Last week we looked at three types of leads: cold calls, walk/call-ins and referrals. We listed the pro’s and con’s of what makes one better than another to show how the referral is the best lead source to work with.

Before diving deeper into the benefits of working with referrals, let’s re-cap the general benefits they provide. For starters, the referral requires no cost to generate. Also, the person that is referred to you typically has an immediate need for your product or service. Finally, a referral comes to you with transferred credibility from the person that referred them to you. Transferred credibility is what really sets a referral apart. Initially, the referral doesn’t know or trust you, but since they know and trust the person that referred them, they bring that trust with them to your door.

This week we will look at seven specific reasons why referrals are the preferred lead source for optimum use of time and the best lead source to spend time trying to generate.

#1 - Easy to obtain. If you have provided value, a quality product or service that solved your customer’s problem and/or helped increase their profit and did so with a level of service that they have never experienced, their referrals are yours for the…asking! The perfect time to ask for their referrals is after the purchase is made and at some point they are raving about the product or their experience with you. Do not let this opportunity pass you by! “Ed, I’m thrilled that this has worked out so well for you! Who do you know that would also appreciate what we’ve done here?”

#2 - Very low-cost. A referral usually comes to you one of two ways; they either call you directly as a result of someone giving them your name and number, or you call them after getting their name and number from your customer. As such, you don’t have to spend dollars on traditional advertising methods to get their attention multiple times before deciding to give you a call. Another cost savings is the time it takes to seal the deal…so why don’t we take a closer look at that one.

#3 - Quicker sales cycle. With transferred credibility, you only need to re-cap what the referral appreciated from your customer’s experience and build on it rather than build the trust and overcome the skepticism that comes with many customers off the street. With the skepticism removed, you can proceed directly to GO and collect your $200!

#4 - Increased conversions. As mentioned last week, a good referral will convert to a sale, upwards of 90% of the time, as long as you don’t blow it with them along the way. I can’t think of another type of lead that you can work that would have a higher conversion rate. The only one that comes to mind is Mom and she could only be referred to you once!

#5 - Referral leverage. You’ve wowed your referral and provided them with the same great product and outstanding service that you did to their friend. Asking for and receiving referrals is now almost a given. Since through referral is how they came to know you, passing you the names and numbers of others they know is now a no-brainer. You’ve now leveraged that one referral into a handful of others.

#6 - Residual referrals. Once you start working with more and more referrals, it breeds a referral mentality in both yourself and your ever increasing customer base. The number of referral customers you will work with grows exponentially over time.

#7 - Addictive! Once you get the hang of asking for and cultivating referrals, you won’t quit! You will continually look for more and more creative ways that you can ask for them and work with them.

Alright. It’s homework time. Over the past week, you identified your top 10 customers or 10 of the most recent customers that you had a great transaction with. Now, take out your list of top 10 customers and prepare an “introduction wish list” for each of them. Your wish list will contain a few of their customers that you will ask to be introduced to. (Don’t be greedy…only list a few.)

You may be able to pull together this list for each customer based on conversations you’ve had with them or you may need to do a little research. If you need to do some research on whom some of their customers are that you would like to meet, a great place to start is your customer’s brochures and websites. Many brochures will have testimonials on them along with the person/company that wrote them. Also, your customer’s website may have a tab listing their satisfied customers, references or testimonials. Check them out and copy a few down.

Next, give your customer a call. Get the conversation around to why they purchased from you and the ultimate service they received. At this point, mention that you saw they work with (insert your wish list here) and wondered if you could get an introduction to them? People, for the most part, want each other to be successful and will at least go a little out of their way to help us out.

Here is the key: Asking for an “introduction” has two benefits. One, an introduction is less invasive for your customer than blindly handing over a name and number of one of their customers. Two, an introduction opens the door to the referral, where a random call from one of their supplier’s supplier is only a knock at the door.

If you’ve never discussed your customer’s customers, and they do not have them listed somewhere in a brochure or website, when you call your customer, rather than using your wish list, try this: Ask who they know that would also benefit from your product or service as well as the manner in which you provide it.

Notice I said to ask them “Who do you know…” not “Do you know anyone…” - there is a big difference! The latter is too easy to get a “no” answer as it does not require them to put on their thinking cap. Rather, the former question is proactive and causes them to stop and think of who they know that they could introduce you to. Again, since they want their contacts to get the same benefits from you that they did, they will go through their mental rolodex to help you out. Now go fill your funnel!