This post is brought to you by our guest writer Maria Elena Duron who is discussing the subject of referrals and how important they are with regard to building your business. Please feel free to add your comments to this post and let us know how helpful you found the information.
The Key to Referrals and Recommendations
Regarding referrals and getting to see the prospect, here is some information on types of referrals and the rates of conversion from prospect to customer from the Sandler Sales System training:
Cold referral = Client gives you name and number. Conversion rate =10%
Cool referral = Client gives you name and phone number,
and calls to let him know you’ll be calling. Conversion rate = 30%
Warm referral = Client not only calls, but tells about your business and what you’ve done for him. Conversion rate = 50%
Hot referral = Same as warm referral only this time your client accompanies you or brings client to your office. Conversion rate = 90+%
Where do the clients that give you the most pleasure and profit come from?
When asked this question, most businesses will answer “recommendations” or “someone referred them to me”.
Referrals and Recommendations tend to be the most effective and least expensive form of developing new business – yet many companies don’t have a strategy in place to maximize their potential.
- Have a system in place designed to generate leads and referrals?
- Is that system a positive experience where everyone is treated individually as a professional?
- Have access to community leaders, chamber of commerce leaders, professional and entrepreneur’s?
- Is it a place were fun, results and attendance encouraged and nurtured?
- Is it a place were professionalism is PRACTICED not “only preached”?
Is it attracting the kind of people that you are seeking who are at the same ambition level you are proud to associate with?
Understand that just like managing the inventory in your back room, managing your customer relationships and contacts database correctly can definitely make a huge difference on your profit line. It does for you as an individual, whether or not you own your own business or if you’re an executive or an employee with a firm or organization. Who you know is an important part of your social capital and so who do you already know? I always ask people to start there.
A lot of times when people ask me, “Maria, who do I need to know? What do I need to do? What networking events do I need to become involved with?” I’ll explain to them first things first, go back into your database of clients, customers, contacts, employers, fellow employees, co-workers, people that you know in groups, and people that you have direct contact with, too. Do you have their information and do you have current information?
Your customer relationship management process is key to the quality of the data you have. On the average, there’s about 5 to 8 people on your database that have passed away and you have them currently on your database so you want to make sure and clean that and keep it current and active because your database, that inventory, that social inventory is just as important and just as costly. Maybe even more so depending on the time that you’ve invested in it and more costly than actual inventory that you would have in the backroom.
Maria Elena Duron | chief buzz officer, speaker and coach is co-founder of #brandchat, a weekly conversation on Twitter. Join us weekly as we discuss company and personal brands!