Latest / Smart Business Growth with Nicky Miklós / Are Referrals a Real Sales Strategy?

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Are Referrals a Real Sales Strategy? · Smart Business Growth with Nicky Miklós

• 0:06
  Speaker: Hello and thank you for joining me again today as I want to dive into this conversation around referrals and really answering the question: are referrals a real sales strategy?
• 0:41
  Speaker: Now, oftentimes when I ask a business owner, a leader, and I'm going to ask you now, how do you grow your business?
• 0:48
  Speaker: Oftentimes the answer is that there's a big reliance on referrals.
• 0:52
  Speaker: Referrals are such a massive growth strategy, whether it's intentional or unintentional.
• 1:00
  Speaker: And I've had so many different robust conversations with business owners and leaders, other coaches and people in this space around actually, is it a real strategy?
• 1:08
  Speaker: Can we over-rely on referrals?
• 1:11
  Speaker: And here's my thoughts.
• 1:12
  Speaker: My answer to this question is that absolutely referrals can be a real sales strategy as long as we intentionally, strategically, deliberately focus on being proactive around the referrals within our business.
• 1:30
  Speaker: So here's the problem: a lot of people will rely on referrals being given to them.
• 1:35
  Speaker: There's a very reactive or reserved approach around it.
• 1:39
  Speaker: Sometimes there's even a nervousness to ask for referrals.
• 1:42
  Speaker: But the statistics show that 91% of customers said that they would give a referral, but only 11% of salespeople actually ask.
• 1:52
  Speaker: So we know that referrals can be a great way to grow business.
• 1:56
  Speaker: We know that in a lot of instances, salespeople, sales leaders, business owners are actually not maximising the opportunities of really leaning in and asking for more referrals.
• 2:07
  Speaker: And we also know that clients, customers are highly likely to say yes to giving you a referral.
• 2:14
  Speaker: This episode is almost how many times can I say referral in this episode?
• 2:18
  Speaker: But you know, this is a really important topic for us to have a look at.
• 2:22
  Speaker: Well, how can I get more intentional and strategic around this?
• 2:25
  Speaker: And I want to share a couple of thoughts to make sure that you can be in that proactive space.
• 2:32
  Speaker: Now, an ideal strategy, sales strategy, which I call a nurture strategy in the business, is made up of three key things.
• 2:41
  Speaker: It's about how do you nurture your clients, your existing clients and your past clients.
• 2:47
  Speaker: They're your hottest or warmest relationships lead potential.
• 2:52
  Speaker: No surprises, it's then about looking at how do you nurture referral opportunities.
• 2:57
  Speaker: And we'll go into a bit more detail.
• 2:59
  Speaker: I want to share with you some tips today on how to do that.
• 3:02
  Speaker: And then the third part is how are we nurturing leads?
• 3:06
  Speaker: And leads are not yet necessarily warm or hot.
• 3:10
  Speaker: They're cooler, they might not know as much about you, they potentially don't know your business or how you can serve or help them.
• 3:16
  Speaker: But you're proactively investing in marketing and outreach to nurture those leads.
• 3:21
  Speaker: The referrals are really powerful because they're what we call a warm lead.
• 3:26
  Speaker: A referral is warm because even if they don't know you or your business, they know the person that is connecting you.
• 3:34
  Speaker: Now I've mentioned before, and you'll hear me say again, that trust is at an all-time low.
• 3:40
  Speaker: And so our number one job goal focus as salespeople, as sales leaders, as people who are looking to provide a solution for our market is to build trust.
• 3:51
  Speaker: And so that's why referrals can be so powerful because immediately they're a warm lead, in that there's a connection, which means that we've got more of a jumping off point in terms of building trust.
• 4:04
  Speaker: Now, existing clients or past clients, they are warm to hot because they already know you, they've experienced you.
• 4:11
  Speaker: But we're not going to go into detail around how to nurture existing and previous clients in this podcast episode.
• 4:18
  Speaker: But even if you think about actually, I haven't done that for a while, this might plant the seed for you to actually look at how you could do that.
• 4:24
  Speaker: And maybe I'll record a separate episode specifically focusing on that.
• 4:28
  Speaker: So, overall, I want to remind you that if we're looking at an effective nurture growth strategy, we've got to be looking at how are we nurturing our hot leads, which are existing clients and previous.
• 4:40
  Speaker: Really look at how do we nurture and be proactive around referrals, and then also look at our leads, which are the holder.
• 4:47
  Speaker: Now, warm leads, referrals.
• 4:51
  Speaker: Who do you ask for a referral?
• 4:53
  Speaker: I think the biggest pitfall that I see around referrals is, as I mentioned before, it's almost like a sit back and wait.
• 5:00
  Speaker: If they love what I'll do, or if they love what the team does, or the product or service we provide, they'll come to us or they'll proactively on their own think about sharing the word.
• 5:10
  Speaker: When in fact, it's not that your clients and customers don't think you've done a great job, but they're busy and you're not top of mind for them.
• 5:17
  Speaker: You're not their priority.
• 5:18
  Speaker: And so sometimes just by asking the question, our clients will go, oh yeah, absolutely.
• 5:24
  Speaker: I didn't even think of that.
• 5:25
  Speaker: Of course I can.
• 5:26
  Speaker: But here's the thing: just asking the question isn't enough.
• 5:31
  Speaker: So often when I'm running sales training, I'll ask the question, who here asks for referrals?
• 5:36
  Speaker: And I would say maybe 80% of the room agree.
• 5:39
  Speaker: When I then ask about the process behind it, how do you then follow up with the referral?
• 5:46
  Speaker: A lot of the hands start coming down.
• 5:49
  Speaker: So, yes, we can ask the question, do you know anybody that would benefit from XYZ, the benefit or the outcome of your product and service?
• 5:58
  Speaker: If the answer is yes, amazing.
• 6:01
  Speaker: We've got to ask a follow-up question.
• 6:03
  Speaker: So that's where you can then ask, wonderful, would you mind doing an introduction for me?
• 6:09
  Speaker: Or best practice, you could ask, are you happy to share their contact details?
• 6:14
  Speaker: Now, sometimes they don't want to do that, and probably more so these days, and that's fine.
• 6:19
  Speaker: But at least you've asked the question.
• 6:21
  Speaker: The ideal is getting the contact details so you can call Bob and let him know that Mary suggested that you reach out.
• 6:29
  Speaker: Amazing, that would be ideal.
• 6:30
  Speaker: And if if your contact, your client, says, no, I'm not comfortable with that, absolutely no problem.
• 6:36
  Speaker: Would you mind sending an email introduction to both of us?
• 6:39
  Speaker: And that way Bob can see that, you know, we're connected.
• 6:43
  Speaker: And that's typically where you'll get most of the yeses.
• 6:46
  Speaker: So you can see already how that's a layer deeper, rather than just relying on them to talk to the person.
• 6:53
  Speaker: Yes, you need to ask the question, but you also need to make it easy for them to be able to make that connection.
• 7:00
  Speaker: Which brings me to my next point.
• 7:02
  Speaker: Not only do you want to ask the additional question for the connection, what you can do is actually send them, ask, Mary, would you like me to send through a couple of sentences outlining the work that I've done for you or what I do?
• 7:15
  Speaker: So you can just copy and paste it in the email and send it off.
• 7:18
  Speaker: Now, highly likely Mary is going to say yes.
• 7:21
  Speaker: She's already agreed to send a referral.
• 7:24
  Speaker: She's already agreed that there's somebody that she has in mind that could benefit.
• 7:28
  Speaker: And all you're doing here is you're really making it easy for her or him or them to be able to make that introduction.
• 7:35
  Speaker: I've done a little bit of an experiment around this where I've asked for a referral or an introduction, and I didn't send any body copy of the email.
• 7:45
  Speaker: I then asked for a referral actually to the same person, and I've I've also asked it in different people, where I did give them, here's some suggested copy.
• 7:54
  Speaker: And immediately the response rate of getting that introduction increases.
• 7:59
  Speaker: Now I don't know what the statistics are on that, but I know it's a lot higher.
• 8:03
  Speaker: And if you think about it from a common sense point of view, if you're doing an intro, if you're doing a referral, you know, I love connecting people, but I have to really stop and think, okay, hang on a second, I have to talk about, you know, why am I doing this intro and a little bit about that person?
• 8:16
  Speaker: It's not that I don't want to, but it's just that it takes a bit of thinking and a bit of time.
• 8:21
  Speaker: So if somebody's providing that to me and I can tweak it and change it, I'm much more likely to do it because it will take a lot less time.
• 8:29
  Speaker: So we're being proactive.
• 8:31
  Speaker: We're asking the question.
• 8:32
  Speaker: You're making it easy for them by asking the second question for the introduction and giving them some information in the body of the email.
• 8:40
  Speaker: The third thing you have to remember to do a really effective referral is to make sure that you follow up.
• 8:47
  Speaker: Now, the money is in the follow-up, friends.
• 8:50
  Speaker: The money is in the follow-up is just a classic statement in terms of sales 101.
• 8:55
  Speaker: But it actually is so relevant in all areas of sales leadership.
• 9:00
  Speaker: If you follow up with a referral, you know, hey, hey Mary, I noticed that you haven't had a chance to do that yet.
• 9:05
  Speaker: Is there anything I can do to make it a bit easier for you?
• 9:08
  Speaker: Or just wanted to double check that was still possible to do the introduction.
• 9:12
  Speaker: You're not being annoying.
• 9:14
  Speaker: You're you you've got a relationship with this person.
• 9:16
  Speaker: And chances are they're so happy to do it, but it's just slipped their mind.
• 9:21
  Speaker: So in terms of how to do the referral, we ask, we make it easy, and we follow up.
• 9:27
  Speaker: In terms of who to ask for, I like to think of, think of it as in two buckets.
• 9:32
  Speaker: You've got two different buckets of types of contacts that can help you grow your business.
• 9:37
  Speaker: A quick interruption to this podcast episode.
• 9:40
  Speaker: I'm really curious, do you want to close more sales in less time?
• 9:44
  Speaker: If the answer is yes, which I hope that it is, then you need to get your hands on the growth code.
• 9:50
  Speaker: It is going to give you three proven frameworks and tools that will help future-proof your business and scale with clarity.
• 9:58
  Speaker: All you have to do is head down to the show notes and click the link below.
• 10:02
  Speaker: One bucket are labelled A players.
• 10:08
  Speaker: The other bucket is labelled B players.
• 10:10
  Speaker: So your A player relationships are those that could potentially be your direct client.
• 10:17
  Speaker: So, for example, in your A bucket, A player bucket, for referrals, you've got existing clients, people you've been working with already or that have bought from you.
• 10:27
  Speaker: You've got previous clients or customers, people that maybe aren't working with you now, but they have been.
• 10:32
  Speaker: If this is brand new to you and you haven't been proactive in asking for referrals, there is so much untapped opportunity.
• 10:40
  Speaker: There is so much money that is being left on the table and what I call low-hanging fruit.
• 10:46
  Speaker: So it really excites me because, you know, particularly if you're looking at filling some gaps in terms of revenue, where at the run home to Christmas to really hit that target end of year going into the new year, there's massive opportunity here by going back to existing clients, going back to previous clients.
• 11:03
  Speaker: And, you know, it's not just business owners necessarily.
• 11:06
  Speaker: So it depends on how, you know, what type of product or service you provide, but you could have contacts within businesses.
• 11:13
  Speaker: Or for example, maybe you worked with an existing client, but that person has left and are now somewhere else.
• 11:20
  Speaker: Could you contact them, A, to see how they're going and see what's happening in their world?
• 11:25
  Speaker: And you never know what opportunities might come from not calling to sell to them, but calling to check in and have a chat and see what's changed in their world.
• 11:34
  Speaker: And then, second to that, if they're raving fans or they got value out of your service, your product, you can still ask them for a referral, even though they're somewhere else.
• 11:42
  Speaker: I trust this makes sense and it's starting to get the cogs turning in terms of getting curious around who and where can I go to ask some referrals.
• 11:51
  Speaker: Now, the other element, I guess, from the A player bucket, so you've got existing clients, you've got previous clients.
• 11:58
  Speaker: Okay, now this one, just hear me out here.
• 12:01
  Speaker: You also could ask prospects that didn't say yes, prospects or potential clients that didn't turn into clients, depending on the reason they didn't go ahead.
• 12:12
  Speaker: I always sort of think that every no, depending on the reason they said no, most of the time it's a not now.
• 12:18
  Speaker: You know, if it just turned out that it wasn't the right time for them to buy, um, it didn't make financial sense at the time.
• 12:24
  Speaker: Seasonally it didn't work out, or whatever that reason is that they said no, it doesn't mean that they're not a good uh person to offer a referral.
• 12:34
  Speaker: And the way that you can ask that is look, I appreciate, you know, this wasn't the right time, or it it didn't make sense for you to go ahead for us to work together uh at the moment.
• 12:43
  Speaker: But I'm really curious, do you know anybody else who could benefit from the service of XYZ?
• 12:49
  Speaker: You know, this is a really simple script that I'm giving you, and you don't have to make it different and interesting because it works and it makes sense.
• 12:57
  Speaker: So existing clients, previous clients, or contacts that have moved around, prospects who have said no, depending.
• 13:04
  Speaker: I mean, if you didn't like them and there was no rapport, don't ask them.
• 13:07
  Speaker: But any of the other reasons mentioned, go for it.
• 13:09
  Speaker: Like what else?
• 13:10
  Speaker: What have you got to lose?
• 13:11
  Speaker: You don't have anything to lose.
• 13:13
  Speaker: They're all in the bucket of A player clients, so potential direct clients.
• 13:17
  Speaker: The B player bucket.
• 13:19
  Speaker: Now, B players are people that you could have a great connection or relationship with, but they're not potentially clients directly for you.
• 13:29
  Speaker: But they might know or be connected to your ideal client.
• 13:33
  Speaker: Chances are in your network, you have really good relationships with other leaders, other business owners, other contacts that are awesome to have in your world and they're really well connected, but they're never going to be an ideal client or you'll never work with them directly.
• 13:51
  Speaker: You can still contact them and ask them if they know of anybody that could benefit from service XYZ.
• 13:59
  Speaker: So your existing network connections and also reaching out to people who have complementary services, when, you know, win-win, but not non-competing.
• 14:11
  Speaker: So this is a little bit of a different strategy in terms of referrals, but it's connecting your networks.
• 14:16
  Speaker: So for those of you who have already nailed and you're asking for referrals from your existing, your previous clients, you've asked all of them for referrals, previous contacts, where you've got good relationships.
• 14:28
  Speaker: You're already in the process of asking even when a sale doesn't go through.
• 14:32
  Speaker: You've asked your networks.
• 14:34
  Speaker: Maybe it's about elevating this to another level and actually looking at almost partnering with another business that's non-competing, you're serving the same audience, same type of client, and there's really cool conversations that can happen there.
• 14:48
  Speaker: It doesn't always have to be a really structured referral program.
• 14:51
  Speaker: You know, this is the other thing I see a lot is people get in their head about, oh, okay, so there's got to be a reward system, um, there's got to be a referral program in place.
• 15:00
  Speaker: Uh, okay, if I if they give me one, I have to give them one.
• 15:04
  Speaker: It doesn't have to be like that.
• 15:06
  Speaker: It actually does not have to be that complicated.
• 15:09
  Speaker: If somebody knows you, if they like you, if they trust you, if they know that you can deliver for them, whether that's they've seen you in action and they've experienced you personally or they know of the work that you do, guess what?
• 15:22
  Speaker: We want to refer, we want to connect, we want to help people in our network.
• 15:26
  Speaker: So if you're that person that can deliver, then people will want to spread the word for you on what you can do for them.
• 15:33
  Speaker: Okay, so to recap, we know that research shows 91% of customers will say yes to giving a referral, yet only 11% of salespeople will actually ask.
• 15:47
  Speaker: It's money on the table, people.
• 15:48
  Speaker: That is opportunities.
• 15:50
  Speaker: I really want you to think about are we hitting our revenue targets?
• 15:53
  Speaker: Are we going for 100%, 110% to target?
• 15:57
  Speaker: Is there a gap?
• 15:58
  Speaker: Could you take on more capacity of clients?
• 16:00
  Speaker: Now, if the answer to that is no, we're at capacity, then you can start thinking about what is the process that we can implement around referral opportunities.
• 16:11
  Speaker: So don't just walk away from this, but look at how we can create this as part of our everyday rhythm within our business.
• 16:18
  Speaker: If the answer is yes, I have a gap to target, my team aren't being as proactive as they can be, jump on this.
• 16:24
  Speaker: And your action for this podcast episode is exactly that, to have a look at where I am at in terms of sophistication in our referral process.
• 16:35
  Speaker: If you don't do anything that I've talked about, go back to the beginning and really all I want you to do is contact two people this week, whether it's existing clients or previous clients or previous contacts.
• 16:47
  Speaker: If you do have somewhat of a sophisticated process in place, then look at what the gap is from what I've mentioned.
• 16:53
  Speaker: There's always an opportunity to improve in these areas.
• 16:56
  Speaker: And, you know, referrals, it's low-hanging fruit.
• 16:59
  Speaker: It's a warm opportunity.
• 17:01
  Speaker: There's immediate trust.
• 17:02
  Speaker: So really make sure that you're being intentional and you're being deliberate.
• 17:06
  Speaker: And so to answer the first question that I asked at the beginning of this episode, are referrals a real sales strategy?
• 17:15
  Speaker: Absolutely yes, when you are being intentional and proactive and it's a part of a mix.
• 17:21
  Speaker: That's one key part of an overall nurture strategy, alongside nurturing existing clients and nurturing your leads.
• 17:29
  Speaker: Have fun with this.
• 17:30
  Speaker: Take yourself lightly.
• 17:32
  Speaker: I'd love to hear how you go.
• 17:33
  Speaker: And until next time, enjoy.