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The Secret Formula for Earning Business Referrals

Ian Altman Today’s guest post is by Ian Altman, CEO of Grow My Revenue, LLC. He is the author of the Amazon #1 best seller, Upside Down Sellingand he coauthored his new book, Same Side Selling, with Jack Quarles of Buying Excellence.






You know how important referrals can be to growing your business. While the cold call is the lowest opportunity in the sales profession’s food chain, the quality referral could be the pinnacle. I had the pleasure of being in the audience for the Institute for Excellence in Sales and Business Development's recent session in Northern Virginia, and Bill Cates was a speaker (not the Microsoft guy – Cates with a “C”). Cates is known as the Referral Coach, and he’s a highly acclaimed speaker on the topic of referrals. He is especially well known in the financial-services sector.

I went to the session knowing that I would be engaged and entertained by a very capable speaker. I’m ashamed to say that I was not expecting to learn much. As anticipated, I discovered that Cates is a fantastic professional speaker and storyteller. The embarrassing part for me was that he shared some principles that I knew I had heard before but had forgotten. In fact, not only had I heard some of these principles, I had actually written an entire chapter about referrals in my first book, Upside Down Selling.

Valuable Advice

Cates shared a formulaic approach, called VIPS, to earning referrals. He described the difference between a basic referral and a personal introduction. The basic referral is akin to  someone pointing you toward the opening of a lion’s den: you’re referred to the opening, but proceed at your peril. The personal introduction, however, is based on value, and value is what the first letter of Cates’s VIPS method stands for. These top-tier introductions take referrals to an elevated level of opportunity.

In our upcoming book, Same Side Selling, Jack Quarles and I devote an entire chapter to delivering value. Quite simply, you can either ask your client for a referral that sounds like a favor to you, or you can ask for a personal introduction based on the value you deliver.

As we discuss in the book, executives make decisions based first on why they need what you are selling or what problem it solves for them. Second, executives want to work with the vendor they feel is most likely to deliver the results they need. Here’s how this plays out for a great referral.

The Formula for a Great Personal Introduction

People don’t like to feel as if they are being sold. For that and the reasons stated above, the best referrals follow a set formula:  

1) This is the problem were we facing when we called on them for help,

2) this was our outcome,

3) here’s why I think they might be a good resource for you or people you know.

A great introduction from one of my clients to one of their friends or colleagues might sound like this: “We faced pricing pressure on every deal. Our great stuff was being treated like a commodity. After just a few months, we have shortened our sales cycles and dramatically improved margins. I remember when we spoke a while back, you were facing similar challenges. I’d be happy to make an introduction if you’d like to see if they can help you, too.”

Notice how the recipient of the introduction gets a clear message about the problem you solve and the likely outcome or result. It’s much stronger than this example: “We bought some stuff from Joe Blow. Would you mind if I gave him your name?” Getting a referral so that you can try to sell the recipient something is about as valuable as an email introduction to your third-level LinkedIn connection.

Another Unanticipated Lesson

I was fortunate to have been in the audience when Bill Cates was speaking. As an author and speaker on the subject of sales, I arrogantly showed up not expecting to learn anything. Sometimes hearing the same message from a different perspective can remind us of things we used to know and somehow neglected. Cates ended his session by sharing a great way to inspire referrals without sounding pushy. He tells his audiences to remember to say to clients, “Don’t keep us a secret.”

Please share in the comments your best referral story and/or most pathetic referral story.

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