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How to Ask For and Get Referrals

By Art Sobczak (edited by Jack Fries)

According to one study, 86% of surveyed customers would refer their broker to their friends, yet only 12% had ever been ASKED. Another study found that a referral is up to 15 times more likely to do business with you than a cold prospect. Cold calling is HARD and statistically unproductive. Referral based selling can be significantly easier and more efficient IF you know how to do it effectively. Here's how....

86% of surveyed customers would refer their broker to their friends, yet only 12% had ever been ASKED. Another study found that a referral is up to 15 times more likely to do business with you than a cold prospect.

There are a variety of ways to use referral marketing and selling. For example:

• Get a name from someone else and you contact them.
• Have someone else contact a prospect and let them know you will call.
• Have someone else refer prospects to you every time they encounter
a person who could use what you sell.
• The Ideal: Have someone else contact a prospect and sell for you.

Also referred to as "word of mouth" marketing and selling, it's usually the least expensive and most productive form of lead and new business
acquisition you can get.

I'll give you a few tips on how to get great referrals, but it struck me while writing this...why not do my own referral experiment? So that's what we'll do in this article. And you hopefully will participate. Here goes the first part of it.

Will you please refer three other people who could benefit from the Fries & Fries monthly eNewsletter?

So, practicing what I preach, I'm asking you to simply take a few moments to contact a few people you know, do them a favor, and suggest they sign up for the free eNewsletter by clicking here: http://www.jackfries.com

ASK THE RIGHT PEOPLE, AT THE RIGHT TIME

An insurance sales rep called me, gave a horrible opening ("I'm with ____ insurance agency, and would like to schedule a time to get together with you to discuss your insurance needs. Would two or four o'clock be better on Tuesday?") After telling him I wasn't interested, he said, "I see. Do you have any friends I could contact?" My answer wasn't very kind.

So who IS the right person, and when is the right time?

Common sense–and experience–tells me it's someone who just bought from you, or complimented you on your products or services. They're in a frame of mind where they're thinking about how good you are, and how they gained from what you provide. Be on the lookout for, and seize the opportunities you might encounter every day.

ASK THE RIGHT WAY

Far too many producers say, "Do you know anyone else I could contact?" Instead, tie your request into the problem you just solved, the pain you eased, or the result you helped them achieve.

For example, "Pat, I'm glad you were able expand your coverage and reduce your loss exposure by selecting me as your agent. By the way, who else do you know, who also is experiencing a similar problem, that might be able to also benefit from a program like I've put together for you?" Now you're putting them in the position of HELPING a friend, instead of sending a salesperson after them.

REMIND THEM OF POSSIBLE PROSPECTS

If they're coming up empty, give suggestions, " ... someone in your trade group, country club, perhaps a similar business you don't compete with ...?

And who else do YOU know who could benefit from this email newsletter? How about the outside sales staff? Any other inside reps in your department, other departments or divisions? Fellow members of your Association?

USE REVERSE REFERRALS

Often you have highly-coveted prospects that you would love to soften up before contacting. Comb your customer base and ask them if they know the
prospects, and if so, if they could help you. For example, "By the way, I've identified several members of your association as people we could likely help in much the same way we helped you. Would you happen to know Joe Jones at Jones Electric, or Mark Short at ABC Electronics?"

ASK WHY THEY'RE A GOOD PROSPECT

Say to your source, "Tell me about them," after they've given you the referral. They'll give you great info, and sell YOU on why the prospect should buy from you.

MAKE IT EASY FOR PEOPLE TO SEND YOU REFERRALS

Send out stacks of your cards to your sources. Ask them to put you in their contact management program. Instead of your company name, just have
them put the description of what you do into their program or Rolodex ... under "INSURANCE," for example, so they can just type that in and your name will come up when they're looking for it.

ASK OTHERS TO SELL FOR YOU

Any time someone volunteers, "I know of someone who could really use you ...", don't just get the prospect's name and number. Ask the source to contact them for you. After all, they felt strongly enough about what you do to think of the prospect, why not ask them to take it a step further?

Formalize this process. You should brainstorm a list of the 25 people in your life who are in a position to make the greatest impact on your business or sales. Never be out of contact with these advocates more than 30 days at a time. Call, email, mail, fax, send trinkets, articles, newsletters, anything of value to keep your name in front of them, and to keep them referring
you to others.

Put these people in your contact management system and schedule a follow-up every 30 days.

BE CREATIVE, THINK BIG

If the 80/20 rule applies, and it usually does 80% of your business coming from 20% of your customers), it makes sense that you want to get more customers just like your most profitable ones. So target them for referrals.

Ask your best customer if she would mind drafting a testimonial letter singing your praises, mentioning how your company helped her, and how she highly recommends they also work with you. (Even offer to write the letter to make it easier for her.) Does it work? Like a charm, every day for those with the desire and big-mindedness to try.

THANK YOUR SOURCE

As the saying goes, what gets rewarded, gets repeated. You don't want your referral source to dry up on you, you want them sending you business EVERY TIME a situation arises that would be good for you, and the person they are thinking of. Therefore, reward your source for a referral. It can be as inexpensive as a thank you note, or something material.