A qualified sales lead is like gold. And where does it make sense to pan for your next gold nugget? The stream that gave you your last sale, of course: a current customer.
In many businesses, referrals from existing customers are the greatest source of new business. Understanding the referral process and establishing a technique for requesting referrals can help you generate qualified leads and increase sales.
Once you make a sale and establish a relationship, your customer understands what you are offering and knows how your product or service has met a specific need.
Most customers are likely to know others that have a similar need. A business customer may know of competitors, customers or vendors with that need. Similarly, consumer customers may have friends, business associates, family members or neighbors with a similar need. In other words, customers can be a source of pre-qualified prospects.
The ideal time to ask for a referral is immediately after the sale, while the customer feels good about selecting you and your product or service. At that point, customers often view you not as a salesperson but as a resource who just provided a valuable service. You solved their problem.
Asking for referrals does not mean begging for a list. It means educating your customer about what you are looking for in potential customers and sales opportunities. Be sure to explain that you are seeking contacts who have challenges similar to the one you just helped your customer address.
Avoid asking questions that are too direct, blunt or limiting. For instance, don’t ask, “Who else do you know that might want my product?” A better way to phrase the question would be: “Is there someone else in your company or that you know who is facing the same issue we just addressed with my product?”
Most people are reluctant to provide a referral if they think you will pounce on the referral for a sale. But they are receptive to providing referrals if they believe you will become a valuable resource for the referral subjects.
When your customer provides a referral, be sure to follow through. Contact the referral and keep your original customer informed. Sending a “thank you” note is the polite thing to do and further strengthens your relationship with the customer.
Finally, reciprocate. If you know people who may need the products or services your customer offers, make referrals to your customer.
This news is provided as a service to you by Marlin Business Services Corp., a nationwide leader in commercial lending solutions for the U.S. small business sector. Marlin’s equipment financing and loan programs are available directly and through third-party vendor programs, including manufacturers, distributors, independent dealers and brokers, to deliver financing and working capital that help build your success.