Referrals: The Overlooked Low Hanging Fruit

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Have you ever worked for someone who effectively leverages referrals?  I do!  Referred customers are more loyal, eager to work with us, and the sale requires less effort.  Did you know that 90% of consumers say they would provide a referral, but only 11% of salespeople ask (Dale Carnegie)?  When was the last time you asked for a referral?  Before reading about how to establish a referral system, you should know why referrals are so important:

Referrals lead to a higher close ratio.

According to Neilsen, referred customers are four times more likely to make a purchase than non-referred customers.  The reason?  People trust their friends, and when a friend recommends your organization they are transferring their established trust to you.  It is far easier to convert a prospect when you have a strong reference.

Referrals lead to a lower cost of sales.

Would you like to improve your cost per lead?  You can significantly decreases this expense with a solid referral system.  I rode in the car with my mentor (John) one day while he took a phone call from a client.  They had two leads for him, and both felt excited about working with us even though John had never met them!  According to the Corporate Executive Board, 57% of the buyer’s decision is completed before speaking with a sales rep.  Referrals provide free advertising, solidify your brand, and decrease the time and effort needed to convert a prospect into a client.  Once a client provides a referral, they are more likely to recommend you in the future, creating a ripple effect.

57% of the buyer's decision is completed before ever speaking with sales. Click To Tweet

Referrals mean increased loyalty and retention.

According to a study by the Journal of Marketing, referred customers have a 16% higher lifetime value and are 18% more loyal than non-referred customers.  Clients who provide referrals experience increased loyalty to your organization as they share their experience, while transferring a degree of trust to your prospects.

 

Work diligently to obtain new clients, establish a solid team who will work tirelessly to impress them, and reap the benefits of referral based customers.

 

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