The ‘MUSTs’ of a successful referral process – 3 best practices to better referral selling
In today’s sales landscape, referrals are essential for business growth. They help get your foot through the door and place you at a higher starting point to build credibility with prospects. This comes down to better access to leads who fit your target personas profiles.
Why is referral selling important?
Referred leads tend to be some of the best leads, since they provide a social proof of your businesses. 92% of buyers trust products or services that were referred to them by someone they know. This plays an important role in B2B purchase decisions, while, according to studies, 84% of buyers start their buying process from referrals.
Establishing some level of credibility with referred leads helps sales reps to set appointments and have more productive discussions, but, even so, the referral process is far from being easy. The unfortunate reality is that most sales reps are using B2B referrals wrong. Implementing referral programs can help then build permanent and repeatable referral selling skills.
Since referrals don’t just happen, even if customers are highly satisfied, a successful referral process starts and ends with the right referral strategies. For making successful referrals, it is highly essential to implement a referral system for incentivizing referrers, proactively initiating referrals and adjusting referral programs to both cold and warm referrals.
Referral Selling MUST #1: Custom processes for cold and warm referrals
Classifying a referral, as either cold or warm, requires examining the strength of the relationships involved. Since any referral involves your relationship with the referrer and the referrer’s relationship with your target persona, correctly identifying both relationships creates a more effective referral process. The warmer the relationships are, the less social capital you have to use for making the referrer and target persona to cooperate.
Warm referrals require turning to customers or other contacts that you have a strong relationship with, in order to gain access to your target persona. Due to having great relationships with referrers, you can simply mention the referrers’ names when you directly reach out to target contacts. This makes you more trustworthy and allows target personas to lower their guard. Therefore, through warm referrals you are likely to get prospects’ attention, communicate messages better and showcase your value proposition.
Cold referrals are referrals that you are not in touch with or not very close to, based on personal connections. Your relationship with a referrer and its relationship with your target persona both sets the tone in the referral process. Therefore, when they don’t have a strong connection with each other, mentioning the referrers may have a smaller impact and establishing trust with target personas can be more challenging.
Although warm referrals help create better opportunities to start off strong with prospects, it’s important not to underestimate the contribution of cold referrals to B2B lead generation. Cold referrals add value to your sales processes, since they can help you open doors faster than without referrals. The fact of being referred to the target persona creates increased credibility, which has the potential to fasten the sales process.
Referral Selling MUST #2: Implementation of referral programs
There are many kinds of referral programs. Every business, ideally, should implement multiple referral programs simultaneously for different segments of potential customers, while customizing them to its scale and audiences.
Three common referral programs that are worth knowing are non-client referrals, indirect referrals and client referrals. Although they differ in the strength of your relationship with referrers, they have one thing in common: they all use references to strengthen credibility.
Non-client referrals mainly work better in B2C, while offering people that have never worked with you or bought from you to refer your product or business to buyers they know, in exchange for some fee. These can also be reputation-based referrals, when referrers have a general awareness of your business and products or services, as well as expertise-based referrals that are based on the referrers’ understanding of your professional expertise.
Indirect referrals require asking people you know professionally to promote or refer you to target personas. In B2B sales, business partners and affiliates who can captivate your target audience can also help you reach more potential customers. Your relationships with referrers are actually based on a mutually beneficial collaboration, in which referrers are incentivized, for example, with commissions, monetary value benefits and social gestures (e.g., social media comments), or motivated by emphasizing shared social values (e.g., belonging to the same community). In addition, briefly explaining the referral relationships (see for example the email below) can make target personas more trustable while you reach out to them.
Referral: Jon Smith
Hi John (CISO),
Your former colleague Jon Smith, Altex’s CISO, who worked with our CTO, Jim Walsh, for five years at Microsoft, recommended that we speak to you about. Would you like to speak?
Referral: James Hervin
Hi Elena (CEO),
Our customer James Hervin, Pixel’s CEO, your former colleague at Chase, uses our product to address similar needs to your company. Can we discuss it?
While implementing any kind of referral program, it’s also required to customize all programs for using them in both cold and warm referrals, in order to enable a much more seamless and productive referral process.
Referral Selling MUST #3: Developing an effective referral strategy and referral action plan
Having a well-thought-out referral program, while using effective referral management solutions and the right referral strategies, will allow your sales team to keep a consistent referral process and drive qualified leads.
The importance of methodically executing a successful referral selling strategy is achieving high efficient and cost-effective referral processes. This, combined with effective CRM data management, as well as constantly collecting business intelligence and relationship data from multiple sources, can help salespeople find strong referral paths to create more successful referrals.
By being informed on great relationships of satisfied customers with your target personas, your salespeople can leverage the existing trust without having to ask for referrals and send direct emails to target personas while mentioning the referrers. In this case, being associated with those referrers makes sales reps significantly more trustworthy.
To wrap it up
Done right, referrals can be a fast track for relationship building with target accounts and the key to B2B sales success. That’s why your referral productivity matters. Integrating referrals into your sales process, as a primary prospecting strategy, can come a long way when it comes to increasing conversion rates and boosting sales results.
In comparison to other sales methods, launching a successful referral strategy and using effective referral techniques can offer a significant competitive advantage. A more successful referral process, which allows your sales team to better manage referral relationships, can be a big step towards eventually driving predictable business growth.