Nick Kane’s Referral Selling Dos and Don’ts, Ep #345

Referrals are a recommendation from a satisfied customer or trusted network of people you interact with, i.e. your center of influence. If you’re in sales and you aren’t asking your customers or sphere of influence for referrals, you’re leaving money on the table. But what are the best practices for asking for referrals? Nick Kane shares his referral-selling dos and don’ts in this episode of Sales Reinvented. Check it out! 

Outline of This Episode

• [1:04] What are referrals? How do they work in sales?
• [1:34] Common mistakes salespeople make asking for referrals
• [2:21] How salespeople can leverage social media to generate referrals
• [3:10] Nick’s advice for those exploring referral-based selling 
• [5:06] How to measure the success of a referral program
• [6:07] Best Practices: The right way to ask for client referrals
• [8:40] The role technology plays in referral selling
• [10:20] Nick’s top 3 referral selling dos and don’ts
• [14:29] A story that drives home the importance of creativity 

Nick’s advice for those exploring referral-based selling 

You have to make sure that you’re building strong relationships with customers, both existing and prospects. Provide excellent service and support and satisfy your client’s needs. How well do you understand their needs and pain points? Are you helping them solve their problems? A positive customer experience is the foundation of gaining referrals. Happy customers share information and open their networks to you. Secondly, you should create a referral program. Incentivize customers to send people your way. 

Best Practices: The right way to ask for client referrals

Salespeople tend to ask for a referral at the wrong time. Make sure you approach the customer at the right time in the right way. How you ask must be genuine. You need to establish a relationship first. Make sure the customer has a positive relationship with you and that you’ve done good by them. 

Salespeople also struggle to explain the value proposition and what’s in it for the customer. You need to find a way to make it advantageous for them to provide referrals. Ask tactfully and let the customer know what’s in it for both of you. Customers want their salespeople to be successful as long as you’re helping them to be successful as well. 

Who are your loyal and satisfied customers? Who's had the most positive experience and is most likely to refer others? Segment your database to understand who’s most likely to offer a referral. Who interacts with your prospect? Where are those conversations happening? How can you leverage influence from someone in a position of influence? 

You can also customers who have already referred others to refer more people. If they’re willing to refer their network, it can expand your referral opportunities. 

Why does Nick recommend surveying your clients regularly? Listen to the whole episode to learn more!

How to measure the success of a referral program

You should be tracking the number of referrals generated as a lead source in your CRM. Know exactly where those referrals come from. Follow each of those referrals through the pipeline. How many turned into opportunities? What is the size of those opportunities? How many converted into a sale? What is the customer lifetime value of the customer relationship? Treat the referrals as their own lead source and track them as such. 

Nick’s top 3 referral selling dos and don’ts

Nick shares some strong dos and don’ts every salesperson should consider:

• Build strong relationships with existing customers by providing excellent service, excellent customer experience, and excellent support. Consistently ask for feedback to improve the customer experience. You need to be dedicated to serving your customers and helping them solve the problems and challenges they communicated during the sales process. You have to deliver on your promises to get referrals.
• Find a way to educate the customer on the benefits of the referral program. Share how it works, and how it benefits them, and make sure you’re consistently providing clear instruction on how to refer others. When customers understand your program clearly, they’ll be more likely to refer others. 
• Timing is critical. If you ask too soon, you come across as disingenuous and pushy. If you wait too long, you might miss the window of when they were the happiest. Find the sweet spot to ask and ask tactfully. 
• Don’t ask for a referral too early in the customer relationship. Asking too early might damage the relationship.
• Don’t assume that a customer is satisfied. Salespeople often mistake silence for happiness. Check-in and survey your customer consistently to make sure they’re happy and have what they need before you ask for a referral.
• Don’t be insincere. Try not to be pushy. Don’t offer incentives that might come across as inappropriate or unethical. Some organizations have specific requirements or rules around what someone can receive for referrals, so be aware of that. 

Learn more from Nick in this episode of Sales Reinvented! 

Resources & People Mentioned

• Critical Selling: How Top Performers Accelerate the Sales Process and Close More Deals 

Connect with Nick Kane

• Connect on LinkedIn
• Follow on Twitter

Connect With Paul Watts 

• LinkedIn
• Twitter 

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Jamie Crosbie is a highly accomplished senior executive and motivational speaker with expertise in sales leadership, talent acquisition, and management. She has achieved significant revenue growth, managed large sales teams, authored books, and consults in sales talent acquisition, strategic planning, and Peak Performance Mindset® Workshops. Jamie's workshops help companies set new sales records and create a more positive sales environment.