Rx For Slow Business

When there are a thousand reasons why business is slow, it may be time to follow up on past referrals.

I had lunch the other day with a friend of mine who sells furniture. He told me that business for him was starting to get a little soft. I asked him why. He said he had it figured to a lot of things:

•The economy is starting to soften.
•We have a new President and people are waiting to see how things shake out.
•The car business is way off and there is a saying "How GM goes, so goes the nation."
•The Dot.com freefall has cost a lot of people a ton of money.
•His company has a new sales manager and he doesn’t know what he’s doing.
•The banks and finance companies are starting to tighten up their credit policies.
•People are worried about a possible recession.
•Summer is coming and families are saving for a vacation like Disneyland or a cruise.
•The competition is killing them.
•People only shop price today. Customer service is a thing of the past.

Wow. If "excuses" were an Olympic event, this guy could be a gold-medal contender. I asked him exactly what was he doing to try to turn things around. He said he was out of ideas. So then I asked him if he thought about asking for, or following up on, past referrals. He said he didn’t like to ask for referrals, doesn’t want "bird dogs," and doesn’t want to impose on people. And therein lies the problem.

Referrals are a great source of new customers, but it can’t work if you don’t ask. The problem is we don’t think about it when writing up a sale.

The first thing we usually think about is how much we’re making on the sale. Then we worry about whether the check is going to clear or if the contract is going to go through. We don’t remember to say, "By the way, we get a lot of new business due to referrals from others like yourself who are very excited to be new waterbed owners. Who do you know that also might be in the market for a quality product like this?"

Step One: Ask For A Referral
Asking for a referral is step one. You have to ask, and you have to use a little personality at the same time. Believe it or not, most of the time you will get a name… sometimes two. Then just let it go. Don’t start with, "I’ll give you a check if they buy," or "If it leads to a sale, I’ll give you a commission." That puts them in an awkward position. Friends help out their friends. If you have made them a friend, it’s easy to ask for the name of a referral.

Step Two: Follow-Up
Step two is a little different. You have to follow up the referral. That’s tougher. It’s almost like a cold call. But if you really want more business, you simply have to do it. Just pick up the phone and call. If you get an answering machine, just leave your name, phone number and a message that you’ve got "good news" for them. Nothing more. People love good news. They will probably return your call. When you finally get a chance to speak to them (either by you calling them, or when they call you back), explain to them that you got their name from the customer who referred them. Be nice. Joke with them. Get them to be your friend on the phone. Don’t try to sell them anything. Just try to get an appointment for them to come in to meet you personally. You could tell them that you would like their opinion on a new product that just arrived. Offer them something of perceived value for stopping in. (Lottery tickets, coffee mugs, or T-shirts work great).

There’s a very good chance that if they have even the remotest amount of interest they’ll come in to see you. If they don’t, and you have established some rapport with them over the phone, ask them if they know somebody who would be interested in what you sell. Tell them you appreciate anything they can do to help. Again, niceness pays off. Asking for referrals takes a little bit of a skill you have to ask at the right time. Ask when they are the most excited, after they sign the contract, when they realize they are finally the owner of your product and can’t wait to use it. A day later will be too late. Do it before they leave your place of business.

If they say that they don’t know anybody, don’t belabor it. Let them think about it. They might even call you back in a day or two with a name. Or a month later they could mention your name in conversation with someone, remembering that you asked for referrals, and suggest coming in to see you. It just takes that first step of letting them know that referrals are an important part of your business. They could provide you with an endless stream of customers, and those slow periods will pick up faster than you think.

Editor’s Note: For a more detailed treatment of asking and getting referrals see Cathy Finney’s 2-part series posted to www.furninfo.com February/March & April/May 2001 FURNITURE WORLD Magazine.