By Joanne Black,

Want predictable revenue? Don't just tell your reps to ask for referrals.

For your team to make referrals happen, you have to show them how. You need a systematic, disciplined referral-selling strategy that includes goals, metrics, and accountability for results. Once you commit to referral selling, watch out. You’ll have more business than you know how to handle.

Don’t believe referrals scale? Then you don’t understand referral selling. Referrals are the most effective way to generate qualified leads. Referred prospects are pre-sold. They consider us experts, value our time and ideas, and actually want to hear from us—which is why they convert into customers more than 50 percent of the time.

Referral selling is a scalable and predictable prospecting strategy. But 95 percent of companies don't have a well-developed referral process. Their sales teams waste time cold calling, when they could be filling their pipelines with hot referral leads.

When you adopt referral selling as your primary prospecting strategy, your competition is toast. You get in early with the right person, develop the relationship, clarify the need, and set the standard by which others are evaluated. In most cases, your competition never even gets a meeting.

From Lucky Break to Proactive Prospecting

Even if you rarely ask for referrals, when you do a good job for your clients, people will occasionally send referrals your way. But what if referrals weren’t just a random, lucky break? Imagine the impact on your sales, revenue, and profits if your team asked every single customer, colleague, and friend for referrals. That’s how you scale referral selling and actually get predictable outcomes.

Still skeptical? For the past 19 years, sales leaders and salespeople have told me that when they receive an introduction to a prospect, they close business at least 50 percent of the time (most say 70 to 90 percent).

Here's how the numbers add up (a conservative estimate) if your goal is to get 20 new clients:

• Ask 80 people for referral introductions.
• Half of them make perfect introductions for you. (The rest can’t think of anyone right now, or maybe your relationship isn’t as strong as you thought. Bummer.)
• With a 50-percent conversion rate, you soon have 20 new customers.

And they're not just "any" customers. They're your Ideal Clients. The ones with the big bucks. The ones who value what you offer, treat you well, tell the truth, and pay you on time (maybe even a little early). Not only does your sales process shorten, but you've built new and stronger relationships with your network. You haven't added to your payroll, and your competition is non-existent. You bet referrals are predictable!  

Scaling Referrals: What’s Standing in Your Way?

Your team knows a lot of people, who in turn know a lot of people. So, why aren't they getting referrals? Consider the following:

1. Who Are They Asking?
Your team hasn't identified everyone they know. Their job is not to evaluate whether people would be great Referral Sources. Their job is to get their contact lists together. Your job as a sales leader is to help them understand that everyone knows someone, and referrals often come from the most unexpected places.

2. When Are They Asking?
Many salespeople wait to ask for referrals until they have closed a sale or implemented their solution. This harkens back to old insurance tactics, when an agent would deliver a policy and then ask the client to send a letter to 10 or 20 of his best friends. That’s a disrespectful ploy—and a waste of valuable referral opportunities.

Reps can ask for referrals anytime during the sales process when they deliver value. How will they know they’ve earned the right to ask? Most likely, the client will say “thank you”—for a good idea, for delivering useful information, or for sharing expertise.

3. How Are They Asking?
Most salespeople ask for referrals this way: “If you know anyone who would benefit from my services, please send them my way.” This does nothing except allow reps to say, “Phew, I asked. I can check that off my list.”

The better approach is for salespeople to describe their Ideal Client and then ask, “Who are one or two people I should meet who fit this description?”

4. Are They Asking for Introductions?
It’s not enough to just get names and contact information. Without introductions from Referral Sources, reps fall into the cold-calling trap. If prospects don't know them and don't expect to hear from them, their outreach is ice cold—whether they’re communicating via phone, email, social media, or an old-fashioned knock on the door.

5. Do You Have a Referral Process?
If you’re just telling your reps to ask for referrals, you might get a live one now and again. But that's not a prudent method to grow revenue. Want predictable outcomes? Integrate referral selling into your sales process.

Do you have:

• A written referral sales plan?
• Written weekly referral sales goals—for individuals and for the team?
• Metrics to track and measure referrals?
• Accountability for results?
• A system in place to reward employees for generating referrals?

If you answered “yes” to all of these questions, congratulations! If you answered “no” to even one, it’s time to focus on creating a disciplined, measurable referral program.

Start by taking my Referral I.Q. Quiz. This 14-question assessment will not only help you evaluate your sales process; it’s also your checklist for referral selling.

Forget Cold Calling—Referrals are HOT, HOT, HOT
Referral selling transforms everything it touches. When you commit to referral selling and integrate it into your sales process, your team will bring in more qualified leads, foster better long-term relationships with customers, decrease your cost of sales, and generate more revenue than ever before. And best of all, your reps will never have to cold call again. Why would you spend time doing anything else?