By Ivan Misner & Vince Vigneri
When one of your business relationships passes you a referral, don't assume that the prospect is ready to hear a presentation on your product or service. When an associate passes you a referral, say thanks . . . then start digging for more information.
You will want to determine if what you offer is a fit for what the prospect needs. Taking the time to do this upfront saves a lot of time and energy--for both you and the prospect. Exactly what does the prospect do? What products or services does he want from you? Will your offerings truly fulfill his needs? What is his behavioral style? What are his business goals? How large is his company?
Even with the referral in hand, don't skip steps in your sales process. Before you approach the prospect, decide on a strategy based on whatever you can find out about him--the same as you would when preparing for any sale. Although the prospect was referred to you, all you've really received is an opportunity to approach the prospect with a favorable introduction. (This is not a bad thing--a single referral can open the door to a prospect it may have taken you weeks, months, or even years to connect with--if you even could at all.) But whether the prospect becomes a client or not depends on how well you convince him that what you offer, at the price and under the conditions that you offer it, will fulfill his needs.
There's quite a bit of difference between a basic referral and one that's well developed, and there are many levels in between. Here is a list from least to most valuable, and you should consider which level your referral represents:
- Name and contact information only. Unfortunately, this is what many of your potential sources probably think the first time you say the word "referral" to them. It does represent a certain level of trust in you, but the networking value of this kind of "referral" is low. It's better than nothing--but it's not much. As a matter of fact, I would call this more of a "lead" than a "referral."
- Authorization to use name. If he says, "Tell 'em Joe sent you," you can be fairly sure you've established a good level of credibility with him. This gives you some leverage, but the work of developing the prospect still falls on you.
- Testimonial or letter of introduction. If your source trusts you enough to say nice things about you, try getting him to go a bit further and write you a letter of introduction or recommendation, including background information on you and some words about your product or service.
- Introduction call. A personal phone call on your behalf, preparing the prospect to hear from you, takes significant time and effort in preparation.
- Letter of introduction, call and promotion. A letter that's followed up by a phone call advocating your business represents a high level of commitment by your referral source and has a great deal of influence on the prospect.
- Meeting. By arranging and working out the details for a meeting between you and the prospect, your source moves beyond the role of promoter to that of facilitator, or even business agent. This demonstrates to your prospect a deep level of trust in you, and a willingness not only to make an introduction, but also to consider you and your services worth the time it takes to coordinate a meeting.
- Face-to-face introduction and promotion. Combining an in-person introduction with promotion demonstrates that your source is engaged in selling your product or service, rather than just facilitating your sales effort. And this is a pretty great referral, beaten only by the…
- Closed deal. Your referral source describes the features and benefits of your product or service, then closes the sale before you even contact the prospect. All you have to do is deliver the goods and collect the money. This is obviously the best kind of referral you can get (and, by its very nature, the rarest form of referral). To get to this level of referral, you'll have to work with your sources and tell them what you'd like from them. This takes time and education.
The better your source knows you and is confident of your character and your business, the more often you'll get the higher-level referrals. But keep in mind that you need to be making high-level referrals for your sources, too. Make sure you spend your due diligence looking for ways to open doors for your referral sources in the same way as you hope they will open doors for you. What goes around comes around.