Don’t Confuse Recommendations with Referral Leads

Just because clients are willing to refer you doesn’t mean they will.

“Turn 70 percent of your prospects into customers.” That statement got my attention—not just because it sounded too easy, but because I wasn’t sure where the data came from or how accurate it was. Sure, referral leads are top-notch, but they don’t just appear.

I dug a little deeper and learned the statistic referred to the Net Promoter Score (NPS)—a tool many companies use to survey clients about their willingness to recommend these businesses to others.

NPS provides relevant data that measures how well customers like us and our products. It can make us feel good about the work we’re doing…or not, depending on the results. A high NPS is certainly a good start, but without follow-up, it amounts to nothing but bragging rights.

If You Don’t Ask, You Won’t Get

The misconception is that customers who score us highly will automatically send us referral leads. After all, they said they’d be willing to recommend us. But willing and doing are entirely different things.

Sure, sometimes we’ll hear from a prospect who was recommended, but referrals don’t just happen, at least not at scale. Why? Because we are not top of mind for our customers. They have their own jobs to do and lives to lead. Just because they think highly of us doesn’t mean they think of us often.

Reality check: A recommendation is just that. A client is willing to recommend us, but unless we ask, they probably never will. It’s our job as sales reps to turn recommendations into referral leads.

From Willing to Referring—What It Takes

I was intrigued when the head of sales at a prominent investment house raved about his company’s high NPS, which the team sent out to customers twice a year. When I asked what his sales reps did with this important data, his answer was “not much.” Customer service reps were supposed to call and follow up, but he wasn’t sure if that happened, and he thought they sent thank-you emails. He was chagrined that the firm received no business at all from the survey. (Yet they continued to implement it year after year. Hmmm…)

If your clients are willing to refer your company, you’re primed for sales success. But unless you actually follow up and ask for referrals, you’re wasting those opportunities—and the money you’re spending on NPS.

How to Turn Data Into Deals

Your NPS could be one of your best referral marketing tools, but data is useless unless human beings act on it. To turn NPS data into referral leads, you need a systematic plan for follow-up. Here’s where to start:

• Create a step-by-step plan for following up. (Who should be involved? What should they say or do? What’s the best cadence? When should each activity occur?)
• Decide on the best person to contact each customer, based on who has the strongest relationship.
• Don’t let customer service reps ask for referrals. They don’t know how and they don’t see themselves as salespeople. Their job is to serve customers. It’s salespeople’s job to generate referral leads.
• Enroll sales reps in a referral program that will teach them the skills, behaviors, and processes needed to ask for and receive quality referral introductions.
• Emphasize that by reaching out to possible referral sources, salespeople have an important opportunity to strengthen client relationships and thank them for their business. Frequently these conversations also lead to more business with existing clients.
• Measure the number of referrals received and the amount of new business booked. (Metrics let you know your referral-selling efforts are working, which inspires salespeople to continue making referrals a priority.)

Your current clients are your best source of new business, but they’re not mind readers. They don’t automatically know you want more clients or that you would appreciate introductions to their connections.  Don’t rely on recommendations. Enroll your current clients as active referral sources and keep your pipeline full of hot leads.

How can you ask for referrals in a way that gets results? Download No More Cold Calling OnDemand for tips, strategies, and a systematic referral marketing plan.

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Follow Joanne on Google+ or Twitter @ReferralSales, or connect on LinkedIn and Facebook.

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