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A Referral Doesn't Mean Closed Sales

You shouldn't skip steps in the sales process, even with a recommendation. Here's how you can make the most of your leads.
June 27, 2008
URL: http://www.entrepreneur.com/article/194176

When one of your business relationships passes you a referral, don't assume that the prospect is ready to hear a presentation on your product or service. When an associate passes you a referral, say thanks . . . then start digging for more information.

You will want to determine if what you offer is a fit for what the prospect needs. Taking the time to do this upfront saves a lot of time and energy--for both you and the prospect. Exactly what does the prospect do? What products or services does he want from you? Will your offerings truly fulfill his needs? What is his behavioral style? What are his business goals? How large is his company?

Even with the referral in hand, don't skip steps in your sales process. Before you approach the prospect, decide on a strategy based on whatever you can find out about him--the same as you would when preparing for any sale. Although the prospect was referred to you, all you've really received is an opportunity to approach the prospect with a favorable introduction. (This is not a bad thing--a single referral can open the door to a prospect it may have taken you weeks, months, or even years to connect with--if you even could at all.) But whether the prospect becomes a client or not depends on how well you convince him that what you offer, at the price and under the conditions that you offer it, will fulfill his needs.

There's quite a bit of difference between a basic referral and one that's well developed, and there are many levels in between. Here is a list from least to most valuable, and you should consider which level your referral represents:

The better your source knows you and is confident of your character and your business, the more often you'll get the higher-level referrals. But keep in mind that you need to be making high-level referrals for your sources, too. Make sure you spend your due diligence looking for ways to open doors for your referral sources in the same way as you hope they will open doors for you. What goes around comes around.