I recently switched car insurance companies. The reason why was strictly due to price. I had switched a year earlier at the request of my wife. “One of our neighbors has become an insurance agent wouldn’t it would be nice if we could help him out”, she said. A year later that gentleman no longer lives in our neighborhood or works for that insurance compay, and the insurance company decided out of the blue to raise are rates. So I went shopping. I finally decided upon a new insurance company, they are supposed to be there for me like a good neighbor, we see about that.
The agent who sold us our new policies did a good job. Remember, its insurance, not much to blow your mind with. As we finished the last piece of paperwork she asked if we had any other questions, we didn’t. As we were about to leave she left us with this nugget. I knew it was coming, I’ve heard it before, in fact its the same pitch you often hear. “If I’ve done a great job for you guys today please tell your family and friends, give them my card and you can get a $25 gift certificate for gas or a restaurant of your choice,” so went the pitch. I cringe every time I hear it. To be fair insurance people are not the only ones who do it, I’ve heard it from a host of other salesmen and women looking to increase their sales by the magic of referrals. The problem is you’re right at the beginning of the relationship, I don’t know if I’ve made the right decision myself, let alone telling all my friends about you. What if I find that I’m not in good hands, then what. I just told all my friends and family that you were the best I know. Can I risk a possible friendship because you weren’t. I’m a mama’s boy, the last thing I want to do is make mama mad.
Dont get me wrong, referrals are the life-blood of any sales professional that hopes to make it in the sales business. That being said, there is a proper way and an improper way of asking for that referral. I hope to shed some light on this key tool for building business success. First, never never never ask for a referral after the first sale or first transaction if at all possible. Why, people can for the most part see right through this. Plus, nobody in there right mind wants to trouble their friends with finding new business for you. The last thing I want is a call from a salesman saying that my buddy Mike told him to call me about saving money on my car insurance. First, Mike and I don’t really talk about car insurance, we talk about guy stuff; not about how much comprehensive coverage we have.
So then, when should you ask for that referral? Only after you’ve established a SOLID relationship with the customer. After they seen you work for them on a number of different tasks or projects. Only after you and your company have proven yourself to that customer, only then should you ask for the referral. The absolute best time is after you handled an issue or problem for the customer and you have their appreciation for a job well done. Remember though, this shouldn’t be an issue that you or your company created. Asking for the referral after a boo boo you created might be the last straw for the customer to take their business elsewhere.
Then, be honest with the customer, tell them exactly why your need their help. Let them know that you are trying to build your business and that you would appreciate their help. If they are hesitant then stop and ask again at a later date. Dont push the issue as you don’t want to lose that customer you already do have. Plus, if you have indeed built and nurtured that relationship you’ll find that asking for that referral will be very simple. In fact in most cases they’ll make the sales call for you. “I’ll call my buddy so and so and tell them to give you a call” will be the typical response. Offer to follow-up with their friend in a day or two.
If you can be patient and build the relationship, a proven relationship, then referrals will be a well that you’ll be able to draw from again and again.