Today I had the pleasure of speaking with a young lady who is building her insurance business. She confided in me that she struggles with asking for referrals and, as we all know, the insurance business is built almost entirely on referrals once you make it through the beginning cold-calling stage.
She has attended many sales training courses where the presenters emphasized the strong and confident approach to asking for referrals. Often it is taught that you just ask directly using something like the following;
- “Can you give me the name of a close friend or relative who I can talk with?”
- “Can you give me 3 names of people you think might need their insurance reviewed”?
I have found that the reason so many salespeople don’t ask for referrals often is because strong and direct questions like this work better for those who are seasoned veterans and have built their business to the point where they approach this with more confidence. But, for the newer sales person, that level of posture doesn’t feel comfortable. In the martial arts, we say this is teaching through ‘black belt eyes’ to a group of white belts.
A much more conversational approach, and one that beginners can develop confidence with, is to be totally honest and little vulnerable in the approach. I recommend the conversation proceed more this;
“Thank you for trusting me with your business. I am new to this (industry/business/office/etc.) and I’m just beginning to build my client list. My business is built almost entirely on word-of-mouth from happy customers. I wonder if I could ask you for a referral? Do you have a friend or relative that you could introduce me to? I would be happy to offer them a free (review/consultation/evaluation/etc.) just like a did for you.”
If you like the idea of asking for 3 names, then add this “I have found that I can often help about 1 out of every 3 people I sit down with. Can you possibly think of 3 names?”
The basic formula for asking for a referral happens in these stages:
- Build rapport and trust, this helps if you just closed business with the person.
- Show a little vulnerability, you don’t have to pretend to be totally confident.
- Explain how you build your business.
- Ask permission to get a referral, don’t demand or expect it, and ask them to introduce you. It’s really a cold call if they don’t call ahead for you.
- Explain what you will do with the names and numbers.
- Thank them again, whether they gave you a name or not.
- Repeat this process every time you have contact with them.
I wish you the best of luck with your sales.
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Contact me if you have any questions – Matt