Relationships Still Rule - Build Your Business Through Referrals
By Joanne S. Black, Strategist, No More Cold CallingThe Internet and other breakthroughs in technology have fundamentally changed the way most businesses operate. New business models are in place, new technology is created at warp speed, and purchasing and supply-chain management are handled online.
These changes enable companies to conduct business faster than ever. In turn, customers expect immediate decisions, which places further demand on companies to act and react quickly.
This cycle of ever-increasing speed and sophistication creates an intensely competitive marketplace. Ironically, whether a business is ultrahigh tech or low tech, the most important business decisions a businessperson makes are still based on personal relationships. With whom would you prefer to do business: someone you've met only via the cold call or a colleague with whom you have an established, respected relationship?
If you think you can substantially build your business by cold calling, think about the value of your time. The new business climate demands you make the most of it. How many cold calls do you or your team make to close a deal? Chances are, it's not a healthy ratio. Cold calling just isn't an effective use of time.
We often delude ourselves by thinking that we’re making a warm call. In reality, there’s no such thing as a warm call. A sales call is either cold or hot.
A cold call is one that’s made to someone who doesn’t know you and is not expecting your call. Consider the following situations:
These are all cold calls — the person doesn’t know you and is not expecting your call. Even though you think you've been able to avoid sounding like a telemarketer, this type of call is still cold. And cold calling is a numbers game. If we make 100 calls, we’ll talk to about 20 people, schedule 10 appointments, and if we’re lucky, close one new deal. That’s a 1 percent return on our time.
Not only does cold calling have a low percentage return, those who do it and those who receive it rarely have a positive attitude about cold calls. Recent research by Huthwaite surveyed both sellers and buyers about their attitudes on prospecting:
Sellers
Buyers
Obviously cold calls aren’t working. In fact, why would you settle for the illusion of a "warm call" when you can make genuine hot calls?
Fortunately, there is a way to make nothing but hot calls, with a fantastic rate of return. The secret is referrals.
A call is hot when there’s an introduction. The person knows who the caller is and is expecting the call. This is the kind of call that shortens the sales cycle, increases a salesperson’s credibility, results in qualified prospects, and means a new client over 50 percent of the time! Why would you waste your time doing anything else? Here’s how to get HOT calls:
1. Make a list of everyone you know—current clients, past clients, peers, neighbors, service providers, friends, past co-workers, professional association members, volunteer groups, etc. You should have at least 100 names. Prioritize the list by starting with the people that you know the best. You are not asking these people for their business; you are asking them to introduce you to people they know.
2. Set a goal and decide how many people you will contact each week. Arrange in-person meetings if at all possible.
3. Tell these people (your referral sources) that you are building your business through referrals and would like their help. Describe your ideal client and ask for one or two people who meet your description.
4. When your referral source makes a suggestion, find out as much as you can about the person and his company.
5. Then ask your referral source to make the introduction. The introduction could be by phone, in person, or by e-mail.
You will now make a HOT call! Start thinking about how you spend your time and the type of payoff you want. Get HOT and get that introduction.
The next step is to expand your strategy. Bring your business network into your plans for success. At your fingertips is a catalog of established, trusted clients and colleagues; people who, if asked, might just be your next sales or business-development leads.
Think about the radical difference in calling people who've never heard of you versus calling people who WANT to hear from you. These potential clients have been given the heads up that you are a viable, valuable connection. They are expecting and looking forward to hearing from you because your established client has placed an advance call on your behalf.
So if referrals are such a strong and successful way to build business, why are people still cold calling? The answers run the gamut: It's not the right time to ask their colleagues; they're afraid of being told no; the approach might come across as too "salesy." Dispel these misconceptions. Dispense with your fears. Energize and strengthen your business-development process by calling on your targeted referrals.
By taking a proactive approach to building your business through referrals from trusted clients, colleagues, and professional contacts and organizations, you are engaging and working your network. By calling on referrals, the business decision-making time collapses, your competition fades into the background, and you establish immediate credibility.
The relationship closes the deal. What's to lose except that long list of cold calls!
Tips for Building Relationships
1. Get started by planning how you would like to spend your business-development time:
2. Focus your efforts on activities that give the highest payoff!
3. Position yourself as the expert
Remember, the most energizing and exciting part of sales work is the relationships with clients—the interaction. We like learning about a client’s situation and matching our solutions to their needs. In an era dominated by ever-expanding technology, the creative, strategic part of our business is back. Yes, it requires brainpower. But isn’t that what we love about what we do? Indeed.
Joanne Black is the country’s leading expert on Referral-Selling. She is a San Francisco Bay Area sales strategist renowned for her No More Cold CallingÔ approach to selling. For complete information, visit Joanne’s website at www.NoMoreColdCalling.com, e-mail joanne@nomorecoldcalling.com; or call (415)461-8763.
