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Customer Referrals. For some reason this resource for prospecting is often overlooked. It’s as if we are walking on gold nuggets and don’t take the time to stoop down and pick them up. This is a very quick way to find prospects that are already warmed up to some degree. Here are some things to keep in mind when getting and using referrals:

1. You can get great referrals from both your small customers and from your large customers. The most important thing is your relationship with them; it doesn’t matter how big or small they are. Just because your contact works in a small company doesn’t mean that they don’t know a lot of people, some of which might be great prospects.
2. Be sure to help your customers qualify what a good referral would be. Instead of saying, “Do you have someone you might refer to me?” say, “I’m looking to build my customer base with $100M+ companies that need 24 hour service on their printing equipment.”
3. Ideally you’d like the referring customer to introduce you to the referral on the phone or in person. If that’s not possible, then an email or phone call from the referring customer to the referral letting them know you are going to contact them is the next best thing. If none of the above is possible then at a minimum ask your customer if you can use their name when contacting the referral.
4. Always follow-up on customer referrals and make sure you let the referring customer know what happened, and thank them too. If you routinely take this step you’ll find that customers will provide you with referrals without your even asking; this is your ultimate goal in the referral business.
5. When asking for referrals specify the number of referrals that you want. If you just ask for a referral you might get one, and only one. If you ask for three you’ll get three. “Debbie, as you know I’m always trying to build my business. I’m looking for companies that would use our chemical products, are located in the Denver area and have 100+ employees. I would be greatly in your debt if you could give me three names to work on.” Guess what happens next? Debbie gets busy coming up with three names for you.
6. Getting referrals is not only for established salespeople with long term customer relationships. I’ve frequently seen new salespersons get referrals from their new customer base. “Mark, I’m new and need to find some more good customers like you to build my account base. When I feel that you are completely confident in me I’m going to ask you for three referrals that I could contact.”
7. I’m not a big fan of monetary, or other, compensation when customers provide referrals. When the motivation becomes money the quantity of referrals picks up but the quality nosedives. Besides, would your best friend charge you money to set you up on a great blind date?

Customer referrals are a great way to quickly build your business and are one of the most overlooked tools in the sales business. As a final note, an interesting thing about customer referrals is that they also build your relationship with the referring customer.

If you’re not already a subscriber, click here (salesvitamins.com) to subscribe and automatically receive Sales Vitamins™ as new posts become available. © 2008 Scott R. Sheaffer

People ask me how I come up with material for this blog. It’s actually quite easy; all I have to do is pay attention to the sales behaviors that I observe every day. Some of the stuff I see truly fits in the category of, “You could not make this up.” Below is a conversation that I observed between someone that was in the final stages of making a big ticket purchase and the CEO of the selling organization who was “helping” his salesperson close the deal. I am not making up the dialogue that follows.

Prospect: “I have a few more questions that need to be answered before we ink the contract. I was hoping to hear from you last week regarding those questions. Are you still interested in moving forward with this?”

CEO: “Oh yes, we are very interested in having you as a customer. I would have gotten back with you last week but I’m just a busy CEO.”

Despite the CEO’s best efforts at being the CEO of the sales prevention department, the prospect actually did sign the contract and purchase the service. The customer in this situation always referred to the CEO as Jason “I’m just a busy CEO” Short (not his real name) after that. One cautionary note, CEO’s and presidents can absolutely be the worst people to bring along on sales calls. Don’t assume they have a clue about selling just because they might be paid more than you.

Where did this CEO blow it? He blew it because he made it loud and clear that the prospect was not his number one priority. The CEO also communicated that he thought he was a higher priority than the prospect. Individual prospects and customers want to believe that we build our world around them. Even though they know that we deal with other companies, they want to at least feel like they are: number one in our minds, our only customer and have 100% of our attention. Think about your personal experience with doctors. Even though you might be visiting a doctor that has 500 patients, if he or she can make you feel like you’re their only patient it scores big points with you. The same is true for you and your customers and prospects. Make each of them feel very special; they’ll pay you for your attention.

Have you ever fired a customer? I have on several occasions. It’s the most liberating and educational thing you will ever do in sales. When I say “fire” I’m talking about this kind of conversation with the not-so-desirable customer:

You: “Mr. Customer, we want to thank you for your business (well, not really but it seems like the kind of thing you should say at a moment like this), but we feel that your needs could be better served by another company (at this point you might want to give them the name of your most hated competitor…which I have actually done).”

Ex-Customer: “What!? You can’t do that. I thought we had a good relationship. Who is going to provide us our widgets/service in the future?”

Early in my career I had a public sector customer that was a pain in the neck to deal with, paid slowly and wanted us to sell them our products and services below our costs. One day the president of the company I was working for at the time blew into my cubicle and said, “Lose this customer. Fire them. Today.” I was a little nervous when I was actually firing them, but here is what I learned:

1. There are many prospects out there; don’t waste your time on bad customers who squeeze you on margins, are high maintenance, tie up resources and don’t pay their bills in a timely manner.
2. Bad customers will frequently try to bluff you into thinking that you are easily replaceable and that you should be happy to have them as a customer. The truth is that your knowledge of how they do business is very valuable to them.
3. You are more powerful than you think when it comes to your relationship with your customers. Don’t abuse this knowledge, but know that a sales/customer relationship is a partnership. A partnership implies parity.

Am I suggesting that you go on a wild customer firing spree? Of course not. But the process of eliminating a chronically high maintenance and unprofitable customer will empower you and free your time to go after profitable and professionally rewarding customers.

The sociological definition of a dysfunctional work environment would broadly state that as a consequence of a social practice or behavior pattern the stability of the group is undermined. It’s disturbing to me that the subject of dysfunctional work environments is one of the most popular business topics today. Most workplace psychologists agree that every company has some kind of dysfunction. There is no perfect workplace. That really shouldn’t come as a surprise to us since nothing is perfect in this world. Families, churches, schools, etc., none of them are perfect. People are messy.

While virtually every workplace has some level of dysfunction, there are levels and types of dysfunction that are tolerable and those that are not. There are books written about this and I have personally worked in sales environments where there were some really nasty things going on. The dysfunctional behavior I want to touch on in this post is that of management by intimidation. This one is particularly prevalent in sales management. The sales manager thinks, “If I put pressure on those lazy stupid sales people and show them who’s boss, I’ll increase their productivity.” The worst part about this “strategy” is that it works, but only in the short term. People will in fact work harder for a boss that is screaming at them, but only long enough to pacify him or her. While the sales manager is throwing his or her daily/weekly fits at selected individuals, these same individuals are planning their exit. The ignorant sales manager is also most likely naive about the outgoing salesperson’s plans to take their customers with them. One important note here. It has been my observation that management by intimidation is not gender biased. While I have certainly observed unbalanced individuals that were men, I’ve seen women that were equally as bad.

How can you tell if you are working for a sales manager that rules by intimidation? Here’s a quick checklist with some common symptoms:

Always fault finding
Various threats, most are veiled
Reckless and irresponsible behavior
Belligerence toward customers
Substance abuse
Temper tantrums
Needs subordinates to be completely submissive
People frequently comment about his/her irrational behavior
His or her boss also rules by intimidation (or a corporate environment of intimidation)

If you find yourself in one of these environments see if you can get moved to a different boss. This is a primary strategy although I have to caution you that if a company tolerates this kind of behavior from one manager, they’ll probably tolerate it from others. Your next strategy is to find a new company to work for. Please do not wait for the individual to see the errors of his or her ways and get better. That won’t happen. While everyone can have a bad day and say something that may hurt someone else’s feelings, a sales manager that continually rules by intimidation is someone you need to get away from before you internalize their toxic message.

We’ve all heard the expression, “In golf you drive for show and putt for dough.” I love that expression because it applies to just about every area of your life, especially sales. If you love golf there is nothing more satisfying than hitting a 300+ yard drive from the Tee Box. There is most assuredly a positive correlation between the distance driven and one’s ego gratification. But here’s the killer. Each stroke counts the same whether it’s a 300+ yard drive or a two inch tap-in at the cup. Things aren’t so satisfying if a golfer gets to the green in beautiful style and then takes five putts to get in the hole. Those short missed putts add up quickly.

Sales is the same way. Everyone with even an ounce of sales ability loves to meet that important prospect for the first time and make that first sales presentation. Don’t we all love making a good first impression and knocking them dead with our presentation skills in front of a group? When we do these things well, the sales process moves ahead nicely. However, “moves” means something completely different than “closes.” The sale is not completed until the decision maker gives it the thumbs up. After the initial meetings and presentations are over there are plenty of other details that need to be handled before the sale is completed. Get out your putter.

Because most sales professionals are good at the front end of the sales cycle, our prospects tend to judge us on the small things that follow instead, i.e., our putting. Prospects also know that they are seeing us at our best and at our company’s best during the start of the sales process. They know our responsiveness and thoroughness aren’t going to improve after the sale is consummated. For these reasons they put a lot of weight on how we follow-up with them on the details of the transaction as the sales process progresses.

I’ve seen many interested prospects turn sour when they realize that the salesperson and the company are all show and no go. Potential customers know that once they purchase from you that the day-to-day maintenance of their account will be nothing but details and timely follow-up. It’s your ability to handle the details during the sales process that will gain their trust and confidence. Go ahead and have your splashy sales presentations for show, but handle the details and follow-up for your dough.

It seems like every company I come in contact with has salespeople that are concerned they are going to be replaced by the company’s ecommerce website. They reason that if a customer can order on the web then why would their employer need to keep them on the payroll? They are right about one thing, eliminating the sales department at a company would result in massive savings. Believe me; if a company could find a good substitute for their sales department they would most assuredly eliminate it. For that matter, if a company could eliminate any department they would do so. It’s all about the money. But, eliminating the sales department is not in the cards for the vast majority of companies. Some facts, historical and otherwise, to consider:

Many thought that Sears and Montgomery Ward (remember them?) with their paper catalogs would eliminate sales representatives and retail stores. Well, we see what happened with that prediction.

Remember in the 1990’s how the soothsayers predicted that the Internet would mean the end of universities, retail stores, “brick and mortar workplaces,” etc.? Didn’t happen.

Let’s not confuse a customer’s use of a company’s ecommerce website with buying on that website. Depending on the product, 20–80% of buyers go to a company’s website before buying to research their purchase. When they have finished gathering information they contact a sales representative to purchase.

A little secret about ecommerce websites is that most companies frequently charge their highest prices there. Not surprisingly, corporations like that part of ecommerce. While customers may go to a company’s website to research their purchase, they will then contact a salesperson to negotiate the price. Most customers don’t want to give up that ability.

Even the major league dotcom companies have sales representatives. I’m talking about Google, EBay, Yahoo and others. That should probably tell you more than anything else. These companies are the Internet and ecommerce.

Guess what? People really like being with people; we’re social animals. People like to buy from other people too. Always have and probably always will. Think of your company’s ecommerce website as an informational resource for your customers and as a job aid to you. It’s also a great place to send those small customers that you don’t want to fool with. Relax. You have nothing to fear.

Let’s review for a moment what the sales performance distribution looks like in a typical sales force:

a. 35% will be average or slightly above.
b. 35% will be average or slightly below.
c. 15% will be significantly underperforming.

d. 15% will be significantly above the average.
e. Since the significantly underperforming roughly offset those that are significantly above average, about 70% of your sales revenue will come from average or slightly above performers and average or slightly below performers.
f. The larger the sales force the more likely these numbers will be true.

A sales manager has to consider the limited revenue impact (5–10% of total revenues) of the significantly underperforming group before deciding on remedial action. Investing time and resources with this group may not be especially prudent when one takes into consideration the limited total potential revenue gains in combination with their questionable motivation and skill set. In most cases you don’t want to put a lot of resources here.

The significantly above average group represents 15% of your sales force and 20–25% of your total revenue. Considering their probable existing motivation levels (i.e., high), their limited numbers and the realistic potential for significant growth it becomes obvious that training and coaching resources would not have a significant return when applied to this group.

The average performers represent 70% of your sales force and 70% of your sales revenue. Even a small improvement in overall sales with this group will make a substantial contribution to your revenue. This group is also very “coachable.” They are adequately motivated with at least average sales skills and are not normally prima donnas.

For most sales organizations with a sales force of 30 or more, allocating sales management resources with average performers will give you the biggest bang for the buck.

Some buyer behavior is incredibly predictable. One of those behaviors is their affinity for kits, assortments, bundles and packages. Putting groups of products and/or services together is appealing to purchasers. This is especially true as your products and services become more complicated. If you sell parts you have no doubt learned that customers love kits and assortments. After selling kits and assortments for years I learned that if customers are given a small, medium or large size choice they will almost always pick the medium. The lesson learned is that you need to spend most of your marketing and product resources on this middle product. The small and large sizes end up being bookends to what you are most likely going to sell. A big positive about selling kits and assortments is that eventually the customer runs out of individual parts found in the kit and needs to reorder.

Companies that sell services like to promote their service bundles and packages. The buyer is frequently confused about exactly what they should buy when it comes to services. When presented with a package or bundle of services that seems to cover everything they opt for it. One of the biggest closing lines in the service sales business is, “This is our most popular package.” Sold! Service customers also like buying the middle bundle or package; it seems prudent and quite defensible to their boss. Bundles and packages of services also have a way of leading to other purchases. “I’m sorry Karen; our XYZ bundle does not include 24 hour service. I can add that for $679.00 per month.”

Some companies foolishly don’t provide kits, assortments, bundles and packages to their sales force. If you work for one of these companies don’t despair. Make your own kits, assortments, bundles or packages! I learned early in my sales career that I could put my own bundles together and instruct the front office to invoice the collection of individual products as if the customer had just purchased a single item. Instant kit.

I’m a big fan of kits, assortments, bundles and packages. Customers like them because they can provide buying confidence and are faster and easier for them. They also lead to additional sales for you. Even if your company doesn’t provide them, start using this tool on your own.

When I was a kid I used to be captivated by the Wild West shootouts on Gunsmoke. For those of you under 40, Gunsmoke was a TV western. For those of you under 30 a western was a TV show about cowboys. Suddenly I’m starting to feel a little old. At any rate, these shootouts normally had one man standing at one end of the street facing another at the other end. They could not come to an agreement over their differences so they felt it best to draw their guns and shoot at one another; normally one of them died and the other was the victor. Occasionally both would die; more on that later.

When we have differences with our good customers we are often tempted to have a “shootout” with them. For example, let’s say you are having a disagreement with a customer about exactly when you said an item was to be delivered. You’re infuriated because you know you’re right and you’re going to show them they are wrong because you have the written documentation to prove it. Sure enough, you do your research and there it is, in black and white, with their signature. They are wrong and you are right!

But wait a second. Here is the important difference between the shootouts on Gunsmoke and a shootout with a valued customer. In the Wild West the victor didn’t care that his opponent was dead; in fact he was probably happy about it. You, on the other hand, have a different situation because dead customers don’t buy any longer, and you do care about that. You may have proven that you were right, but in the process you killed a high value customer. They will never buy from your company again and will happily tell anyone that will listen how bad your company is. Many customers have been “killed” in these kinds of shootouts. The overwhelming desire to be “right” is sometimes just that, overwhelming, even when it costs you commission.

Just like shootouts in the Wild West, sometimes both the customer and the salesperson are killed. We’ve all seen hot headed salespeople who strong-arm their customers at every turn, always needing to be right. Guess what happens to their sales careers? Short lived. They die along with their customers.

Even though a good customer might be wrong about something, resist the temptation to position the disagreement as a win-lose confrontation. No one likes to be backed into a corner and shown that they are wrong. Handle these situations with grace and keep that valued customer alive to buy another day.

Just like most of you who are reading this post, I’ve received a gazillion hours of sales training and coaching. There have been times when I was ready to receive the input and other times when I was just too busy to give it much weight. I not only have received sales training and coaching, I have also been on the giving end too. From my experience I have learned that most sales professionals need to take a more active role in their training and coaching. Since you have to allocate the time anyway, why not take control of these experiences and use the time more effectively.

Sales managers and trainers are implored to limit the amount of information they give to salespeople in a training or coaching session. Let’s face it, there is a limit to how much information we can realistically absorb and implement. The reality is that most of the time sales managers will give you 14 areas to work on when they coach you and sales trainers will cover 38 topics in a training session. Your challenge, and this is where you take control, is to nod respectfully as your trainer or manager goes on and on, then select one or two things that you will actually work on. I’d rather you get something out of a little instead of nothing out of a lot.

The second thing you can do to take control of your sales training and coaching experiences is to use classroom training time more efficiently. What do I mean? Let’s face it; you aren’t paying attention every second during classroom training. Use this extra bandwidth to think about your customers and prospects. Which ones do you need to work on more aggressively and which ones do you need to stop wasting time on? Is there a product or service that you need to propose to a promising prospect? Which customers have you let drop between the cracks over the last few months? Work up your plan. What’s great about this mini-brainstorming-session is that frequently the instructor will say things that will give you ideas that you can use in your planning. When I used to attend sales training I would always come away with several pages full of customer and prospect action item notes. How many times do you actually take the time to just sit down for an extended period and think about your customers and prospects?

Sales people typically aren’t always thrilled about having to take mandatory sales training or getting coached by their sales manager. But you can select the information you want to process and use the time for your own benefit to make it much more productive.