In a way, sales flow just like water - both follow the path of least resistance. The more obstacles you remove from each, the better they both flow. Many people will read that and relate it to anticipating and removing objections during a presentation or while trying to close a sale. I say it starts way before that.

Improving your “sales flow” starts with the potential customer you’re working with. More specifically, it starts with how you came to work with your potential customer. Let’s take a look at a few different ways you can come upon a new customer. Starting out, the bottom of the sales lead pyramid is the cold call lead. A few reasons why this type of lead is at the bottom of the lead food chain include: 1) they are very hit-or-miss, usually they are a “miss”; 2) they carry no leverage of prospecting effort - you trade one call for one lead, and; 3) no credibility when they answer the phone or when you walk through their door.

The next kind of lead is the incoming lead. This lead could be in the form of an incoming phone call, a lead card that was returned from a mailing that was done, or someone walking into your store. With this lead, there is some leverage as they initiated the contact therefore at least having a need for your product or service. However, while they did call on you, odds are they also called on 3-5 of your competitors as well.

The type of lead that sits alone at the top of the lead food chain is the referral. There are several reasons why this type of lead is the most valued and desired type of lead. For starters, there was no cost to generate it. A person that is referred to you also typically has an immediate need for your product or service. And to top it off, a referral comes to you with transferred credibility.

The final advantage there is key. With other types of leads, you start from ground zero and have to build your credibility as well as the trust and confidence that person has in you. With referrals, since they heard of you from someone they know and probably trust, you have a huge advantage as they already have a heightened level of trust and confidence in you since you did a great job for the person that referred them to you.

With all of the advantages of working with referrals, you can see where many of the obstacles are removed up front allowing you to work directly on providing a solution. I’ve read that you stand upwards of a 90% chance of converting a referral to a sale if you handle it properly. (And you know that you will!)

So if working with referrals is the most desired source of leads, how do you go about obtaining them? First and foremost you have to provide superior value in your product or service as well as the manner in which you serve your customers. Without doing that, the referral door will never be opened for you. Assuming that is taken care of, let’s look at a few places to get those referrals.

One source of generating referrals is through your area Chamber of Commerce as they will periodically hold various mixers and events that are designed to bring people together for networking and doing business together. Some chambers also have leads groups that meet once a week specifically to generate referrals. If your Chamber does not have a leads group, there are also independent referral groups such as Business Networking International (BNI) that may have a chapter in your area. These types of groups are excellent referral generating machines.

In addition to Chambers of Commerce, you can get plugged into a local civic organization such as Rotary, Lions Club, Kiwanis, Jaycee’s, Optimist Club and countless others where you can get involved. My personal feeling here is to make a sincere commitment to the group and its mission and to volunteer your time and talents to helping them achieve their community goals. A byproduct of your involvement is meeting new people, networking and potential referrals.

One final way - and probably the most effective way - to generate referrals that we will look at this week is to simply ask for them. I am amazed at the number of people I work with that do not and have never asked anyone for a referral - whether that be a current customer, a friend or even a family member! What is amazing about this is there is no better person to get a referral from than someone that not only uses your product or service, but is a loyal customer and could sing your praises to no end.

So here is your first homework assignment. Identify your top 10 customers or 10 of the most recent customers that you had a great transaction with. You eventually are going to call them. However, for this week, really take some time to identify the 10 strongest, most loyal customers you have. Next week we will look at how to approach them for some referrals. Keep this in mind this week while you are working with your customers and I look forward to continuing this process next week!