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By: Alice Heiman
Categories: Building Relationships, Closing the deal, lead generation, Sales, Sales leadership

We all love it when we get a referral. Someone we did a great job for tells others and is more than willing to make an introduction for us. These people come to us more ready and willing to share their needs, listen, learn and buy. 

Why are Referrals so Powerful?

  • People are 4 times more likely to buy when referred. (New York Times) 
  • Customers trust recommendations from friends and family more than any other form of advertising. (Neilsen) 
  • 83% of consumers are comfortable making a referral after a positive experience. (Texas Tech University) 
  • A referred customer is 18% more loyal than a customer acquired through a different method. (Journal of Marketing) 

Since referrals have a much shorter sales cycle and higher close ratio you’d think we’d all be out asking for more. Sadly, we are not because most of us are very uncomfortable asking.  

Don’t be Awkward! 

I will tell you this much if you want more referrals you have to ask. If you ask, you have to do it at the right time with the right words – Don’t be awkward!   

Once you ask and they agree to make an introduction, you need to make it easy for them. Decide on the best way for them to make the referral and what they should say. I even go so far as to write an email they can use to introduce me, of course giving them liberty to edit.  

Asking will bring you more referrals and taking care of those who refer you will give you even more.  

In this article, I want to be sure you take care of the referrals you get and do such a great job that more keep flooding in. 

6 Steps for Caring for Referrals

Step 1) Say Thank You

Thank the referrer – I like to send a handwritten note but an email works too.  

Step 2) Contact Them

Contact the referral – many times an email will be sent to introduce you. (TIP: when you reply put the person who referred you to BCC so their inbox isn’t cluttered with your conversation with the person they introduced you to. If you initiate the email, still put the referrer on BCC.) 

Hello, 

Jim, thanks for the intro and your kind words of introduction. Putting you on BCC to spare your inbox.

Ben, nice to meet you and Susan. I’ve done a bit of research on your company and look forward to learning how I can be of help. Are you available for a 30-minute conversation on Tuesday at 2 or 3 p.m. Pacific or Wednesday at 1 p.m.? 

Alice 

Step 3) Let the Referrer Know

Once you have had a conversation with the referral, let the referrer know that you have successfully connected, what happened and the next step if there is any.  

Jim, 

Thanks again for the referral to Ben and Susan. I spoke with them yesterday and we are scheduled to have a second conversation. I appreciate your introduction and I’ll keep you posted. 

Alice 

Step 4) Keep them in the Loop

If there is a long sales cycle, keep the referrer in the loop as you move to the next stage. 

Step 5) If You Win

If you win the business send a thank you note, a gift or maybe a referral fee. (See section below on referral fees.)  

Step 6) If You Lose

If you lose the business send a thank you note.  

Jim, 

I had a few great conversations with Ben and Susan but it turns out I don’t have a solution to meet their needs. I did refer them to someone I feel can help and they are thankful for the introduction. I am sure they will keep you in the loop. Even though we didn’t end up doing business it was great to meet Ben and Susan and as always, I appreciate your referrals. Let me know if there is anything I can do for you.  

Alice 

Thank Yous, Gifts and Referral Fees 

If you have done a great job people are happy to refer you. Most people feel great about referring you because they know you can help the people they refer you to.  

Thank Yous

Keeping them informed of your progress, letting them know you delivered the quality they are used to and writing a thank you note is expected.  

When someone refers you, they are putting their reputation on the line. Please respect that. They are going out on a limb, trusting that you will follow through and do a great job.  

Most of the time when I refer someone by making an introduction and stating that this is a trustworthy person, I am happy to do it to help everyone out. That said, I still appreciate a thank you and I expect to know the outcome of my introduction. In fact, I’m kind of persnickety about it. If you don’t thank me or tell me the outcome, you will never receive another referral from me again. There is nothing worse than having to get in touch with the person you referred to ask them if they ever followed through. It’s embarrassing. So be sure when someone gives you the precious gift of a referral that you follow through and let them know that you did.  

Gifts

People don’t expect a gift for speaking highly of someone, recommending them or making an introduction. However, sometimes a gift is warranted. If someone makes an introduction for me that turns into one of my largest deals of the year, I would take them to dinner or send them a very nice gift. Gifts can range from their favorite wine or chocolate to a gift card to take their family to dinner at their favorite restaurant.  

Referral Fees

In some cases when someone refers you, you will pay a referral fee. This is typically prearranged and agreed on, however, I have received checks in the mail from people who landed a large deal because of my introduction and assistance. I wasn’t expecting it, but they felt it was the right thing to do. In those cases, it is because I went further than just making the introduction. I lent a hand during the sales process by checking in along the way, making assurances and offering up advice where needed.  

You may want to find a few trusted partners and make referral agreements with them. That way, when you refer them to someone you will reap the reward.  The percent agreed upon usually depends on how much work you do. A basic introduction with your recommendation could be 5 to 10 percent. Sometimes I am able to all but close a deal for one of my partners and in that case, I’ve done the selling work and they pay a higher percent, usually somewhere between 15 and 25 percent.  

Get More Referrals

I encourage you to figure out a process for your company to make sure the referrals are flowing in. Referral business has a higher value, shorter sales cycle and higher rate of close. Why wouldn’t you capitalize on that? Whether you set up formal partnerships to receive referrals or ask satisfied customers and then thank them with a note or gift, make sure everyone in your company is helping bring those referrals in. Set up a process, train everyone and figure out how to encourage and reward the people in your company for asking for referrals.  


Do you want to shorten your sales cycle and close more deals with referrals? Then schedule a time to chat and we’ll help get you started.

Alice Heiman
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Alice Heiman

Founder and CSO at Alice Heiman, LLC
Alice Heiman has been helping companies increase sales for more than 20 years. Her innovative sales leadership programs, coupled with her top-down approach to creating long-term change, set up sales leaders and sales-managing business owners to get consistent and sustainable growth.
Alice Heiman
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