IncentiveFox
What 89% of salespeople are failing to do...
According to Dale Carnegie only 11% of salespeople ask for referrals. We all know how valuable referrals are but when it comes time to ask for a referral or dig back into the CRM for old customers, we sweat. Let’s explore the 4 reasons why 89% of salespeople fail to ask for referrals and how to change them.
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Lack of Commitment
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ISSUE - Referrals are a passive process vs. a proactive process. We are delighted when we get them, but we do not invest too much energy into them as salespeople since they rarely pan out and we seldom see them as a real business practice.
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FIX - Make a weekly, monthly and quarterly goal for referrals with actionable steps to take each week. These steps can be as simple as reaching out to 3 previous customers each week or to a local charity or organization to show them how committed you are to community development and referrals.
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Fear of Rejection
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ISSUE - No one wants to be turned down and asking for a referral runs the risk of rejection. Salespeople often feel they’re overstepping the relationship by asking for a referral but going in with that mentality only adds to the issue.
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FIX - According to Dale Carnegie, 91% of customers are willing to refer, yet only 23% do. This gap exists due to the failure to simply ask and follow up with your customers. When we begin to accept and understand that customers are happy to refer our services if they’ve had a positive experience, it allows salespeople to let go of the fear that they are “bothering” them.
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Thinking Great Service is Enough
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ISSUE - Most salespeople are under the illusion that “If I offer my best service and go above and beyond, I’ll get referrals.” Which would be lovely but we live in a world where our customers are busier than ever with their own lives, so our service oftentimes isn't enough.
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FIX - Consistent communication and customer “upkeep” will have you in the forefront of your customer’s mind the next time their neighbor asks them “How do you like that new car? I’m thinking about getting a new one…but I’m not sure where.” Furthermore, knowing and understanding your customer’s preferred contact methods will help you stay off their don not call list. Would they prefer a text, email or phone call? Maybe a big chunk of your audience follows your Facebook page? Make a commitment to email or post at least 2 times a month and tag a few friends or loyal customers in each post.
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There is No Systematic Approach
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ISSUE - Asking for a referral can often feel like a shot in the dark. We’ve all been in a place where someone referred a friend and never received their reward. Unfortunately, this leads to a very angry customer, often more upset than if their product was damaged. That alone can make the process seem daunting, overwhelming and not worth it.
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FIX - When there’s an expected procedure in place that streamlines the process, this ensures both the referred customer and referrer are managed properly, it allows the salesperson to feel confident in their ability to ask for referrals and fulfills the promotion promises. Additionally, you never lose focus on giving their referral a best in class experience. According to Wharton School of Business, only 30% of companies have a formalized referral program, despite the fact that referral business experienced 86% more revenue growth over a two-year period. A homegrown referral program can be enough, but it’s a big commitment for a dealership's marketing and IT team to manage without help. Incentivefox’s Referral Rewards Solution allows dealerships to bring their often out-of-date referral programs into the digital era and formalize a process that is easy-to-use!
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Are you ready to improve your sales strategy and turn 2018 into a referral generating machine, check out our blog and follow me on twitter for best practices, hints, and tips on driving more referrals and customer loyalty in 2018!
RELATED: Help: Confused/Weak Referrals
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8 Comments
Chris Murray
Independant
With all due respect a true professional never needs to ask for, beg for or solicit referrals.
The level of professionalism, the experience and the constant attention to the customer negates the need to 'prospect for referrals" only the less than adequate salespeople need a process as you describe.
I feel this way based on my personal experience as a salesperson and having had the pleasure of managing some of the most talented people in our business.
John Turner
Hi. Chris, All I have to reply, based on my almost 19 yrs of selling cars, is that your wrong. You seem to be a very confident and intelligent young man but what I just read was ignorance. Asking for refferals does work and if you truely take care of your customers they will send everyone they know to you. Don't think so? Prove us wrong. Try it.
Chris Murray
Independant
John, I am 55 with 35 years in the business. I need only to relay my experience at running one of the largest and successful sales organizations in the US. So, young man, go forth and beg while the winners simply receive.
Amanda Gordon
Self
I have to agree with the Gentlemen on this one. Being a 16 year vet and seeing the industry change drastically with the advent of the internet, referrals are the only constant and I have NEVER had to ask, they show up because the person who referred them knows they will not receive the same treatment, service and respect they deserve anywhere else.
Kristen Tepper
IncentiveFox
Love all the feedback! I think everyone here has extremely valid points! There is a specific subset of salespeople who are so skilled, respected and knowledgeable about their work that they are always referred by their most loyal customers. But where a referral program really comes into play is for
And can we really say (and prove) that every single customer that we've had a good/great interaction with has sent a referral our way?
This is really where the focus of a referral program (backed by data) and consistent outreach comes into play. There are customers who are satisfied but busy or just not overtly proactive people but when we openly express that we appreciate their business so much that we want to show their appreciation by not only taking care of their friend but giving them a thank you in the form of a reward/incentive, by nature our extrinsic motivation kicks into high gear and can increase participation from more parties.
The incentive theory of motivation suggests that we are more likely to complete an action that is positively received or profitable. Simply put, we derive motivation from rewards. Dr. B.H. Skinner supports this theory, stating that a positively enforced stimulus combined with a positive outcome equals a higher re-occurrence of the desired action; that is to say, when we are motivated to take an action and then rewarded positively, we are inclined to repeat that action, whatever it may be.
Chris Murray
Independant
Kristen, my concern is data. If you can demonstrate scaleable results then who is to argue with you? The downside is moral. My estimate is less than 1% will actually refer a friend by name and so that would be the lowest closing percentage in our industry. Does it make sense to have a "green pea" breaking his pick on those results?
There are far better pursuits, in my opinion.
Kristen Tepper
IncentiveFox
It seems pretty bold to say that a pursuit known for driving more gross profit (NADA), being 4x more likely to purchase (Nielsen) and having a 51% service usage compared to a 29% service usage (NADA) against other leads isn't a worthy pursuit. And if a pursuit like this isn’t worth it, what is?
Furthermore, I suppose even as a “green pea” what is the harm in mentioning that you appreciate referrals if they know anyone in the market for a new vehicle? It takes 10 seconds to mention in-person and maybe 2 minutes to call and/or email with a follow-up. Even if you say it to 100 people and you get 1 referral, was that time of asking worth the extra $XXX in sales commissions for the referral sale? Because what else would that rep be doing, waiting for their fresh up to show on the lot?
Scott Larrabee
Offer great service so you don't have to ask, but ask anyway! :)