How to Get Referrals in Sales

A salesperson is four times more likely to close a sale to a referred lead

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Table of Contents
Table of Contents

Referrals—otherwise known as getting someone you know to give you warm leads to new prospects—are valuable for salespeople in all industries.

Data from Nielsen shows that a salesperson is four times more likely to close a sale to a referred lead as opposed to a cold lead. That means you can generate four times as many sales if you focus on getting referrals than if you spent that time cold calling. That's a huge opportunity to increase sales (and do less cold calling). Fortunately, there are opportunities for referrals all around you.

Existing Customers

Your own customers are the easiest and friendliest referral source. In fact, if you treat them right, they may well go out and do some selling for you. That's when you get those wonderful windfall calls from someone's co-worker or uncle saying, “I hear you sell the best widgets in town. I'd like to buy 40 of them.”

Don't wait for your customers to do all the work for you—pick up the phone and ask for the referral, or send them a referral request letter. It's a good idea anyway to check in with your customers a few weeks or months after the sale. You can ask them how they're enjoying the product, find out if they have any questions, and then pop the question: "Who else do you know who can benefit from this product, as you have?"

According to Nielsen, 92 percent of consumers trust referrals from people they know.

New Customers

Just after you've closed a sale with someone is the best time to get referrals from them because they're excited about their new purchase. Some salespeople are nervous about asking for referrals at this point because they just want to get out of there in case the prospect changes their mind. Unless you've used high-pressure tactics to intimidate someone into buying (don't do this), your new customer is probably thrilled and enthusiastic. Hit them up for a referral right away, while their energy and excitement are at their peak.

Word-of-mouth referrals are the main driving factor behind 20 to 50 percent of all purchasing decisions, according to McKinsey & Company.

Prospects You Couldn't Close

If you pitch a prospect and they turn you down, don't just bolt out the door. Get a referral or two, and you'll have changed a loss into a win.

You may be shaking your head and thinking, “That's crazy-talk. Why would a person who wouldn't even buy from me give me referrals?”

A lot of sales fall through not because the prospect dislikes you or your product, but because they just aren't a good fit. In that case, it's the perfect opportunity to find out if they know someone who is a good fit. Don't assume the prospect doesn't like you and your product. You have nothing to lose by asking.

Seventy-seven percent of consumers are more likely to buy a new product after learning about it from a friend or family member, according to Nielsen.

Everyone Else

Literally, anyone you meet under any circumstances can give you a referral. After all, the average person knows in excess of 250 other people. Do you really think that none of those hundreds of people are a good fit for your products?

Ask everyone—your dry-cleaner, accountant, neighbor, even the person standing behind you in the supermarket checkout. You'll be amazed at how many leads will drop into your lap as a result of a brief conversation.