The Psychology of the Sales Cycle – Referrals

For the most part salespeople don’t have a great reputation. This is so because many people feel they’ll be pressured into buying something they don’t want or need by someone who is manipulating them. I teach sales and don’t always like dealing with salespeople because most of the time they don’t add value to the transaction. If someone can only tell me what I can already read on online or find on a label, then they’re not doing me much good. Good salespeople add value because they:

  • Ask questions to help uncover a need you might not have considered before.
  • Save you the time and effort of having to do lots and lots of research on your own.
  • Point out features you might not have known about and demonstrate how they’ll be beneficial for you.
  • Can be a “go to” person for you when something goes awry.

When you interact with someone who really helps you, it’s natural to want to help him or her in return. That’s the principle of reciprocity and it will make the client happy to help you by giving you some referrals.

It’s common for salespeople to ask for referrals at the close of the sale.

“John, I’m really glad we’re doing business together. One way my business grows is through referrals. Do you know anyone else who might be interested in the services I offer?”

Personally I think that’s a terrible approach because you’ve not done anything yet to deliver on your promise! If the client doesn’t say no right off the bat it’s likely to be met with a name or two off the top of their head quickly just to satisfy you.

Here is an approach that combines the principles of reciprocity and consistency that is sure to get more and better referrals! You disarm the client by telling them you’re not going to ask for referrals but would like to ask a favor. Ask if you can talk sometime in the future about referrals, after they’ve had a chance to see how your product or service performs. This is where planning comes in because you’re planting a seed. Here’s what I recommend to insurance agents. I’m sure some variation might work for you in your business:

“John, I’m really glad we’re doing business together. At this point in the sales process I know a lot of insurance agents would ask for referrals but don’t worry, I’m not going to do that. I would like to ask a favor though. After you’ve had a chance to experience our service, say nine months to a year from now, if we’ve done what we said we would and you’re happy with us, could we talk about referrals at that time?”

Humans are funny in many ways and one is our willingness to put things off into the future that we’d rather not do today. I guarantee nearly everyone will agree to talk with you in 9-12 months about referrals.

Now it’s up to you to have an efficient diary system for following up with clients.

“John, it’s Sue. I’m calling to see how things are going and if there’s anything you need from me as we approach your renewal date?”

Towards the end of that conversation try this:

“John, do you remember when we started doing business together last year? I asked if we could talk about referrals if we’d lived up to our promises and you were happy. I feel we’ve done that (reciprocity). Are you happy with the decision you made to move your business to us?”

Don’t just ask for names and numbers at this point because the customer will be scrambling. They were not thinking about referrals when they picked up the phone, so continue in this way:

“I don’t want to take any more of your time today and I’d like to give you a chance to think about who might appreciate the kinds of things we’ve done for you. Could we set a time next week to talk for about 15 minutes?”

You’ve planted the seed for them to really give this thought and they will because they told you they would. On next week’s call you’re sure to get the names of people who would be most likely to appreciate what you have to offer.

This is the final post in this series where we’ve looked at using particular principles of influence at different points in the sales cycle. I hope you’ve found the posts enlightening but more importantly, that you employ what you’ve learned and see your sales soar as a result!

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