The following was adapted from an interview conducted by Dan Walker, host of SalesRepRadio – a weekly podcast offering tips, best practices and expert advice for sales professionals across North America and around the world.
Q: Okay, here’s an easy question: what’s the quickest way to get new business? Referrals, right? The 
International speaker, trainer, sales consultant, and the Founder and President of Engage Selling Solutions, Colleen Francis, is here to share some surefire advice with us. Colleen, welcome back.
Colleen Francis: Thanks, Dan. It’s a pleasure to be here.
Q: Colleen, we can all agree that getting new business from referrals beats getting new business from cold calling, hands down.
Colleen: That’s very true. In fact, if you make cold calls, it will take you an average of 75 to 125 contacts just to get one sale. That’s 75 to 125 contacts – not just calls where you left a message or didn’t get anyone.
On the other hand, when it comes to referrals, the best clients I work with see about a 2:1 ratio between referrals to closing. I don’t know about you, but I would much rather make two calls to get a sale than 75.
Q: I completely agree. But are you sure about those numbers, one piece of new business for every two calls?
Colleen: Some of my clients are definitely seeing that kind of success. One client who used our referral techniques received 22 referrals, got 18 appointments and closed nine deals. That’s almost a 2:1 ratio for closing, and much more than 2:1 when it comes to getting a meeting.
Q: After hearing those numbers, why would anyone want to mine for new business any other way?
Colleen: That’s a great question. I really think that referrals are the single most effective strategy available to sales people to increase their business. More of us should be using referral techniques and creating a referral process that will proactively give us new leads on a daily or weekly basis.
Q: I don’t suppose you happen to have any of those techniques handy that you would be willing to share with us?
Colleen: It just so happens that I do!
One of the best ways to get referrals is to simply be aware of your clients and what they need. I don’t mean just what they need from you in order to utilize your product or service. I mean, what do they need in general to grow their own business?
As sales people, we have a vested interest in helping our customers to succeed. If they grow and expand, then we grow and expand. So one of my clients always asks her customers after she makes a sale: “Now, how can I help you?”
What she’s asking is what kind of customers does her client want to be introduced to? Or what services or opportunities do they need to grow their business? By asking that question, she positions herself to become their go-to person for both their personal and professional lives. In the process, she not only earns their trust and loyalty; she also added $17,000 in commissions to her bottom line last year.
The key is finding out what kinds of people your clients want to be introduced to or what kinds of services they need to grow their business, and then referring them to those people or opportunities. When was the last time you gave someone a referral and didn’t necessarily expect anything in return?
By using the power of reciprocity, we encourage our customers to engage with us and refer more business our way.
Q: Is the reciprocity factor an automatic in your book?
Colleen: I’m not sure it’s automatic, but it is overwhelming.
We all feel an overwhelming desire to give back to those people who have first given something to us. If we make ourselves the go-to person our clients rely on for the professional and personal resources they need to succeed, then they are much more likely to send us referrals.
It’s a question of positioning ourselves not just as a sales rep, but as someone who adds value to all areas of their business. Those people to whom you deliver value outside of your product or service tend to give you more referrals than those you don’t.
Q: So you want us to help our customers in unexpected ways as a matter of practice. Is that the only way to increase our referrals?
Colleen: No, there are a couple of other things we can do as well. One is to understand that clients who are emotionally connected to you will give you as many as 46 per cent more referrals than clients who are merely satisfied. So how can we create that emotional connectivity?
One way is to recognize, appreciate and celebrate your clients in personal ways throughout the year. Send them a personal thank-you card whenever they make a purchase from you. Or recognize them on their birthdays or special holidays.
This shows your customers that you care about them not just when they have money to spend. You care about them as human beings. Then people will start referring your business proactively, rather than you having to ask, “so who else do you know?
Q: Is that something you do routinely in your business?
Colleen: Definitely. For example, we always send a Valentine’s Day card to our customers with a piece of chocolate in it, telling them how much we love having them as customers.
Without fail, when we do this, we always get a few calls back saying: “I’m glad you sent me that card, because we need to do some sales training” or “you really should be talking to Jim over at XYZ company.” Or sometimes we just discover that one of our clients has gone to work for someone else and they refer us into their new organization.
Another technique that’s a little more direct is a letter writing campaign. The client I mentioned earlier who put an extra $17,000 in commissions in her pocket sends a letter to all her clients that says: “Thanks for doing business with me. As you know, you were referred to me by Bob Smith. Referrals are one of the best ways I have to find business, so if you send me a referral that converts into business, I’d love to treat you and your family or you and your partner to free lunch at…” a favorite local restaurant or neighborhood hot spot.
At the bottom of that letter, she leaves five spaces for people to write in a name, phone number or e-mail address, and she sends it with either a self-addressed stamped envelope or a fax number where they can send it back.
Every time she does this, she gets at least three or four referrals and closes one or more of them. In most cases, she’s seeing about a 3:1 closing ratio, so when a customer sends her three leads, she generally closes at least one.
Q: What about the good old-fashioned approach of just asking your customer if they know anyone who might benefit from your services?
Colleen: I’m not a big fan of that approach because it’s too general.
I would much rather you do your homework in advance so you can say to your client: “Dan, I’ve been trying to meet Bob Smith, the VP of Sales at the company down the road. Do you know him?” Or “I think your branch office in Calgary would be a good fit for our business services. Can you introduce me to the General Manager there?”
Generally speaking, you’re much more likely to get a referral if you tell someone directly who you want to be introduced to. Most people, when they’re faced with the “so who else do you know” question, just draw a blank.
Its not that they don’t want to help you. It’s just that they can’t think on their feet that quickly and so they tend not to give you the names you really want.
Q: That’s a great point. My last question is this: what if I am brand new? I don’t have any customers who can give me referrals. I’m at ground zero. What do I do then?
Colleen: That’s a great question, and one that happens all the time. Let’s talk about a couple different scenarios.
First, let’s say you’re brand new to sales – for example, say you sell scheduling software to dental offices. You personally don’t have any referrals, but you have this territory in Chicago that you’re selling to, and you have all these dentists you need to call.
If you or your company knows a dentist in New York who can give you a testimonial, then you can create an introduction to new clients using that as a reference. For instance, you could say: “Hi, I’m Colleen Francis with ABC Software Company. We work with dentists in North America who say that our software helps them to…” etc.
You can use this testimonial to get in the door, which helps to reduce the sales cycle. Although you don’t have a local referral that dentists in Chicago are likely to believe, the good thing is what dentists in other parts of the country are saying about you.
Q: Always do what you can to invoke the word of a satisfied customer, because nothing is more powerful.
Colleen: Exactly. Especially if those customers are in the same kind of market as the people you’re trying to go after.
Another thing you can do if you’re new to a company but not new to sales, is go back to your original customers and ask them for a referral. Tell them: “I know you were happy with me when I sold you some insurance services. Now I’m selling staffing services, so could you refer me to your VP of HR and let them know that you were pleased with my contributions?”
If you’ve developed some really good personal relationships along the way in your career, don’t hesitate to count on those people to refer you to the appropriate new contacts inside their organizations.
Q: And you’re entitled to make that request – after all, you’re the one who’s been sending them all those greeting cards and Valentine’s Day chocolates, right?
Colleen: Right! Remember, we all go by people first. So even though your previous client might not be the right decision maker now, they may be willing to refer you to the people who are.
Q: It’s all about getting those referrals, folks; it’s the easiest way to get new business. Any last words, Colleen?
Colleen: Well, I think that everyone owes it to themselves to find a way to get referrals every single day. Prospecting every day is the most critical part of your sales regimen, and if you can find a way to do it through referrals, then you can sell more in less time and have a lot more fun doing it.
Q: Fun, that’s the real key. Colleen Francis, it’s been great speaking with you.
Colleen: It’s great talking to you, Dan. Thanks for having me.