Customer Referrals: The Good, the Bad and the Ugly - SalesLatitudeIt’s amazing that salespeople rarely ask for customer referrals, especially since it’s one of the easiest ways to get quality leads. If you ask, they will most likely want to give you the referral since you helped them professionally and/or personally. It sounds so simple, but unfortunately it does not always work that way. So, that got me thinking about the good, bad and really bad aspects of getting customer referrals.

The Thing About Customer Referrals

You may have helped your customer achieve a major deliverable or a desired business outcome that will make them successful. But if your customer didn’t reach their desired outcomes when they told their management they would, then you’re most likely not getting that referral. This almost always happens when deals are oversold and under-delivered.

The Good

You do all the right things for your customer, you and your company. You built relationships with all the key stakeholders and shared the information you gathered with the customer and internally. You planned a strategy to ensure all details were addressed and completed an on-time, on-budget implementation that delivered business results quicker than the customer anticipated. Everyone wins and you most likely will not even have to ask for the customer referral. They will fall all over themselves to give you whatever referral you want or need.

The Bad

This time, you do all the right things for either you and your customer, or for you and your company. Inevitably, someone gets left out. If you do the wrong things for your company but you and your customer win, then you could ask for a referral and get one since the customer would not really be aware of any internal issues.

I remember a time when a salesperson worked on a contract renewal with a customer. The customer had been paying our company $5 million a year and he renewed the deal for $3 million a year. He won since he got paid some commission, even if not whole. The customer won since they paid less than originally budgeted, but the company had to find $2 million a year from other accounts to stay whole.

The minute you put you and your company’s interests ahead of your customer’s – fah-get-about-it – no customer referral for you!

The Really Bad

We have all seen this situation: The sales rep puts himself ahead of both the customer and his company. He gets paid but the customer and your company do not get what they want, when they want it. The customer and/or your company has to allocate a lot of extra work or money to the project, making the everyone lose face with their management. The deal was most likely oversold and under-delivered. In these situations, the customer and/or your company are trying to keep their reputations in check by making sure the failure doesn’t get out to the industry. No customer referrals will be possible here either.

Now, I realize that many of these scenarios could be proactively addressed by ensuring compensation plans penalize sales reps for bad behavior. But one key fact remains: happy customers equal good customer referrals. Have you asked for a referral recently?

 

Janice Mars, SalesLatitudeJanice Mars, Principal and Founder of SalesLatitude, is a sales performance improvement consultant and change agent focused on growing top performers to impact bottom line growth. With more than 30 years of experience as a senior business and sales executive, she helps companies build successful sales teams by maximizing their time and resources, selling from the buyer’s point of view, and strengthening the effectiveness of leadership. View my LinkedIn profile | Twitter