When Good Customer Referrals Turn Bad

This is a guest post by Keith Rosen, CEO, Profit Builders

(Editor’s note: This article originally appeared on ProfitBuilders.com)

There’s nothing worse than wasting a perfectly good referral that was hand delivered to you by a happy customer (associate, friend, family member, and so on).

Whether it’s due to poor follow up, poor service, a comment you made to the referral that you were better off keeping to yourself, or a sales tactic that turned the warm referral into a cold fish, these are just a few things you can do to destroy a referral and any possibility for a sale.

Think about what this is costing you? The more obvious cost would be the loss of a perfectly good selling opportunity. However, there’s much more at stake that you stand to lose. What about the person on your referral team (a select group who provides you with a steady stream of referrals)? This person is putting their neck on the line for you. Once your referral source gets wind of what happened, you can bet that this would be the last time this person ever sends you another referral. It not only costs you one possible sale, but all of the potential future sales that you have lost because you compromised the relationship you have with your referral source.

To take it one step further, what if it was a customer who sent you this referral? How does this customer now perceive you? Demonstrating this less than admirable trait to a customer may change their once positive perception of you and tarnish the trust and confidence they had in you. Not only have you lost the chance of getting any future referrals from them, but you now run the risk of losing this customer’s future business that you would have normally earned.

Just like your customers, referrals are a privilege, not a right. You don’t automatically deserve referrals, you have to earn them regardless of how long you’ve been in your position, known someone, or how much work you’ve already done for a customer.

Keep in mind that the players on your referral team are doing you the favor, so make sure that you appreciate their efforts in a measurably visible way. They are the ones who are taking time out of their busy schedule to help you.

Acknowledge, acknowledge, acknowledge

The biggest blunder people make is, once they start getting referrals, they forget to thank the person who provided them. Thank each person on your referral team when you:

1. Get the referral. Call or send a thank you card letting them know how much you appreciate them taking the time out of their busy day to send you a referral. Reinforce the fact that each referral will be taken care of and given the exemplary service and attention that every one of your customers deserve.

2. Meet with the referral. After you connect with the referred prospect, call or send a thank you card as well as an update on where each referral stands as it relates to your selling cycle.

3. Turn the Referral Into a Customer. Once the sale is made and the referral becomes a customer, rather than waiting until you have completed this project, immediately call your referral source and send a thank you card. This way, you are the first person to let them know their referral is now a customer of yours, rather than having your referral source hear it from the person who they referred to you.

Before you know it, you may not have to market or prospect as much as you think due to the influx of referrals that you are generating.

Keith Rosen is fanatical about your success. That’s why more top global organizations today chose Keith’s sales training and management coach training solutions. A globally recognized authority on sales and leadership, Keith is the CEO of Profit Builders, named the Best Sales Training and Coaching Company Worldwide. Keith has written several best sellers, including the widely acclaimed Coaching Salespeople into Sales Champions, winner of Five International Best Book Awards. He was inducted in the inaugural group of the Top Sales Hall of Fame in recognition for his outstanding contributions in sales and leadership development. Inc. magazine and Fast Company named Keith one of the five most influential executive coaches. Access his resources, newsletter, and blog at the Profit Builders website.