How much time do you or your sales team spend looking for new prospects rather than developing a stronger relationship with your best clients? Referrals can be one of the most effective ways of gaining new business but are often under-estimated.
When asking businesses if they use their existing clients to help them find new business, the answer I typically get is; “I’ve already gotten my current clients to buy, it’s time to move on to the next prospect!”. OK, but how do you get that next prospect? There’s business directories, newspaper advertising, cold calling, networking, trade shows, radio, TV.. The list goes on and on. What’s missing? Asking current clients for qualified referrals.
A few months ago, I was talking to a business owner whose company has serviced the Bristol community for more than 50 years. He spent nearly an hour discussing the difficulties of identifying and landing new business in today’s market. He informed me that the traditional mediums aren’t as effective as they used to be and that most sales people struggle to find new leads. I asked him if he provides his customers with a good service, and he was proud to say that he does. He also mentioned that he has between 175 and 200 current customers and that he hadn’t received any complaints for more than six months.
The next question I asked would tell me what I really wanted to know, and what I probably already knew; I asked him if he asks current customers for more business or for referrals. He then explained that he was much too busy taking care of current orders and managing his sales staff to bother his current customers with that type of request. So, he has 200 satisfied customers that it took him years to find, but he still thinks that the best way to grow his business is to continue working on strategies that he already admitted doesn’t work very well? I next explained to him that it would make more sense to ask those 200 satisfied customers if they wouldn’t mind helping him find a new client. After all, has he not earned the right to ask after years of great service?
For the first time during our meeting he was silent. Although a little embarrassed, he admitted that I was right. In the bestselling book The Power of Focus, the authors recommend the following steps to growing your business:
- Create a list of your most valuable ‘core clients.’
- Take a close look at this list and review the amount of time you spend with these clients. Is it sufficient? Do you enjoy quality time with them, or just a few seconds on the telephone?
So, how do you identify and stay in touch with these core clients?
- Determine the characteristics of your best clients. These clients typically bring you the most business (and profit), appreciate your product/service, regularly refer you to others and are strategically related to your target market.
- Compile a simple strategy for keeping in touch with these clients. This could include a phone call, lunch or stopping buy to visit their staff. The key is making sure that you have regular and meaningful contact – tickets to the big game every 6 months isn’t necessarily good enough. Remember, the stronger these relationships and the more satisfied these core clients are, the better and more qualified referrals will be.
- Once you are satisfied that you have adequately developed a solid relationship with your clients, it is time to ask for those referrals. Don’t just send your client an email or mention it in passing. Remember, you have earned the right (through the delivery of a good product or service) to ask for this referral. Schedule a meeting to talk about your request and remember to be specific about the perfect candidate for your services.
Now, I am not saying that prospecting is a bad idea. Every business needs new customers and prospecting has to be a key component in your growth strategy. But before you hire a new salesperson or send out another direct mail piece, make sure that you have a solid strategy for developing meaningful relationships with your best customers. These relationships will result in your most qualified and profitable prospects.
I encourage you to spend the next few minutes thinking about your best customers. Who are they? And more importantly, when is the last time you spoke to them? Start your list today!