Salespeople Don't Live Off Referrals Alone
Anyone who is experienced and successful in referral marketing will tell you that sales skills are essential. They're needed in every part of the process, not just in closing the sale.
First, a referral is not a guaranteed sale; it's the opportunity to do business with someone to whom you've been recommended. Therefore, show that you can and will provide the expected products or services and that your customer will be happy with the process and the result. If you can't make that first "sale," however, your potential referral source will dry up, and she won't do her part to sell the referral.
In the early '90s, I conducted a survey as part of my doctoral studies, and found that approximately 34 percent of business referrals turn into sales. Another doctoral student replicated my original study in 2006, and the findings were nearly identical at around 34 percent. This is an outstanding number, but it's still not 100 percent.
Therefore, sales skills are still important in networking. Some people are better at closing sales than others. Having the knowledge and skill to generate the referral, then to close the sale, gives the business person a one-two punch. There are countless books, classes and seminars on how to close a sale. Classes offered online, on campus or even onsite at a large company can teach you these skills. Webinars also abound, and many offer related online communities to interact and exchange ideas with "virtual" peers.
Second, while the referral helps a great deal, convince the prospect that making the first appointment is worth his time. Avoid being aggressive, indecisive or evasive at this point; having been in contact with your referral provider, the prospect is expecting a high level of respect and professionalism in your approach. Be confident that a mutually beneficial deal is in the works, and communicate this to the prospect by your attitude and actions.
Third, once you've made the appointment, persuade the prospect to buy your product or service. This is the part that usually comes to mind when one hears the word "sale." Integrity is paramount at this stage. The prospect should know exactly what to expect: no hidden charges, no unexpected exceptions and no bait-and-switch.
If you've created a highly efficient system of generating referrals for your business, you'll see a steady stream of referrals. This doesn't guarantee that you'll be capable of closing any of them. It takes sales skills to turn prospects into new clients, customers or patients.
Note, however, that in referral marketing, closing the deal with your prospect is neither the beginning nor the end of the selling process. At this point, you'll have made at least two previous sales. And to build and maintain the long-term relationships that characterize referral marketing, follow up with both your new customer and your referral provider--again, part of the total sales process.
The No. 1 rule in referral marketing is to make your referral provider look good. Demonstrate that you know how to sell to the prospect in a way that doesn't embarrass the source of your referral. Show that you're going to consult with the prospect, discover his needs, offer solutions based on those needs, give him some options, and not force a sale if you know you can't provide a good solution. On the other hand, if your technique is to hold the prospect hostage at his kitchen table until he breaks down and buys, your referral source will feel you've abused your relationship with him and damaged his relationship with the prospect. You may get the deal, but you've shut yourself off from further deals with that client--and with any future referrals from your source.
The message about sales in referral marketing is this: If you're not comfortable in sales or if you haven't been professionally trained, sales training is a worthwhile investment. Keep this message in mind and it'll serve you well in every aspect of relationship marketing and referral networking.
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