2 Min Tips with Tim

Referral Selling

Welcome to this Two Minute Sales Tip with Tim.

Ladies and gentlemen for the past couple of days I’ve been spending some time catching up on some reading, and I’ve been focusing my energies on this area known as referral selling. So I would like to share with you today four fun, interesting and relevant statistics when it comes to the world of referral selling.

Fun Fact #1: According to the folks at Dale Carnegie, 91%, that’s right 91% of customers say they give a referral, but only 11% of salespeople actually ask for them.

Fun Fact #2: Research done Nielsen reports that people are four times more likely to buy when referred by somebody that they know.

Fun Fact #3: Heinz Marketing, which researched over 600 companies, came up with this very interesting insight. Companies with formalized–I really have to underscore the word formalized–companies with formalized referral programs experience 86% more revenue growth over the past two years when compared to the rest. And yet, only 30% of the companies they surveyed actually have a formalized referral program.

This seems so fundamental; but only 11% of salespeople are asking for referrals. What’s going on with the 89% of the rest of you?


Last but not least, Fun Fact #4: According to the American Marketing Association, offering a reward increases referral likelihood, but the size of the reward really doesn’t matter. As a matter of fact I found another article by the University of Chicago that said non-cash incentives are actually 24% more effective at boosting performance than cash incentives.

So here are three takeaways for you today…

Number one, if you’re not asking for referrals, you’re probably missing out on opportunities. It’s just that simple.

Number two; I would really strongly encourage you to formalize a process for getting referrals. Here’s the challenge. This seems so fundamental; this seems so easy, yet we discover from the very first statistic that only 11% of salespeople are asking for referrals. What’s going on with the 89% of the rest of you? Well you know what, we’re busy. We get caught up in the day-to-day and we simply forget to do it. So please, get a formalized process around asking for referrals. Get a plan and put it into place.

Number three, give people a reason. Incent people to share. Whether it’s simple Starbucks card or maybe it’s an AMX Gift Check, you decided. According the University of Chicago, the non-cash incentives are 24% more effective. So it’s not like you have to spend a ton of money. Just let people know that you appreciate them giving you that referral.

So, in closing, I would like to ask for your referral. If you’ve been following me for while, if you enjoy these two minute tips, if you like the webinars that we’re doing, and you know somebody who needs a keynote speaker, you know somebody who has an upcoming sales meeting or you know somebody who is looking for an executive presentation coach, just reach out and connect us. If the referral turns into an opportunity, we’re going to send you an iPad Mini as a way of saying thanks for trusting us with that opportunity.

My name is Tim Wackel. You can get more ideas and answers at www.timwackel.com. Thanks for watching.

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