Closing the Referral Gap

by | Dec 17, 2021 | Sales Motiviation

The legendary Dale Carnegie once claimed that 91 percent of customers said they would be willing to give referrals, yet only 11 percent of salespeople ask for them.

More recently, a Texas Tech University study revealed that 83 percent of satisfied clients are willing to refer products and services, but that only 29 percent actually do. The study referred to this as the “referral gap.”

It’s time to close that gap, because you can’t afford so much missed opportunity in a competitive marketplace.

I believe that latent referral potential is the biggest wasted resource in the sales profession. There is simply no better way to get a cold prospect to talk with you than to have a referral from someone that prospect trusts.

But why does this referral gap exist? Why are sales reps hesitant to ask?

There are several reasons, but we’ll start with fear of rejection. Fear is a natural part of everyone’s psyche, even confident, gregarious people. After building a trusting relationship with a client and cashing a commission check, it would painful to hear “no,” upon asking for a referral.

Similarly, some sales reps fear asking for too much. They think along these lines: “I spent so much time with the person, and they agreed to buy, so isn’t it going too far to now ask them for a referral after everything they have already done for me?”

But if you have done a good job of serving the client while at the same time building trust, you could make the argument that the referral actually strengthens your relationship with them. It’s kind of flattering when a vendor wants me to make referrals on their behalf. It shows me that I was an important and prestigious client.

Asking for a referral puts you and the client on the “same team” and creates more of a friendship between the two of you. Furthermore, saying nice things about you to others reinforces and reminds your client why you’re so awesome.

In an era when buyers are jealously protective of their time, a referral from a trusted source is your ticket to the show. The higher up a prospect is in a company, the more important referrals are.

Reaching busy decision makers is not the only reason you should ask past/current clients for referrals. By asking for business leads, you could find out about prospects who otherwise would remain hidden from your view. There are essentially thousands of prospective clients out there who you do not yet know and who have not heard of you. A referral is your ice breaker, a chance to know someone who could someday become one of your best clients.

Additionally, referrals can get prospects thinking about making a change even when the thought of changing hadn’t previously entered their minds.

For example, let’s say there’s a client who’s marginally happy with their current vendor. They’re happy enough that they don’t feel compelled to look around but they’re not so satisfied that they wouldn’t consider an unexpected solicitation from someone who referred you. A referral could be just enough of a catalyst to make them consider a new provider.

Always be grateful for any referrals you receive. When clients allow you to use their names to seek business from their cherished contacts, they are putting their reputations on the line just to help you. That means you have an obligation to treat those referrals with the utmost care and respect. Caring for referrals is a sacred trust in the sales world, so take your job seriously.

Jeff Beals helps you find better prospects, close more deals and capture greater market share. He is an international award-winning author, sought-after keynote speaker, and accomplished sales consultant. He delivers compelling speeches and sales-training workshops worldwide. He has spoken in 5 countries and 41 states. A frequent media guest, Jeff has been featured in Investor’s Business Daily, USA Today, Men’s Health, Chicago Tribune and The New York Times.

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