There are opinions, and then there is data – facts if you like. I’ve recently been writing about why referred customers are better customers and suggesting you should make referral a systematic part of your promotional program and how you should go about it.
In “The Simplest Way to Get More Business” we discussed the “why” you should have a referral program, ”how” to go about it, and the ”mistakes to avoid”.
I then interviewed Rashid Kotwal from Revealed Resources. In Part 1 of our interview (How to Gain High Value Clients) Rashid discussed the importance of high value clients and what they can mean for your business. High value clients are few in number, but provide the greater part of your sales, and profits – the 80/20 Rule.
In Part 2 “Are you systematically using the most effective form of promotion?” Rashid looked at why you should make referral a systematic part of your promotional program and how you should go about it.
Clients you get from referrals are more likely to become high value clients. After all, a client who thinks enough of you to refer you is unlikely to refer you to a dud.
Not surprisingly, there are other experts similarly extolling this sales tool, and backing their thoughts with some research. One of them is Tim Wackel.
Ladies and gentlemen for the past couple of days I’ve been spending some time catching up on some reading, and I’ve been focusing my energies on this area known as referral selling. So I would like to share with you today four fun, interesting and relevant statistics when it comes to the world of referral selling.
Fun Fact #1: According to the folks at Dale Carnegie, 91%, that’s right 91%, of customers say they give a referral, but only 11% of salespeople actually ask for them.
Fun Fact #2: Research done Nielsen reports that people are four times more likely to buy when referred by somebody that they know.
Fun Fact #3: Heinz Marketing, which researched over 600 companies, came up with this very interesting insight. Companies with formalized – I really have to underscore the word formalized – companies with formalized referral programs experience 86% more revenue growth over the past two years when compared to the rest. And yet, only 30% of the companies they surveyed actually have a formalized referral program.
This seems so fundamental; but only 11% of salespeople are asking for referrals. What’s going on with the 89% of the rest of you?
Last but not least, Fun Fact #4: According to the American Marketing Association, offering a reward increases referral likelihood, but the size of the reward really doesn’t matter. As a matter of fact,- I found another article by the University of Chicago that said non-cash incentives are actually 24% more effective at boosting performance than cash incentives.
Number one, if you’re not asking for referrals, you’re probably missing out on opportunities. It’s just that simple.
Number two; I would really strongly encourage you to formalize a process for getting referrals. Here’s the challenge. This seems so fundamental; this seems so easy, yet we discover from the very first statistic that only 11% of salespeople are asking for referrals. What’s going on with the 89% of the rest of you? Well you know what, we’re busy. We get caught up in the day-to-day and we simply forget to do it. So please, get a formalized process around asking for referrals. Get a plan and put it into place.
Number three, give people a reason. Incentivise people to share. Whether it’s simple Starbucks card or maybe it’s an AMX Gift Check, you decided. According the University of Chicago, the non-cash incentives are 24% more effective. So it’s not like you have to spend a ton of money. Just let people know that you appreciate them giving you that referral.
So, in closing, I would like to ask for your referral. If you’ve been following me for a while, if you enjoy these two minute tips, if you like the webinars that we’re doing, and you know somebody who needs a keynote speaker, you know somebody who has an upcoming sales meeting or you know somebody who is looking for an executive presentation coach, just reach out and connect us. If the referral turns into an opportunity, we’re going to send you an iPad Mini as a way of saying thanks for trusting us with that opportunity.
You can get more ideas and answers from Tim at www.timwackel.com.
© Copyright 2017 Adam Gordon, The Profits Leak Detective
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