Customer Referrals Start with the CEO

"Getting in by referral is 8-10 times more effective than cold calling." - Nigel Edelshain, Sales 2.0

I have always been amazed as I look at the marketing and sales process of the organizations I have worked with to find that Referral Marketing and the use of referrals is non-existent.

As I have dug deeper into this I have found that the reason most organizations do not leverage referrals is due to the fact that the CEO does not do it either. My conclusion on why they don't seems a bit simple but I can't find any other reason.

The reason I have found is that referrals take time and work, something that most Sales and Marketing CEO's don't feel they have time for. You see in order to gain a referral you must spend time with your customers, the analysts that cover you and the journalists that write about you. In order for them to want to help you, you first must create a relationship that  is built on trust and respect for one another.

So when the CEO is pounding on the VP of Sales for greater growth and more customers, the VP of Sales reverts to the "Churn and Burn" game. They instruct their teams to follow up with the leads, educate those leads and close the leads, then toss them over the fence to the account managers for follow up. Thereby completely removing the ability for the sales person to get a referral (especially if the customer experience is negative after the sell).

However, if the CEO utilized the referral tactics to gain exposure through analysts, journalists and customer references, he or she would be more apt to direct the VP of Marketing and VP of Sales to do the same.

There is a wealth of leads in your customer base, problem is your not creating the relationships to take advantage of that gold mine.

Getting started with this method of organizational growth is easy, follow these steps and you will be well on your way to boosting sales and profits:

1. Start talking about your customers as your number one asset
2. Encourage all employees to speak with customers on a weekly basis, even if it is not their job
3. Make it mandatory for each executive to interact with your customers, add a metric for their bonus:
   1. This metric will be defined by the number of customer references they are able to gain each quarter.
4. Add a metric to the personnel in your organization that is responsible for customer success:
   1. This metric is defined by number of customer referrals they can get each month
5. Create a feedback loop for your customers to share their experience with your company, and make that feedback viewable to the entire company.
6. Last but not least, as the CEO you should be in contact with your customers every week, don't just use a newsletter, pick up the phone and call your customers, then share your experiences with the whole company. Make this a weekly discipline.

As the CEO you have to ask yourself, would I rather spend thousands of dollars in attracting, educating and selling to suspects where only 25% or so will buy, or should I carve some time and budget out to focus on leveraging our number one asset, our customers to get warm introductions.

Comments

[Printing Services]

Yes, I certainly agree. Referrals are way better and more reliable nowadays.

- Allen W.

[Adam Ross]

Allen, thanks for your comment, I appreciate you sharing your thoughts. I was talking with one of my customers the other day about this and they told me "Referrals are my way of giving back to you for your excellent service", that is a great way to think about referrals. People love to give back and help each other out so don't be afraid to ask for that referral.

[Mathew Harold]

Referrals tactic is a better way to boost organizational growth and boost sales. As the CEO is the head of a team in company so his words have more value and will be followed by all. So if the CEO will use referral technique it would be easier and the company can see more growth and profits. The above mentioned steps would be really beneficial for the business professionals.

[Adam Ross]

Mathew, thank you for your thoughtful comments to this post. I truly believe that great organizations and great leaders understand this methodology and execute it well. I hope more people will adopt this philosophy.

Adam