Written by: LMiller | March 11, 2015
Why Referrals Fall Through
Originally published by RainToday.com
Good news: you get plenty of referrals. Bad news: many of these sales conversations start out strong but then fizzle out. Here are three reasons why even the best referrals don’t become clients and how you can prevent these dynamics from stalling your sales.
1. Buyers Are Overwhelmed with Options
When buyers are in the market for something, the first thing they do is ask around. They go to their colleagues and friends ask for recommendations. And those people flood the buyer with possible resources.
You know your referred buyer is in overwhelm mode when they can’t be specific about what they want. They have received too much advice and don’t know what to do next. Each provider recommended to them has a different approach, and they can’t compare apples to apples.
The best thing for you to do in this situation is to be the benchmark. Rise about giving advice about what the buyer should do. Instead, help them get clear on what they really need. If you help the prospect create benchmarks, they will use those criteria to choose you.
Example: An author was referred to me about getting speaking engagement after her book hit the market. She was also talking to five other agencies. While everyone else was telling her how to get those speeches, she and I discussed overall market dynamics and what kinds of speeches would be best for her. When she asked the other agencies about those types of invitations, their answers were general and evasive. I became the frontrunner immediately.
2. Buyers Are in Search Mode
You talked to the referred buyer several times. You thought the two of you had a great connection. The buyer seemed genuinely interested in your work, yet they didn’t select you. You found out later that the buyer did not hire anyone. What happened?
Many referrals are not ready to buy. They are mildly interested in an endeavor and are trying to figure out if they want to move forward. In the spirit of providing value, consultants offer free advice about approaches or options during their conversations with the buyers. That information falls on deaf ears, however, if the buyer hasn’t decided whether to proceed.
You know the buyer is in search mode when they don’t express passion for the project. They seem interested but not committed. There is no timetable or urgency. They have an open-ended discussion instead of asking specific questions that would help them choose an option.
If you find yourself in that type of situation, you want to ask the buyer about their lack of readiness without being confrontational. Questions such as, “How long have you wanted to do this?” or, “What makes this a good time to proceed?” will tell you everything you need to know about their sense of urgency. If the buyer isn’t sure they want to jump in, ask them, “What information do you need in order to make a decision one way or another?”
Example: I was referred to a B2B company that wanted to compete in a crowded market. They had no idea how to stand out or what their next steps should be. All they knew is that, “It was a good idea.” After I asked them a few questions, they understood the pros and cons of their decision, and they were excited about moving forward. Because I got them off the dime, I was the frontrunner.
3. Buyers Don’t Understand the ROI
Many buyers understand that they need to solve the problem and are ready to invest. But when they don’t see the full value of that solution, they balk on price. The real problem is that they calculate the return on investment (ROI) too narrowly.
You can tell a buyer is limiting the ROI by the way they frame the challenge or initiative. It’s natural to focus on a problem that requires an immediate solution. When they concentrate on one department o r one aspect of the challenge, however, you can safely assume they haven’t considered the bigger picture.
Your next best step is to ask what I call “the impact” questions, such as, “What is the impact of XXX if we implement this solution?” Most of the time, the buyer will expand the return on investment without you suggesting it. Even if they don’t know the impact, these questions open the door to exploring the value.
Example: A former corporate executive turned entrepreneur was referred to me after asking colleagues if they knew anyone who could help her get high-fee speaking engagements. I had a brief discussion with her, after which I asked, “What do you think the impact would be on scaling your business if you raised your profile in this way?” I heard silence. Then she asked, “What do you think would happen?” We laughed, and I told her stories about other opportunities my clients generated. By the end of the conversation, she understood the full value of my work. And my fee didn’t seem unreasonable.
Use Your Good Will
It’s easy to assume that a strong referral means a done deal — not in this competitive market. All referrals do now is provide you with a temporary benefit of the doubt. For a moment, your credibility is assumed. When you use that good will to head off common obstacles like the ones above, you can get more clients with ease.