Todd Martin

Todd Martin

Sales Strategy

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Incentivizing Your Referrals: Why and How

September 23, 2013

It’s easier to put your happy customers to work for you if there’s something in it for them.

At the risk of sounding like a direct mail letter, What would you say if I told you that there was a way to roughly double your closed sales that took little work from you?

Todd Martin 091813 image 1According to some studies, that’s what can happen when you ask your satisfied customers to endorse your products or services by referring their friends and acquaintances and family to you.

That statistic may be news to you, but the concept certainly isn’t. You’ve always known – from both your professional and personal experience – that a positive word from someone you know makes you more likely to at least investigate a company’s offerings.

Barriers to Success

Are you taking advantage of this potentially lucrative tool? The studies I mentioned also reveal that a surprisingly small percentage of sales professionals do. That number may have grown in recent years because social media simplifies the task, but it’s something that we all should be doing.

There are a number of things that probably keep us from doing this as frequently as we should. Lack of time. Apprehension about adding one more task to your workload that may cause rejection. And a simple lack of knowledge about how to go about it.

I can’t do much about the first two except to tell you that, a.) it won’t take up a lot of your time, and b.) you won’t always be aware when you’re turned down, since a lot of your work can be done indirectly.

Many Paths

You can, of course, ask your customers directly – your happiest, most active customers. Don’t ask them to pepper blogs and social networks with positive reviews in return for something of monetary value, since this is unethical and can get you into hot water if your competition finds out. Simply ask if they’d be willing to write a brief, positive message that you can use in promotional materials.Todd Martin 091813 image 2

If you’re a sales manager, though, you can offer incentives to your sales team members. Pick a month to be “Referral Month,” and see which salesperson can bring in the most referrals. You can offer a tangible reward for this (a restaurant gift certificate, a set of choice leads, promotional swag, etc.) or just let it serve as a feather in the winner’s cap.

If you’re involved in active selling, there are numerous ways you can reward word-of-mouth and other referrals – both on social media and at the conclusion of face-to-face sales — including:

  • Discounts on products and services
  • Merchandise credits
  • A “Preferred Member” rate or discount for frequent referrers
  • Inexpensive promotional tchotchkes
  • Handwritten thank-you notes

Todd Martin 091813 image 3Of course, you don’t want your network of contacts to be overwhelmed by a blizzard of blatant sales pitches. So when you ask your existing customers in put in a good word for you, assure them that you will follow up non-intrusive ways. You might even offer friends of friends a first-time discount or credit, and throw in a free, inexpensive item.

It’s difficult enough to make sales without word-of-mouth these days, given the freedom buyers have to explore your competition thoroughly. So let referrals do some of your work for you.

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