Two blog postings on referrals hit my blog reader this week. Is this national referral week?

One from Paul McCord over at Sales and Sales Management Blog on developing a Referral-Based Mindset.

Another one came in from Clayton Shold’s Salesopedia where he posts a podcast from Joe Heller speaking on, “Why Referrals Work Best”

Well, of course referrals work best! They always have and always will. And in these days of caller-id and effective spam filters, it’s a wonder that any cold call or cold email lands a prospect.

But I wonder if customers are really the best place for getting referrals. They’re great at giving references (assuming you deserve them) but referrals? I’ve argued before that most customers don’t have the right DNA to actively generate referrals for you. And if you read/listen to these two new blog postings, you’ll quickly realize that generating customer-based referrals is A LOT of work. Maybe cold calling might be easier for some sales reps than these programs. Or maybe using customers for references instead of referrals is a more effective plan.

Two recent postings by Jan Visser and Paul McCord got me thinking about how to best use customers to increase your business. As the chart from eMarketer below says, business decisions are heavily influenced by colleagues’ word-of-mouth. Naturally, sales people try to get referrals from their customers to gain new ones. After all, they’re the best referral you can get! But as Paul pointed out, having your customer say, “Give so-and-so at this company a call and use my name” is often not much more than a cold call. Paul and I agree that it’s much better if they contact so-and-so and make the introduction directly. But they often won’t.

Why is this? Why won’t customers give you referrals? Or as Paul prefers to ask, “Why won’t customers make introductions for you?” There are several reasons but the primary one is that customers don’t really know how. It’s not in their DNA to voluntarily call someone up and tell them about your solution. However, they will respond to a request for feedback on your solution.

The chart says that the top influence on buying decisions is from colleagues. However, the chart does not suggest if the buyer received a call or made the call. I will bet that it’s the buyer making the call to their buddy, “Hey, do you have any thoughts on this product?” or “I have this problem, do you have any idea on how to solve it?” Since Customers often give references instead of making referrals, why not use them that way? If customers are uncomfortable making referrals/introductions then don’t use them that way. Get your referrals somewhere else and let your customer give the reference.

Expect your customers to receive calls on your behalf but not make them on your behalf.