the stage where they are starting to see success.
"Referrals are an untapped honeypot of leads that convert to meetings at a very high rate."
- Mike Hurley, CEO of WarmUp.
According to HubSpot research, 55% of buyers report using word-of-mouth referrals to make purchasing decisions. If someone learns about your product or service from a trusted source, they’re more likely to buy from you. This will jump-start the sales cycle with that prospect and is overall more effective for building your pipeline.
The best way to get a referral from someone is by going to the person with an idea list of people. Not simply asking if they know anyone. Say something along the lines of, "Hey, I've been actually trying to break into these five people. Would you mind if I mentioned your name?". Very rarely will a customer say no to you. People don't like saying no to people they like, and especially if they just bought from you.
Pro tip: Go to a customer with a list already in mind for referrals. Go on LinkedIn Sales Navigator, click on the person or people you just closed and click on their connections. Set up some filters for your ideal customer profile that you're going after and click on the connections that you both share. You can formulate a list from here.
It’s best if you never ask for referrals in a digital format. Do not ask for a referral over email or through social.
Referrals are personal. You should always ask over the phone or, even better, on a Zoom/Skype call. The point is that you’re appearing more personable. You are showing the value and openness of the relationship, and it also helps that people are less likely to say no over the phone or when they're face-to-face with someone. You're giving someone the option to ignore you or say the famous "let me get back to you on that" when you ask over email.
When you ask over the phone or in-person you can also get answers to other questions you may have and uncover how well they even know the prospect. They are also more likely to share more information with you that will help you o get a sense of who the prospect is.
There are a couple of other routes you can take to ask for referrals. Let’s dive into each.
After you close someone, go to their LinkedIn profile. With LinkedIn Sales Navigator, you can see people who also viewed profiles under the “People Also Viewed” tab. Similarly to searching through their connections, but going a bit deeper. These are generally people that know them, have done stuff with them, and have spoken with them on a more personal level.
So you can now say, "Hey X, I saw you know Y. Would you mind if I mentioned you in an email?" You can now lead a cold call or cold email with something like, "Hey, I saw you know Y. I just closed him. We really liked what their company's doing, and I think we might be able to help you with XYZ value prop."
When you’re prospecting a person from one of your targeted accounts, and they turn out to be a disqualifying lead, maybe it's just a bad fit for that department, but otherwise, it's a good account. You can then ask for a referral within that company to a different department.
You can say something along the lines of "Oh, so our product maybe isn't good for your department because of XYZ. We can't do XYZ for you, but what about your inside sales team? Do they need this? Can I get a referral to them?".
Now you have an insider referral that holds a lot of value.
Asking for referrals can be intimidating, but you will never get any if you don’t ask. Referrals can be instrumental in filling your pipeline and generating more revenue.
Referrals are all about trust. You have to trust your customer to ask for a referral, your customer has to trust you to give the okay, and the prospect has to trust the customer to trust you. Asking for referrals are personal, so be personable.