Friday, October 26, 2007

Building Referral Business

This week we're talking about W. Edwards Deming's quote about profit in business coming from repeat customers. Today, we'll address how to get your customers to "bring their friends with them" through referrals.

Referral expert Paul McCord has some useful insights:

"Acquiring referrals from clients is not as simple as 'doing a good job' and then asking for referrals," says McCord. "Generating a large number of highly qualified referrals from a client is a process that starts from the moment the prospect is first met, not a one-time act after the sale has been completed. It requires an understanding of what a successful referral is based on, and how to exploit the referral to insure a successful contact with the referee."

Here are McCord's 4 Pillars of a Successful Referral:

Your Relationship with Your ClientYour relationship with your client must be built on trust and respect. Most clients will not give referrals to people they trust and respect unless they trust and respect you.

Your Client's Purchasing ExperienceClients assume that whomever they refer you to will be more critical and more demanding than they themselves have been. Consequently, you must provide the client the exact purchasing experience they want and demonstrate that you will not embarrass them in front of their friends, family, co-workers and acquaintances.

Your Client's Relationship with the Referred ProspectWith a referral, you are trying to build a relationship with the referred prospect based on their relationship with your client. You must know the relationship between the two. If the prospect trusts and respects your client, you begin your relationship with that prospect with some of that trust and respect imbued to you. Likewise, if the prospect distrusts and disrespects your client, you begin the relationship with some of that distrust and disrespect imbued to you. You must know where you stand with the prospect before you contact them.

The Method Used to Contact the Referred ProspectBased on the client/prospect bond, you must determine how best to contact the prospect to produce the greatest opportunity to acquire a meeting. If the client/prospect relationship is extremely strong, virtually any contact method, including a phone call from the salesperson mentioning the client's name will suffice. But, for a weak relationship, the rep must strive to use the strongest contact method possible, such as, a client letter or phone call, or a lunch meeting between the client, prospect and rep.

Author of "Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals," Paul McCord is president of McCord & Associates, a sales training and management-consulting firm.


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