The top sales technique for acquiring new business does not involve your sales force! Yes, you heard right. If you’re not doing referral selling, you’re losing 25% of your potential business. The best method for garnering new business comes through referrals from your existing customers. There’s no faster, stronger or better way to build a business than through referral of new customers.
Here are five reasons why referrals are so valuable:
- Referrals come from people you already know. You shorten the cycle of familiarity by working with someone who knows someone you know. Common ground already exists through a friendship, acquaintance or business relationship. This eases the pressure on the initial getting-to-know-you steps of selling.
- Referrals extend the network. You widen the circle of relationships with each new referral, thus increasing your ability to tap this network for additional business, new business, and additional referrals.
- Referrals reduce sales expense. You reduce both time ands expense by asking for and following up on referrals. In our experience, it costs six times more to sell a new prospect than it does to sell a referral. Think about it. A sales force is full of expenses for a business; customers are inexpensive, since you already own them.
- Referrals add value to the source of the referral, When you follow up on the referral, get the business and create a delighted customer, you deliver value to the party who gave the referral. The new customer often credits and often thanks the referral Many industries emphasize value by offering credits for those who refer new business.
- Referrals help you use your best sales force. Happy customers constitute our strongest sales force because word of mouth is the single most effective form of advertising. Product or service claims you make often require proof sources for credibility in the eyes of a prospect. Claims from existing customers carry instant credibility and seldom require additional information. (This is why unhappy customers can be such a detriment, because their claims of poor product or service performance are likewise seldom questioned).
When you ask for and get a referral from an existing customer or business associate, there’s more than simple familiarity working in our favor. You’re tapping into strong, existing relationships, which can and do accelerate your ability to obtain new business.
Trust creates a strong basis for the buying decision. In most selling situations, trust is the first and foremost issue in the mind of your prospects. They ask themselves, “How do I know I can trust this person and this company.” Referrals provide the answer.