Generate More Sales Leads from Referrals

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Customer referrals are a powerful way to generate sales leads. Business owners, outbound and inbound sales executives, and account managers are all perfectly placed to ask happy clients for referrals. 

According to a Wharton School of Business study, referral customers have a 16% higher customer lifetime value (CLV) than non-referred customers. Not only that but the cost/time it takes to win them is much lower than customers secured through cold outbound techniques. 

So why do so few businesses ask for referrals proactively? 

When was the last time you asked for a referral? 

If the answer is, “I’m not sure”, then referrals aren’t a normal part of your sales process. 

For companies with a salesperson or sales team, are referrals built into KPIs and weekly outputs? If not, then again, this is something that needs reviewing, urgently. Especially if you need more sales leads in the pipeline. Providing customers are happy, and keep coming back, or you work with them on a retainer basis, then these are your most natural powerful advocates. 

Shortcuts:

When should you ask for referrals?

5 ways to secure sales leads from referrals

When should you ask for referrals?

Every single customer could refer another customer of equal value your way. Just imagine that. In one quarter, if that happens, you could double your customer-base and revenue! 

Of course, it’s usually not that straightforward. Unfortunately, not every client is going to know another company in need of your services. Or at least, not every potential referral is ready to go-ahead straight away. 

Referrals need to be approached tactically. You need to ask at the right time, in the right way, and be ready to offer some kind of incentive. Persistence also pays off. It’s worth remembering that if you ask once and a client doesn’t have any referrals to offer, there’s always another time. 

Too often, business owners and salespeople try something once and give up. When it comes to referrals, those who succeed usually ask, and keep asking. Here are five ways companies can start asking for referrals to secure more sales leads from happy clients. 

5 ways to secure sales leads from referrals

Ask Your Advocates

Not every client is a potential advocate. Lower-budget, or more difficult clients, and those who aren’t always happy with the services you provide aren’t ideal. 

Whereas, happy clients, those who are clearly getting the sort of value you want clients to get, are more valuable as referral partners. Whether you provide products or services (e.g. software, professional services, marketing, etc.), there are always going to be clients that gain more from the relationship than others. 

And that’s what referrals come down to. Referrals are tactical, timing and relationship-based.

When asking for a referral, the aim is that a client is going to leverage their network to open doors, hopefully leading to you securing a new client from that relationship.

This means the best clients to ask are ones you know will gladly talk about your work positively. 

Are Your Clients Happy?

Before asking for a referral, make sure the following is noted in a CRM: 

  • Is the client happy with the products/services we have provided recently? 
  • Are they a repeat or retainer client? 
  • Have they given us a testimonial, or is the relationship strong enough that if we asked they would? 
  • How well positioned are they to provide referrals (e.g. are they well known in their sector, the area; how well connected are the people we interact with)? 

Providing the client ticks most of those boxes, or other criteria you use, then this is the right company to ask for a referral.

Another way is to send out a survey that measures how happy your customers are. The easiest way is to send a Net Promoter Score (NPS) survey to your clients. Then ask the clients that give you a 9 or 10 for referrals.

Have Supporting Materials Ready

Supporting materials come in all shapes and sizes. Emails, sales PDFs, and landing pages are the usual formats companies use to generate referrals. 

Why are supporting materials important for referrals? 

  • Most clients, no matter how happy they are with your products/services don’t always know the best ways to sell those services. 
  • Clients aren’t armed with the same sales and marketing materials as your team. 
  • Referrals made without supporting materials could inadvertently bring the wrong sort of clients in. 

Supporting materials can be as simple and effective as a copy-and-paste email with a few links. Just enough information for a client to refer sales leads your way, quickly, easily, and fortunately frictionless. 

Many CrankWheel users use the automatic post-session redirect feature to collect referrals. When the admin has set up multiple redirect URLs, the sales people can choose to redirect happy clients to the company’s referral form after the screen sharing session ends.

Be Specific and Reciprocate

Make a call and use CrankWheel before asking. Make sure you’ve got supporting materials ready, and the client is happy. 

Then ask for a referral. Be specific, if you’re aware that they know/work with a potential client you want to win. If not, then ask for general referrals.

Whenever possible, aim to reciprocate. Chances are, they would equally benefit from new inbound sales leads. 

Ask throughout the year

Ask more than once. Ask several clients throughout the year.

Put a diary or CRM reminder so that you know who to ask, and when to ask clients so you aren’t asking too often, but aren’t forgetting to ask either. 

Conclusion

Customer referrals are a highly effective means of generating sales leads, offering a 16% higher customer lifetime value compared to non-referred customers, while being more cost-effective to acquire.

Many businesses fail to proactively seek referrals. Businesses should identify satisfied clients who can act as advocates, assess their satisfaction and readiness to refer, provide supporting materials, be specific in their requests and make asking for referrals a regular practice throughout the year.

With these strategies, businesses can make use of the growth potential that referrals offer and build lasting, profitable relationships with their happy clients and their networks.