Jonathan Farrington’s Blog

Some Background Information:

Did you know that:

• 40% of salespeople are failing in their sales careers?

• 45% of all salespeople earn the average income for their industry?

• A typical salesperson devotes only 10-20% of their time to actual selling because a large proportion of their available time is devoted to cold calling?

• 85% of all salespeople do not generate enough quality referrals?

• Salespeople who actively seek and exploit referrals earn 4 to 5 times more than salespeople who don’t?

•  Referral business closes and converts more than 70 percent of the time?

Why is referral based selling so powerful?

A referred customer is already pre-sold on the credibility of the salesperson, their company and the relevance of the products/services sold. These types of opportunities are much warmer than a cold-call based opportunity because it maximises the goodwill, inherent in the relationship between the referred customer and the referring person.

By association, salespeople are consequently perceived in a different light compared to those that have made contact ‘out of the blue’. The costs of selling to a referred customer are reduced because they are easier to see, and are likely to be reasonably well qualified so that the probability for converting the business is much higher. Generally speaking referred prospects will accelerate through the sales pipeline at a much faster rate than other types of opportunities, and they will also be more receptive towards providing future referrals.

What are the biggest barriers to getting referrals?

If asking for referrals has not been included and communicated in the sales process, this will deter salespeople’s focus as they will see asking for referrals as a ‘nice to do’ rather than a ‘must do’. This in turn usually means that there is no rigorous method for measuring and monitoring how many referrals are generated and what the conversion ratios are for closing referred customer business.

Energy goes where attention flows, so without specific attention to this salespeople are unlikely to invest their energy in this direction. (Even if they are firm believers in the positive impact that referrals can create!). For many salespeople asking for referrals is uncomfortable because they feel unsure about how to do this effectively, and they aren’t confident they will get their desired response.

If people don’t know how to do something and they believe that what they are doing will damage their existing relationships, then it’s better to avoid it all together. Additionally, if salespeople make the common mistake of asking for referrals too early on in the relationship this can result in more refusals that further erode salespeople’s confidence.

Therefore, to optimise the use of referral-based selling the following components are vital:

1. Asking for referrals and acting on them needs to be incorporated in the overall sales process.

2. Metrics around referrals should be sought and evaluated on a regular basis, because this contributes towards furthering the rationale for generating them.

3. Development and training needs to be delivered to the sales team so they can maximise the impact of referrals and feel confident with this skill.

When is the best time to ask for referrals?

People will freely give referrals when they have benefited from your product/service and have an established relationship with you. This rarely occurs during the initial meeting because whilst they may like you, they haven’t yet validated what you can do for them. That’s why asking for referrals should be when the relationship you have established is strong enough to ensure their trust and belief in you.

Assessing the strength of your existing customer relationships can be very subjective unless there is a meaningful set of relationship criteria in place.  Although these will vary from organisation to organisation, they may include factors like:

- Communication frequency with key influencers
- Satisfaction with product/service
- Speed of response to queries/problems
- Length of relationship

The customers with the highest scores (based on the relationship criteria) are those that should be approached for referrals.

What is the best way of generating referrals?

1. Prepare a description in the form of a criteria list that specifies the type of person or organisation that you are looking to approach. This should be based on the profile of your Ideal Customer.

2. Evaluate all your customers using a relationship criteria and identify a list of those with the highest scores. For every customer your aim is to generate a minimum of 5 referrals. Therefore, if you have 25 customers on your list your target number of referrals will be 125.

3. Contact each customer on your list and take the pressure of them by explaining that you don’t want to sell to them, you would like their help.

For example: “Do you know anyone who is (specify your criteria) that would be interested in learning about how our products/services can benefit them?” Preface your question with a softener such as: “I wonder if you can help me” or “I would really appreciate some advice.”

4. When customers give you referrals, ask their permission to use their name when making contact. Alternatively, where your relationship is ‘rock solid’ ask customers to make the initial introduction by letter or email. Often customers will give a glowing testimonial and create a relevant context when introducing people.

5. Thank customers for referrals and keep them appraised of your progress. This creates a positive association towards the giving of more referrals in the future.

So, there we go, my most recent thoughts on the importance of referral selling!

Today’s News: A couple of great blog posts for you: “Martini Glass Prospecting” from Colleen Francis and “What’s The Half-Life Of Sales Training?” from Dave Stein.

Tomorrow: My guest is the amazing Billy Cox, who urges us to “Expect Victory”

Nobody seems to remember who first coined the term elevator pitch, or elevator speech, but I know it’s been around a long time, and I am often asked to help design such speeches for clients.

An elevator pitch is a short presentation that you could deliver to someone in an elevator as it travels from top to bottom, or vice versa. It must be compelling as well as descriptive. It should contain such punch that the other person would love to buy from you. Of course, you can present such a speech in places other than an elevator!

When cold calling in person, it is a good idea to have your pitch ready. When the buyer meets you in the reception area, deliver the elevator pitch with enthusiasm, and he or she is much more likely to agree to allocate time to you. On the phone, you can use this method to obtain an appointment. You may even want to use it in a sales letter where you introduce your company to the prospect.

For those who work trade shows, have your elevator speech ready for people as they approach your booth.

I use my elevator pitch as a networking tool, and I deliver it by way of an introduction of myself and my companies.

The Main Components of the Pitch

An elevator speech should meet the following criteria:

• Keep it brief - long enough to convince, but short enough to hold the other person’s attention.

• Be articulate - use the right tone and speed so that you don’t rush the message.

• Make it sincere - the buyer must feel that you’re a credible source (which of course you are).

• Be enthusiastic. Use appropriate excitement when telling your story. Buyers take their leads from salespeople. Enthusiasm is infectious, and if you are not enthusiastic about your products/services or your company, change jobs!

Your elevator speech should answer these questions: Who are we? What do we do? To whom do we sell? What makes us unique? How do we bring value to our customers?

Do remember that knowing what you want to say and rehearsing it will make this sound natural. This may be the first time the buyer has heard it - but you don’t want it to be the first time you deliver it.

Used effectively, the elevator pitch can be a good salesperson’s foot in the door. Once you get your break, it’s up to you to finish the deal.

Today’s News: I recently completed a couple of interviews with one of my favourite article community sites, Eyes On Sales, and you can listen to the first one by simply clicking on the banner below:

I am often asked if the Top Sales Experts team collaborate much on joint projects - the answer is a resounding YES WE DO. Obviously, if you are going to expose your clients to another consultant, there has to be a very high level of trust, but this week was a typical situation: One of my favourite clients has a small team who needed some specific coaching on how to reach the decision maker via cold calling, so I immediately turned to Leslie Buterin, who is after all, one of the world’s leading gurus in this area.

Leslie delivered a two hour online coaching session. Result? They were bowled over by her and are already reaping the results of her pearls of wisdom. This is where relevant, specific mentoring comes into it’s own and proves the point that I evangelise about so often - “One size fits all” sales team development no longer works, it really has been consigned to the annals of history.

Would you hire the local handyman if you had serious structural problems with your house? I hope you would not! You can catch up with Leslie here

Finally, I tried to find you another good blogpost today, but in vain - I’ll keep searching over the w/e.

I need to thank you for your patience with delayed posts this week and also with the technical issues we experienced with The JF Journal - I have to hope that patience was rewarded.

Tomorrow: My last few days in the UK, so I am getting together with two of my children for some “bonding” - so wherever you are, have a great w/e and be sure to make it back next week - JF

The JF Guest Author Spot

Kendra Lee

Sooner or later it happens to the best of salespeople - a sudden slump that starts slowly and then snowballs.

Conventional wisdom says the best way to break out of a slump is to keep doing the things you’ve always done.

Avoiding the deep slump.

To get back on track and avoid a deeper slump, try these six tactics:

1. Retrace your steps.

Are you leaving anything out of your presentation that’s worked in the past? Maybe it’s a word or phrase, a transition you skipped, or a step you omitted.

Ask yourself if you’re stressing the same things. Or, are you including something that may be turning prospects off?

Compare a call you made before the slump started to one you’re making now. Can you see or hear a difference between the two?

2. Be persistent

Selling, like football, is a contact sport. If you don’t stay in contact with your customers, your competitors will.

Can you trace your slump to a period when you didn’t stay in touch with customers as much as you should?

Maintaining regular contact so you’re there when the customer is ready to buy is a great way to avoid slumps.

3. Try to keep your confidence up

Confidence and morale are usually high when sales are good. When sales are harder to come by, it’s difficult for salespeople to stay up.

You’ve proven that you can sell in the past. Now it’s a matter of finding out what’s missing and getting back on track. Once your confidence is back up, your sales will probably follow.

4. Set specific goals

Yogi Berra once said, “If you don’t know where you’re going, you’re sure to end up nowhere.” The same can be said of a salesperson who tries to break out of a slump without setting specific goals. Maybe you should make more calls or do more prospecting than you did before the slump hit.

5. Plan each step

Salespeople who spell out the steps they’re taking to break the slump are more likely to get results than those who simply go back to the plan they used when things were good. The slump may have nothing to do with you or your sales techniques. Maybe the market has changed, and unless you adjust your plan accordingly, you’ll have difficulty ending the slump.

A plan is not just a means of breaking out of a slump. It’s a process for learning from and building on the past, a confident way of knowing that the steps you’re taking at the moment are actually in a forward direction.

6. Never relax the tension

Some salespeople blame “burn-out” and “stress” as the major cause of slumps. Salespeople who keep up the pressure usually stay ahead of the pack. To never let up may be the smartest way to avoid “burn out,” “stress” and “slumps.”

Kendra Lee is author of “Selling Against the Goal” and president of KLA Group. Specializing in the IT industry, KLA Group helps companies rapidly penetrate new markets, break into new accounts and shorten time to revenue with new products in the Small & Medium Business (SMB) segment. Ms. Lee is a frequent speaker at national sales meetings and association events. For more information, contact the company at +1 303.741.6636 or info@klagroup.com or visit www.klagroup.com.

KLA publishes an industry-leading online newsletter. To subscribe and get a free Quota Gap Calculator ($18.95 value) visit www.klagroup.com. For information on sales training, call 303-741-6636.

You can read more about Kendra here

Today’s News: Over at Salesopedia, Clayton Shold is in conversation with Shannon Smith, the image guru - interesting stuff!! Just click on the banner below:

Thanks to everyone for the fantastic feedback on The JF Journal, it really does make it worthwhile.

Finally, a great blogpost for you:”Is This Describing Your Product Or Service?”

Tomorrow: “How’s Your Elevator Pitch? Mine’s OK!”