Episode #345: Nick Kane
Nick Kane is a founder and Managing Partner of Janek Performance Group, a leading sales performance organization providing sales training and sales consulting solutions. Nick has more than 25 years of experience in sales and is a thought leader and authority, supporting hundreds of clients in optimizing their sales performance. Nick co-authored the book “Critical Selling: How Top Performers Accelerate the Sales Process and Close More Deals,” and has penned hundreds of articles on sales performance.
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Referrals are a recommendation from a satisfied customer or trusted network of people you interact with, i.e. your center of influence. If you’re in sales and you aren’t asking your customers or sphere of influence for referrals, you’re leaving money on the table. But what are the best practices for asking for referrals? Nick Kane shares his referral-selling dos and don’ts in this episode of Sales Reinvented. Check it out!
Outline of This Episode
- [1:04] What are referrals? How do they work in sales?
- [1:34] Common mistakes salespeople make asking for referrals
- [2:21] How salespeople can leverage social media to generate referrals
- [3:10] Nick’s advice for those exploring referral-based selling
- [5:06] How to measure the success of a referral program
- [6:07] Best Practices: The right way to ask for client referrals
- [8:40] The role technology plays in referral selling
- [10:20] Nick’s top 3 referral selling dos and don’ts
- [14:29] A story that drives home the importance of creativity
Nick’s advice for those exploring referral-based selling
You have to make sure that you’re building strong relationships with customers, both existing and prospects. Provide excellent service and support and satisfy your client’s needs. How well do you understand their needs and pain points? Are you helping them solve their problems? A positive customer experience is the foundation of gaining referrals. Happy customers share information and open their networks to you. Secondly, you should create a referral program. Incentivize customers to send people your way.
Best Practices: The right way to ask for client referrals
Salespeople tend to ask for a referral at the wrong time. Make sure you approach the customer at the right time in the right way. How you ask must be genuine. You need to establish a relationship first. Make sure the customer has a positive relationship with you and that you’ve done good by them.
Salespeople also struggle to explain the value proposition and what’s in it for the customer. You need to find a way to make it advantageous for them to provide referrals. Ask tactfully and let the customer know what’s in it for both of you. Customers want their salespeople to be successful as long as you’re helping them to be successful as well.
Who are your loyal and satisfied customers? Who’s had the most positive experience and is most likely to refer others? Segment your database to understand who’s most likely to offer a referral. Who interacts with your prospect? Where are those conversations happening? How can you leverage influence from someone in a position of influence?
You can also customers who have already referred others to refer more people. If they’re willing to refer their network, it can expand your referral opportunities.
Why does Nick recommend surveying your clients regularly? Listen to the whole episode to learn more!
How to measure the success of a referral program
You should be tracking the number of referrals generated as a lead source in your CRM. Know exactly where those referrals come from. Follow each of those referrals through the pipeline. How many turned into opportunities? What is the size of those opportunities? How many converted into a sale? What is the customer lifetime value of the customer relationship? Treat the referrals as their own lead source and track them as such.
Nick’s top 3 referral selling dos and don’ts
Nick shares some strong dos and don’ts every salesperson should consider:
- Build strong relationships with existing customers by providing excellent service, excellent customer experience, and excellent support. Consistently ask for feedback to improve the customer experience. You need to be dedicated to serving your customers and helping them solve the problems and challenges they communicated during the sales process. You have to deliver on your promises to get referrals.
- Find a way to educate the customer on the benefits of the referral program. Share how it works, and how it benefits them, and make sure you’re consistently providing clear instruction on how to refer others. When customers understand your program clearly, they’ll be more likely to refer others.
- Timing is critical. If you ask too soon, you come across as disingenuous and pushy. If you wait too long, you might miss the window of when they were the happiest. Find the sweet spot to ask and ask tactfully.
- Don’t ask for a referral too early in the customer relationship. Asking too early might damage the relationship.
- Don’t assume that a customer is satisfied. Salespeople often mistake silence for happiness. Check-in and survey your customer consistently to make sure they’re happy and have what they need before you ask for a referral.
- Don’t be insincere. Try not to be pushy. Don’t offer incentives that might come across as inappropriate or unethical. Some organizations have specific requirements or rules around what someone can receive for referrals, so be aware of that.
Learn more from Nick in this episode of Sales Reinvented!
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Are there any books, podcasts, or classes on Referral Selling that you recommend?
- Janek’s Sales Performance Blog is a great resource to learn about referral selling as this is often discussed.
- Janek also covers referral selling in some of our workshops, such as Critical Account Planning and Critical Prospecting Skills
In the field of ‘Referral Selling’ – Who do you most admire and why?
- From my point of view, Referral Selling is all about deeply serving your customers and building trust. I admired Zig Ziglar and Napoleon Hill’s work in these areas as they focused on referrals as a centerpoint to their selling and client building strategies.
How can salespeople track and measure the success of their referral program?
- Keep track of the number of referrals generated and the number of referrals that convert into new customers.
- Measure the lifetime value of referred customers compared to non-referred customers to determine the value of referrals to the business.
- Track the source of referrals (e.g. email, social media, word-of-mouth) to identify which channels are most effective in generating referrals.
- Monitor the referral program’s impact on overall sales growth and revenue to determine its effectiveness in driving business growth.
What are some common reasons why customers may not provide referrals, and how can salespeople overcome these obstacles?
- Lack of trust. Fear of damaging relationships – Customers may be hesitant to refer others if they are concerned it could strain their personal or professional relationships. Lack of incentive – Customers may not see the value in providing referrals if they do not receive any tangible benefits or rewards in return. Lack of understanding – Customers may not fully understand the benefits of referral marketing or how to provide referrals effectively.
- Be genuine, considering timing of the referral ask and always act in your customer’s best interest.
What is the difference between a referral, an introduction and a lead? ‘
- Referral – A referral is a recommendation from an existing customer or a business contact to a potential new customer. The referral is typically based on a personal relationship and the referrer provides a direct connection between the salesperson and the potential customer.
- Introduction – An introduction is a connection between two people made by a mutual contact. An introduction may be less personal than a referral, as the mutual contact may not have an existing relationship with one of the parties involved.
- Lead – A lead is a potential customer who has expressed interest in a product or service. A lead may not have an existing relationship with the salesperson or the company.
How do you determine which customers to target for referrals, and what are some effective strategies for reaching out to them?
- Segment your client database.
- Personalize your approach: When reaching out to customers for referrals, it’s important to personalize your message and make it relevant to their needs.
- Offer incentives: Some customers may need an extra push to provide referrals. Consider offering incentives such as discounts, exclusive offers, or rewards for successful referrals.
What are some potential risks or downsides to relying heavily on referrals for new business, and how can sales teams mitigate these risks?
- Limited reach: Relying exclusively on referrals may limit your ability to reach new customers outside of your existing network.
- Over-reliance: Over-reliance on referrals may create a sense of complacency and a lack of focus on other sales and marketing channels. This can be problematic if the referral pipeline dries up or if the quality of referrals declines.
- Loss of control: When relying heavily on referrals, you may lose control over the sales process, as the referral source may have different expectations or preferences than your typical customer. This can lead to misaligned expectations and a less-than-ideal customer experience.
- Lack of scalability: Depending on the size of your network and the number of referrals you receive, a referral-based sales strategy may not be scalable in the long term. This can limit your ability to grow and expand your business.
Finally, what advice would you give to salespeople who are looking to launch a referral program or improve their referral generation skills?
- Set clear expectations: Be transparent with your customers and referral sources about what you are looking for in a referral and what they can expect in return. This can help manage expectations and ensure a positive experience for everyone involved.
- Follow up: Once you receive a referral, follow up quickly. Be sure to thank the referral source and keep them informed about the status of the referral.
- Offer incentives: Consider offering incentives or rewards for successful referrals. This can encourage customers to actively participate in your referral program and increase the likelihood of high-quality referrals.
- Measure and adjust: Continuously measure the success of your referral program and adjust your approach as needed. This can help you identify what is working and what isn’t, and make changes to improve your program over time.
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