Chances are you’ve heard the saying, “referral business is the best business” more than once in your career. And there’s plenty of hard research to support that.
For example, there are approximately 2.4 billion brand-related conversations every day, according to data from the Word of Mouth Association. People often talk about products or services, and companies they buy from.
As reported in The New York Times, referrals account for 65% of all new business. Thus, two out of three buyers act because someone they know has pointed them to a specific product or service.
Nielsen research backs up the potential of referral marketing, and says people are four times as likely to buy when a friend makes a referral. What’s more, research published in the Journal of Marketing found that referrals produce higher profit margins than other customers — because of the lower cost of acquisition — stay longer and thus produce a higher lifetime value (for example, when compared to buyers attracted by a discount or two-for-one offer).
Chances are you’ve already taken Referral 101, and you know to (1) “plant the seeds” early in your relationship, and then (2) find a good time to ask contented customers for the names of others who might benefit from your product or service. Top performers do this all the time, and some reach the rarefied air where 80% of their business comes from high-potential referred leads.
But there’s new research indicating that you can take your referral quest to the next level, creating even greater sales opportunities. Let’s dig into it and then see how you can best apply this new learning in the real world.
Find the opinion leaders
A study in the realm of pharmaceutical sales found something that can apply to nearly any B2B or B2C sales situation. In any market there are people whose opinions really matter. And these key influencers are not necessarily the people on everyone else’s radar screen.
The researchers found that, while the pharma sales reps had been targeting department heads at teaching hospitals or the leaders of highly visible group practices, they had overlooked one physician, anonymously referred to as #184. Yet, when the researchers asked other doctors whose opinion they trusted, it was Doctor 184 whose name came up over and over again.
In the intensely competitive world of pharma sales, that doctor was a critical target. If she got good outcomes with patients from a new drug and recommended it, she could influence hundreds of other physicians in the market. And if she passed the word that a particular sales rep was worth seeing, that would carry a lot of weight, too.
Doctor 184 was no “rock star” or academic heavyweight. She didn’t speak at conferences or chair committees. But her opinion was trusted, and she shaped opinions in her market.
That’s a key point. Opinion leaders don’t wear uniforms or belong to a union, and they may not stand in any way that lets you easily identify them. But they do get asked for advice a lot, by people looking for actual answers. And that gets us to the “next level” referral question, one that can open doors to many more high-quality prospects and enhance your own visibility and reputation among potential buyers.
“Whose opinion do you trust?”
You’re certainly on the right track to ask happy customers for the names of other potential buyers. That will not only turn up good leads, but also acknowledge your customer’s own influence. It communicates that you think of them as someone who is well connected and whose name would carry weight, too.
But here’s the question that will unearth an even better prospect: “I know how much people trust your opinion, so I appreciate your willingness to recommend us. But while we are on the subject, whose opinion do you trust?”
Ask that of every one of your customers and prospects, and you’ll most likely find out who is shaping opinions in your market, just the way Doctor 184 does. It may confirm what you already know, but it could bring to the surface an opinion leader no one else knows about — and one your competition has overlooked — because they aren’t asking.
What’s even better is that you now have a perfect way to approach this opinion leader. Let’s say everyone looks to Joe Marshall for advice. You can reach out to Joe and say something like, “I’ve been asking my customers who they trust, and your name keeps coming up. Fred at Monolith Industries, Bill at Mountain View, and Sally from Big Fortune. They all tell me they respect your opinion the most. I’d sure like to meet and get your insight on _______________.”
It’s very likely that Joe will agree to a meeting. He may or may not buy from you. But either way a conversation with Joe will have a high payoff. Because he’s connected to the same people you are, networked in the market, and that relationship can lead to many high-potential opportunities.
Michael Boyette is the Executive Editor of Rapid Learning Institute and thought leader for the Top Sales Dog blog. He is a nationally recognized authority on selling and has written hundreds of articles and training programs for sales reps and sales managers. Michael has managed programs for US Healthcare, Bell Communications Research, and DuPont. Connect with Michael via Twitter @TopSalesDog.
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