Many managers will encourage, or even require, their salespeople to ask their prospects and customers for referrals. On the surface, this seems like a good strategy to increase business. “You won’t get anything if you don’t ask for it” is the old adage that fuels this approach.
Unfortunately, there are a number of ways this approach damages the relationship and does more harm than good. In fact, I would say that this “advice” from well-intentioned managers is the worst sales advice ever!
Let’s put this into context. You go out and meet with a new prospect. You have a good conversation. You establish a connection and start to establish some trust. Remember, your goal is to establish yourself as a trusted advisor and resource to your prospect. The meeting goes well and so at the end of the conversation, you say, “Do you know any other people who would be a good fit for me? I appreciate any referrals you could provide.”
In that moment, what have you done? You’ve applied sales pressure. And sales pressure does what? It stresses the relationship and causes your prospect to feel “put on the spot.” All of your goodwill up to that point is now nullified. You aren’t a trusted advisor who is looking after your prospect’s best interests at all. Instead, you now appear to be just another salesperson looking after your own interests. In the prospect’s mind, you quickly get sent to “Vendorville,” as your actions are that of a typical salesperson. The sales pressure is off-putting and makes your prospect feels like you don’t have his best interests in mind despite what he may have thought prior to the last two sentences you uttered.
So besides the wedge that you’ve just created between you and your prospect, what else happens? Typically, the prospect will respond to your request with a “Let me think about it. I’ll have to get back with you on that.” Clearly, they are giving you a stall tactic to just get you out of there. If this is the case, how do you think he will respond the next time you call? Most likely you will be avoided. You will forced into “chase” mode and you will wonder why the prospect is not answering your calls or being short with you when you do connect.
If the prospect doesn’t stall, it’s likely that any referral he gives you is not a quality one. Why should your prospect risk his hard-earned relationships with you (someone who has not proven himself or whose services he can vouch for first-hand)?
Still not convinced that asking for referrals is bad for business? If you’re an old-school sales type, here’s your challenge. Let your data speak for itself. Review your results. How many times did you not get a referral when you asked for it? That answer alone should be very telling. For all of the times you didn’t get a referral, you can be confident that you left the call with a damaged relationship. Was your “ask” worth it?
And for the referrals that you did receive, how many of them were “quality” referrals that actually led to closed business? Now, compare that list to the referrals that you earned (without asking and applying sales pressure). What’s the difference in these two categories?
In the hundreds of companies I’ve worked with, I’ve never had one salesperson who could support the benefits (by the numbers) of asking for referrals. On the contrary, I’ve been told countless times by salespeople that if their manager requires them to “ask,” that they will often enter it into their CRM system that the prospect didn’t offer any (even when they did not ask).
So why would a salesperson not “ask” when they are being ‘required’ to do so by their manager? The answer is obvious. Intuitively or by past experience, the salesperson knows it will damage the relationship and destroy the goodwill they worked hard to establish. They know asking for a referral will put pressure on the prospect which will make both the prospect and the salesperson feel uncomfortable.
So here’s a simple approach, instead of “asking” a prospect or client for a referral at the end of a meeting, how about asking, “Is there anything I can do to help you?” The difference in the response and the impact on your relationship will be amazing.
