Anyone who is experienced and successful in referral marketing will tell you that sales skills are absolutely required. They’re needed in every part of the process—not just in closing the sale with the prospect.
First, you have to sell yourself to your potential referral source; she has to buy the concept that there’s value in introducing you to someone she knows. A referral is not a guaranteed sale; it’s the opportunity to do business with someone to whom you have been recommended. You still have to close the deal, most of the time. You have to make it clear that you know how to sell, that you can and will provide the products or services you are expected to provide, and that your customer will be happy with both the process and the result—. This will reflect favorably on the provider of the referral. If you can’t make that first “sale,” your potential referral source won’t become your referral provider, because she won’t be inclined to risk her relationship with the prospect. That is, she won’t do her part to sell the referral.
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In a study I conducted as part of my doctoral studies in the early nineties, I found that approximately 34 percent of all business referrals turn into sales. Another doctoral student replicated my original study in 2006, and the findings were almost the same: around 34 percent. This is an outstanding number but it’s still not 100 percent.
Therefore, sales skills are still important in networking. Some people are better at closing sales than others. Having the knowledge and skill to generate the referral, then having the knowledge and skill to close the sale, gives the businessperson a one-two punch. There are countless books, classes, and seminars on the subject of closing a sale. You can take classes online or on campus, where some larger companies even offer classes onsite to their employees. You can attend a seminar that lasts a couple of hours or a couple of days. Online seminars (often called “webinars”) abound, and many offer related online communities so you can interact and exchange ideas with “virtual” peers.
Second, you have to sell yourself to the prospect in order to get that first appointment. Yes, the referral helps a great deal, but you’ve still got to convince the prospect that the appointment is worth his time and likely to result in a favorable outcome. You should avoid being aggressive, indecisive, or evasive at this point; the prospect, having been in contact with your referral provider, is expecting a high level of respect and professionalism in your approach. You can and should be confident that a mutually beneficial deal is in the works, and you should communicate this to the prospect by your attitude and actions. Strive not to embarrass your referral source.
Third, once you have made the appointment, you have to persuade the prospect to buy your product or service. This is the part that usually comes to mind when one hears the word “sale.” Your integrity is paramount at this stage. The prospect should know exactly what to expect—no hidden charges, no unexpected exceptions, no bait-and-switch.
If you’ve created a highly efficient system of generating referrals for your business, you will see a steady stream of referrals being funneled to you. This does not guarantee that you will be capable of closing any of them. You’ll need sales skills to turn prospects into new clients, customers, or patients.
Note, however, that in referral marketing, closing the deal with your prospect is neither the beginning nor the end of the selling process. In order to get to this point, you will have made at least two other sales, as noted above. And in order to build and maintain the long-term relationships that characterize referral marketing, you have to follow up with both your new customer and your referral provider, again, part of the total sales process.
Remember, the number one rule in referral marketing is to make your referral provider look good. You need to demonstrate that you know how to sell to the prospect in a way that doesn’t embarrass the source of your referral—that you’re going to consult with the prospect, discover his needs, offer solutions based on those needs, give him some options, and not force a sale if you know you can’t provide a good solution. On the other hand, if your technique is to hold the prospect hostage at his kitchen table until he breaks down and buys, your referral source will not pleased that you’ve abused your relationship with him and damaged his relationship with the prospect. You may get the deal, but you’ve shut yourself off from further deals with that client—and with any future referrals from your source.
The message about sales in referral marketing is this: If you’re not comfortable in sales or if you haven’t been professionally trained, sales training is an investment worth your while. Keep this message in mind and it will serve you well in every aspect of relationship marketing and referral networking.