Closing a Deal Archives - Dr. Ivan Misner®

Getting a New Referral Is a Done Deal . . . True or False?

When one of your business contacts passes you a new referral, does that mean the prospect is ready to hear a presentation on your product or service?  Repeat after me . . . NO.  Assume nothing.

When an associate passes you a referral, say thanks, then start digging for more information.  Exactly what does the prospect do?  What products or services does he want from you?  Will your offerings truly fulfill his needs?  What is his behavioral style?  What are his business goals?  How large is his company?

Don’t skip steps in your sales process.  Before you approach the prospect, you need to decide on a strategy based on whatever you can find out about him–the same as you would when preparing for any sale.  Just because the prospect was referred to you doesn’t mean the sale is a done deal.  All you’ve really received is an opportunity to approach the prospect with a favorable introduction.  Whether the prospect becomes a client or not depends on how well you convince him that what you offer, at the price and under the conditions that you offer it, will fulfill his needs.

There’s quite a difference between a basic referral and one that’s well developed, and there are many different levels in between.  Listed here from least to most valuable, you should consider which level this referral represents:

  • Name and contact information only–Unfortunately, this is what many of your potential sources probably think the first time you say the word referral to them.  It does represent a certain level of trust in you, but the networking value of this kind of referral is low.  It’s better than nothing–but not much.
  • Authorization to use name–If he says, “Tell ’em Joe sent you,” you can be fairly sure you’ve established a good level of credibility with him.  This gives you some leverage, but the work of developing the prospect still falls on you.
  • Testimonial or letter of introduction–If your source trusts you enough to say nice things about you, try getting him to go a bit further and write you a letter of introduction or recommendation, including background information on you and some words about your product or service.
  • Introduction call–A personal phone call on your behalf, preparing the prospect to hear from you, takes significant time and effort in preparation.
  • Letter of introduction and phone call promotion–A letter that’s followed up by a phone call advocating your business represents a high level of commitment by your referral source and has a great deal of influence on the prospect.
  • Meeting–By arranging and working out the details for a meeting between you and the prospect, your source moves beyond the role of promoter to that of facilitator, or even business agent.  This demonstrates to your prospect a deep level of trust in you.
  • Face-to-face introduction and promotion–Combining an in-person introduction with promotion demonstrates that your source is engaged in selling your product or service rather than just facilitating your sales effort.
  • Closed deal–Your referral source describes the features and benefits of your product or service, then closes the sale before you even contact the prospect.  All you have to do is deliver the goods and collect the money.  This is obviously the best kind of referral you can get.  To get to this level of referral, you’ll have to work with your sources and tell them what you’d like from them.  This takes time and education.

The better your source knows you and is confident of your character and your business, the more often you’ll get the higher-level referrals.  But keep in mind that you need to be making high-level referrals for your sources too.  It really is true . . . what goes around comes around.

What can you do this week in an effort to generate more high level referrals for your referral sources? For those of you who share your ideas in the comment forum below, I’ll send a free copy of my book Masters of Sales to everyone who posts their thoughts by the end of the week (Sunday, 5/5/13).  Once you leave your comment, send your name and your mailing address to erin@bni.com in order to receive your book (Erin is my Communications Supervisor and she will only use your contact information in order to ensure you receive your book–your information will not be shared).  Thanks!

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