Sales Managers: Think You’re Ready for Referrals?

If salespeople were self-motivated, they wouldn’t need sales managers or metrics. Yep, most of us are lazy and lack discipline. I’m including myself here. It’s a lonely world for account executives. I’ve been there—given a quota (usually without my input) and a list of client companies, and then told to “go at it” and do whatever it takes to get meetings. Sound familiar?

Left to our own devices, most salespeople fail miserably. That’s why we need sales managers. Actually, what we need is strong sales leadership.

Whether you are a CEO, vice president, or sales manager, you have a central role in your company’s sales process and in the decision to transition from vapid outbound prospecting to selling through referrals. Referral selling is not just one more initiative to introduce to your organization. If you want to successfully shift to building a referral program and a robust sales climate, then as a company, you must commit to the transition and let everyone know that you are becoming a referral selling organization.

What this means is that everyone from the top down does their part in generating referrals. Sales managers do what they ask others to do. And you will align all systems in your organization—recruiting, training, and compensation—to support the referral selling process.

Above all, your job is to get the rocks out of the road for your salespeople—your account executives and everyone on your sales team—so they can do what they were hired to do: Sell!

Sales Managers: Where Are You Now?

All of us perform our best when we are accountable and have the tools to succeed. We don’t respond to being told. We respond by being shown, recognized, and rewarded for successful behaviors.

Salespeople are the first to recognize a “program du jour.” How many times has one of our sales managers read a book or spoken to a guru, and suddenly the entire organization was taking a new direction? As quickly as this new thinking evolved, it was just as quick to die—replaced by yet another cutting-edge viewpoint or strategy. Sales reps figure, “Why bother committing when we know it’s a short-term priority?”

Even if you don’t change sales strategies like underpants, unless you have carefully planned how you will transition to a new approach, you shouldn’t be surprised if your employees respond, “Wait a minute! What happened to the other initiatives that used to be a top priority?”

So, how do you get them on board? With sales leadership, not sales management.

True leaders do not ask others to do anything they would not do themselves. So, your first action is to SHOW your sales team your commitment to prospecting through referrals. You need to do what you are asking them to do.

Change Your Team into Referral Sales Experts: 5 Steps

We’ve all seen initiatives begin and then get stalled because handoffs were botched, or a sales manager gave his explicit agreement but didn’t implicitly believe in the program. We’ve seen sales managers sabotage a new initiative from the get-go by not holding people accountable for new behaviors and not shifting the way the sales organization is run.

Once you have the CEO and key sales executives on board, here are the steps you need to take to change the sales climate and start building a referral culture.

1. Assess your sales climate. How does your sales team really feel about selling? Here are some interview questions I use when I conduct pre-session meetings with my clients. Ask your sales team some of these questions and listen carefully to their answers. They are your frontline and your ear to what is going on—not only with your clients, but within your company.

Sales Team Questions

• Describe your perceptions of our sales culture: 1) What does the organization need to do more of, less of, or differently? 2) What does management/sales leadership need to do?
• How do you view your role in the sales process? What is working/not working for you in the sales effort?
• If you could change one or two specific things and improve the process, what would they be?
• What is working/not working in developing new clients? What do you see as the biggest obstacles—both organizationally and personally?
• What is the value you receive from your manager?
• How confident are you that you will meet or exceed your revenue goals?
• How clear are you about what is expected of you?
• On a scale of 1 to 7 (with 1 being “poor” and 7 being “high”), what is the level of client support you receive from your manager and senior executives?
• Are there things you would like to be doing that you’re not doing?
• What advice do you think your customers would give to you?
• What else would you like to tell me that we haven’t discussed?

Once you’ve conducted your interviews, compile your answers to these questions and document themes or trends. You will then be prepared to review your findings and determine which issues you want to tackle first.

2. Create company metrics

Sales leaders tell their teams to get referrals, but their KPIs don’t include referral activities or results. Makes no sense, does it?

Some measure reps based on referral results, but referral activities are the referral metrics that matter. Results metrics are a lagging indicator, and you can’t manage to results.

You can manage to these referral activities:

• Number of people asked
• Number of referrals received
• Number of meetings scheduled
• Number of meetings conducted
• Close ratio of referred leads

Determine how many additional referral clients your company plans to attract each week. How will these translate into increases in revenue and profits? What additional products and services do you plan to cross-sell?

3. Align reinforcement systems

Consider a compensation plan for anyone who provides a referral. One of my clients instituted a plan that gives a 5 percent commission to anyone in the company who makes referrals that lead to a sale. Now, that’s a real incentive from a company that understands the value of having a referral culture.

Michael Maher, North America’s most referred realtor, says this about transitioning to referrals:

“First, it isn’t a transition. It’s a transformation. Running a referral-based business doesn’t mean giving up your sales team. It means adding unpaid sales people to the team — ambassadors. Your clients transform throughout the buying process and become a part of your sales staff, speaking highly of you and referring you willingly. Like Apple. Like Nordstrom.”

He’s exactly right! And that’s why sales managers must continue to encourage and orchestrate the almost infinite contact potential within your company.

4. Review your new hire program

Take a close look at your on-boarding process for all new hires, not just in sales. Everyone needs to know that they are expected to generate referrals for the organization. New hires need the technical know-how for their jobs, as well as the skills and tools to become part of the referral team.

You may think that because you are hiring experienced people, you don’t need to train them. Think again. Every company has a different approach—not only to selling, but to other important disciplines.

When I worked for a banking consulting firm, many clients told us that they didn’t need our credit training, as they were hiring experienced lenders. Within six months they came back to us, because they realized that every bank has a different way of doing a deal, spreading a cash flow statement, and assessing risk.

Experience is not a substitute for the way you do business. Train your new hires and your pros, not only in what they do, but in how to do it. Get the rocks out of the road and maybe, just maybe, your team will be one of the few to make quota this year.

5. Make referrals contagious

For referral selling to become how your team works, it needs to be more than the program du jour. It needs to be something your team wants to do. It needs to be contagious.

One of the world’s foremost experts on word-of-mouth marketing, Jonah Berger is a pretty smart guy from Stanford who wrote what’s probably the best book on the topic. He called his book, not surprisingly, Contagious: Why Things Catch On.

In this book, Berger explains there are six essential factors (or STEPPS) that make things catch on, including:

• Social currency: We share things that make us look good or help us compare favorably to others.
• Triggers: Ideas that are easy to remember spread. Viral ideas attach themselves to top-of-the-mind stories, occurrences or environments.
• Emotion: Emotions move us in irrational ways. This means that when we care, we share.
• Public: People tend to follow others, but only when they can see what those others are doing.
• Practical: Humans love giving out advice and tips, but especially if they offer practical value.
• Stories: People do not just share information, they tell stories.

Think about these STEPPS as you’re transitioning your company to referral selling. Are you providing social currency by publicly recognizing referral success? Are you tapping into your team’s emotions by helping them understand the value of relationships for sales? Have you made your referral program practical? Are you telling the right stories to connect with prospects and clients, and generate referrals?

What’s in It for Sales Managers?

What I’m proposing requires true leadership. It also requires some hard work.

The good news is, once you have the right commitments, executing your referral sales strategy will be one of the easiest things you will ever do. Everyone will be absolutely clear about those activities and metrics that are essential for success. Your decisions will be easy. A proposed project or a new business relationship will either get you to your goal, or not. As new opportunities arise, you will be able to say “yes” or “no” on the spot.

Now, isn’t that worth making a change?’

Want to give your team the tools they need to generate referrals (at scale) in the New Year? Invite me to speak at your next sales meeting or sales training event.

(Featured image attribution: fauxels)

(Note: The article originally appeared on NoMoreColdCalling.com.)

About the Author

Joanne Black is America’s leading authority on referral selling—the only business-development strategy proven to convert prospects into clients more than 50 percent of the time. She is a member of the National Speakers Association and author of NO MORE COLD CALLING?: The Breakthrough System That Will Leave Your Competition in the Dust and Pick Up the Damn Phone!: How People, Not Technology, Seal the Deal. To learn more, visit www.NoMoreColdCalling.com. You can also follow Joanne on Twitter @ReferralSales, or connect on LinkedIn and Facebook.