One of the constant struggles in lead generation and appointment setting is the tension between sales people asking for “more sales leads” and managers asking their sales people to “do more with the sales leads you already have.”
Fortunately there is a way to bridge the gap – your sales team can generate more sales leads by implementing a lead referral program. This is a great way to boost your sales pipeline and hopefully improving the quality of your sales leads – and it all starts by building upon the customer relationships that you already have.
When you start a lead referral program, you can increase your number of sales leads and will also likely improve your inbound lead qualification. The reason is that referrals typically have a quicker sales cycle because there is a level of built-in trust from the referral company. People are more interested to talk to your sales team on lead generation calls (and more open to agreeing to a sales appointment) if your sales reps can mention the name of a trusted friend or colleague who referred them.
But how can you get a lead referral program up and running? Isn’t starting a referral business expensive and time consuming? It doesn’t have to be. Here are a few simple guidelines for how your team can create a lead referral program (or improve the one you already have):
Happy customers are more likely to refer their colleagues to your business. If your current customers are grateful for the efforts you have put in, they will reward you. If you’ve helped a customer boost their business, they’ll be eager to help their colleagues or friends share in that success. Sometimes you won’t even have to ask. Your best customers might also turn out to be your hardest-working “unpaid” marketing staff.
Make sure your lead referral program is doing something valuable for the customers and prospects who you are asking to refer you to others. Don’t just make it all about “you” and your company’s needs. Instead, make sure it is a mutually beneficial arrangement where you can give the referral company some kind of valuable and worthwhile reward, whether it is a discount, a cash bonus, a personal gift, or something else that thanks them for the referral and makes them feel appreciated.
If you’re going to give away a reward to people who refer you to other prospective business leads, make sure the reward is significant. Take a hard look at the value of a sales lead – examine your conversion rates and calculate the value of a customer. Is it worth it to your company to offer $100 or more for each new sales lead? Would you be able to pay extra for a particularly high-value prospect (like a personal introduction to a Fortune 500 company C-level executive) or highly-qualified sales lead who’s eager to move forward on making a deal with your business? But be careful not to overpay for these referrals. You need to be prepared to invest some money in rewarding your customers who participate in the lead referral program, but you also need to make sure your investments are profitable.
If you’re asking people for referrals, you’re asking them for a pretty big favor – they are going to be taking time out of their busy day to help your business find new customers. So make it as easy as possible for people to offer referrals. Include a “refer us to a friend” link in the e-mails you send to customers. Put a prominent button on your website for your lead generation program, and make sure it’s easily visible so you can point people to it during phone conversations. Don’t tie your rewards to a specific amount of spending – just give your referral rewards on a per-lead basis.
As part of your sales team’s conversations with prospects, if they encounter resistance and objections, ask the prospects if they could refer your company to any colleagues who might be interested. For example, you can make a request for referrals by saying: “It sounds like you might not be at the right point in your purchasing process to talk to us – but do you know of anyone else at your company or in your industry who might be a good fit for what we offer?” Frame the conversation not as simply trying to generate more sales leads for yourself, but as a way to help the prospect’s friends and colleagues.
A common mistake that sales people make when they get leads from a lead referral program is to assume that all the leads are highly qualified and ready to buy. It’s true that getting a referral can often give your sales team an advantage in building trust with the prospect – but your sales people still need to be prepared to do their research, learn about the prospects, and go through the sales cycle just like they would for any other sales leads.
With referrals, even if the introduction is warmer than usual, your team should still go through the usual process of qualifying your inbound leads:
Getting sales leads from a lead generation referral program can be one of the most cost-effective and targeted methods for improving your sales team’s pool of qualified sales leads. But you need to remember to serve the interests of your prospects and customers (by offering them worthwhile rewards), and integrating the referred sales leads into your overall lead management process. Referrals can give your sales team a head start, but you still need to do the legwork of doing research, building relationships and working through the sales cycle from start to finish.