Every salesperson knows that referrals are the best way to crack into a new account. So why do less than 10% of B2B salespeople even bother to ask for them?
In this episode of The Future of Sales, Joanne Black, America's leading authority on referral sales, discusses the 5 exact steps sales teams can take today in order to start receiving and converting referrals into closed deals.
Sellers can agree that referrals lead to more closed deals for many reasons:
- There is an immediate trust between you and the buyer.
- The odds of a prospect replying increase dramatically versus cold calling/emailing.
- There is less/no competition from other companies.
"Buyers refer you, not your company. It doesn't matter what company you work for, if (a buyer) knows you, trusts you and likes you, they're going to refer you."
The "No Bullshit" Takeaways
- Learn how to leverage personal relationships with buyers to get warm intros.
- Discover the 5 specific steps to implement a referral-centric sales strategy.
- Get key tips for going through the referrals process with a customer.
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Sahil Mansuri: Hi again, I’m Sahil Mansuri, CEO and co-founder of Bravado. And today, I’m honored to be joined by America’s leading authority on referral sales, my dear friend and author of two books on sales and runs a website called No More Cold Calling, Joanne Black. Joanne, welcome to the Future of Sales.
Joanne Black: Well, I’m looking forward to the future because we have nothing to do with the past, can we? We can’t change it.
Sahil: That’s so right. That’s so right. So, Joanne, before you get into it, I’d love for you to just give a little bit on your background and kind of the platform that you’re building and the work that you’ve done in elevating the craft of sales.
Joanne: My entire career has been in sales and sales management and I never thought I’d be in that career, but I have been, and I started No More Cold Calling in 1996 after I’ve worked for a couple of different consulting and training firms. And I began not thinking I’d be focused on referral sales. I really didn’t think that at all. I just wanted to consult around sales and sales strategy. And actually, my first client, my very first client who was a referral was doing a customer satisfaction survey at that time and it was fast track, several rounds. And on the last round, I added a question. I said, “Would you be willing to be a referral to this company?”
Now, they surveyed 50 of their best clients. Now, the scale was one to seven, seven was high and the results came back 6.5. So, 50 of the best clients said, “Oh, sure, I’d be glad to refer you.” Were they asking? No. So that came easy. Aha, wait a minute. I knew that my best business had come from referrals. So, what I did is I started asking a lot of salespeople and sales leaders I knew, “Do you like to get referrals?” “I would love them.” The best business, we’re pre-sold, they trust us, our sales craft is shorten, we don’t have competition. We convert, well, more than 50% of the time. There’s no cost to sales, et cetera, et cetera.
So then, I ask the next question, “Well, then do you have a systematic discipline referral process with metrics, skills, and accountability for results?” Well, you can guess the answer to that question. In 1996, it was a two letters “N-O” and it’s the same today. So there’s this gap, right, on the one hand we love it, on the other, yeah, of course, we get referrals from time to time, but it’s not the way we work every day. And so I had to figure out what gets in the way, what’s the problem here? So I developed a system to close that gap.
Sahil: Amazing. So Joanne, your story is I think at once very interesting and at once very, very common which is to say there are a countless number of sales teams and sales leaders who know that referrals are your best source of new leads, right, and referrals are so powerful. But there are a few points where I think there’s some disagreement. I think first of all, the definition of what is a referral varies from company to company. I think the strategy of how to get referrals is most often absent inside of companies.
And then, what replaces referrals is an army of SDRs and BDRs that are, you know, weaponizing calling and emailing and trying to beat buyers into taking a meeting with an account executive. So why don’t we kind of break down these three steps and why don’t we start by trying to get a definition of what exactly is a referral?
Joanne: Yeah, my definition and I stick to it is - a referral means you receive an introduction. So, that person knows you, expects to hear from you, they know the business reason they’re talking to you, and it’s the one call meeting, that’s it. You get the introduction, you get the meeting. It could be a phone call or it could be an in person meeting, it could be a video chat, whatever. Now, there’s a lot of disagreement about that, so I say there’s no such thing as a warm call. I define cold outreach, which could be phone, email or social as contacting someone who doesn’t know you and doesn’t expect to hear from you. It doesn’t matter how much research you’ve done, you’ve been their events, you come up with a phenomenal subject line, it doesn’t matter, they don’t know you, they don’t expect to hear from you, your outreach is ice cold, and the research shows it can take 8 to 15 touches to reach someone. When you get the introduction, you get a one call meeting. That’s the definition.
Sahil: Okay. So I think the concept of a one call meeting is highly desirable to the vast majority of salespeople, sales leaders, even buyers I’m sure would appreciate that and yet, that is by far not the industry standard. Where is the gap? What are we missing?
Joanne: How much time do you have?
Sahil: Hit me, Joanne, I got all day.
Joanne: We were missing a lot of things, so that’s what I had to figure out. So, there’s a lot of things that are missing. Basically five things. The first is there must be a strategy. The leadership, senior sales leadership must put that proverbial stake in the ground and say, “Referral selling will be our number one outbound prospecting strategy.” Now, people get a little freaked out when I say that, but what it means is, the other things you’re doing stay the same, you know, you have a social media strategy of your blogs, your webinars, your website, your podcast, everything you’re already doing.
But instead of dialing for dollars, so to speak, you know that referrals, when you’re asking, we’ll get you the business you want. And this is mainly for account executives who need to develop relationships. Internal teams, typically, it’s more transactional. Okay, so number one, strategy. Number two, metrics. We need to be able to measure referral activities as well as results, right, because revenue, which is the result is a lagging indicator. We can’t manage the revenue but we can manage activities. So referral activities, we need to agree on what they are and we typically would backend to that number.
But it would be the number of people we’re going to ask every week, every week, and then, the number of referrals we receive, the number of referral meetings we scheduled, the number of referral meetings we conduct, and then, it would typically go into the CRM, it’s an opportunity and nurture whatever you need to do with it. So if we agree, let’s do a little math here, if we agree that referrals, when we’re introduced to our decision-maker to the right people become clients, minimum of 50% at the time. Typically, more but 50% is easy math.
And so, say in a year, I need to get 10 new clients, you know, do any multiple of it or cut it in half, it doesn’t matter, it doesn’t matter. It depends on whether you’re talking about an SMB or enterprise. And so if I wanted to get 10 new clients, you might think, “Well, I just need to ask 20 people.” Oh no, we don’t need to ask 20 people, we need to ask 40 or more, and here’s why. Because many times, you will get directly to the decision-maker, sometimes it’s somebody in between because you always go where the relationship is.
So I hear what you said. Well, I don’t know such and such person at QZP company but I do know George there. I can introduce you to George. I want to talk to George first because then I can get a lot of intel, right? And I can find out so many things. Actually, this just happened this morning. I was introduced to someone and we had this great chat and he had invited the VP of sales to be on the call. The gentleman I talked to, we had a 30-minute call, by the way, it went an hour. And he came up with other ideas I had never thought about that it just blew my mind about what the work we could do together that was really aside from what I could do with the sales leader.
So we did two things at the end of that call. One, he set a calendar for next week to talk to the sales leader with him and two, I’m going to be in his city in a couple of weeks and we’re going to meet in person as it turns out where I’m going to be, listen to this, it’s around the corner from his office.
Joanne: So I’m just going to walk around the corner, you know, so you know, serendipity is yes, but specific, yes. So, that’s how it happened. So we could say 40 people, but I try to be safe, I want to look at 60. And knowing we might have a few interim steps there.
Joanne: So if we have those interim steps, it’s going to take us a little longer, but we’re still building those relationships along the way and that’s what it’s about. So, say, we talk to 60 people and say that 20 of them say, “You know, I’d be glad to help you, but I really can’t think of anyone right now.” When that happens, it’s a couple of things, I mean, they’re not ready for the conversation and sometimes they don’t even know. But they may truly not be able to think of anyone or we haven’t been specific enough in who we’re asking for or haven’t done our research beforehand to find out who some of their connections are. But say that 40 people agreed to introduce you; well, with the 50% conversion rate, that’s your 20 new clients. So, 60 would be a minimum, but my goal even though I don’t need 20 new clients in a year, my goal is to ask two people every week because buyers don’t always work on our timeline.
Joanne: I mean I have people who’ve made introductions and I always get a response because they’ve been introduced by someone they know and trust. I always get a response and, you know, somebody was in a new job, somebody was doing excessive traveling and we will talk. But, you know, it may not be tomorrow. There was someone else I was introduced to, I spoke to him the first time, I think it was in January. Again, 30-minute call went an hour. He was in the middle of doing plans. Referrals, he hasn’t thought about it. He says I need to. I send him my books. We talked again and he said, “I’m developing my plan and I will have it ready next month and let’s talk again then.”
Because he had to do certain things first, you know, we need to go where the buyer is, not where we are. So, metrics -- first, strategy; second, metrics; third is skill. Referral selling is a skill. It’s a behavior change for how to ask. Fourth is accountability. So unless people are accountable, there’s no behavior change. And then, fifth is reinforcement and coaching because without that don’t even start. So, those are the five steps, strategy, metrics, skills, accountability, and reinforcement and coaching. With those five, then people shifts from the way they’re working to making referrals selling the way they work every day.
Sahil: I love it. And I think that having such a programmatic approach to it is really important, especially in today’s day and age where, you know, most sales leaders and sales teams are so reliant on process, right. I think that we have become more and more methodical in the way that we approach selling. And so, when you are asked to do something that is outside of the bounds of what you normally do, a.k.a. I’m normally setting down and firing off a hundred cold emails and then, I’m making a hundred cold calls and then, on the next day, writing a hundred cold emails, all right.
And then, all of suddenly it’s like, “Oh, and then, by the way, go get a referral.” Then, people are like, “Well, yeah, that sounds great and maybe I’ll ask someone,” but then there is no structure to it, right. And I think that that’s what makes it really tough. And so, I love that you have a process behind it. I want to ask one question though, which I think has come up a number of times when we’ve been discussing referrals both you and I and also within the Bravado community. What do you do if you don’t have a ton of clients already?
So I think, you know, going back to your math in your example, you’re saying, okay, you want to ask two people a week. Is that two customers already? What if you’re a small startup and you only have 10 clients or what if you’re a new account executive and you don’t have a ton of relationships yet? How do you get the snowball rolling down the hill when, you know, maybe you don’t have such a big client base to start with?
Joanne: It’s not just client. I mean, and so I’m going to give you an opposite example. I have a client I’m working with now and it’s a segment of a larger company and they somehow got it in their heads, they thought of referrals as within their business unit. So, you know, this one is doing some kind of consulting and it’s like three or four different types of consulting. And if I’m a consultant in there one thing and I hear a need for another, I’ll refer it. So, they thought of it as internal referrals. They never even thought of it as, “Oh my gosh, we can ask our client, we can ask our network, we can ask everybody we know.” So, clients are important. And so what’s happened is even though we have an established network of clients I ask people, “Have you asked every single person you’ve connected with during the buying process for a referral?” The answer is always no.
Sahil: Of course.
Joanne: You know, they’re thinking, “Oh, it’s just a head honcho,” right. But we all have relationships and we don’t know who people know until we asked, so that’s huge. Now, if you’re new to a company, you’re a startup, you’ve been to other places, you have previous clients, or you have lots of relationships, and this is a nuance and it’s really important, people refer you, not your company. So Sahil, you did other things before you started Bravado. It doesn’t matter what company you work for, if they know you and trust you and like you, they’re going to refer you because when we give a referral our reputation is on the line, that I need to know when I refer you, you’re going to take care of my contact as I would.
And if I know that and I know you and you have integrity and you will follow up, I know you wouldn’t have joined this company unless they were good and did good work. It’s you, it’s not the company and that’s a really important distinction.
Sahil: Okay. So I love that, right, because that is our mantra at Bravado: the personal reputation of the sales person is as critical as the reputation of the product and the service. And I think that one of the things that we have tried to do and when I say we, I mean, the modern sales industry that has really kind of become digitized over the course of the last five to seven years with the prevalence of, you know, sales automation platforms and all these other kind of tools and things that have become, you know, widely adopted across sales teams is that we have automated the humanity away, right. We have automated the -- we have tried to create -- it doesn’t matter who is on the other end of the line, it’s just yet another sales person at, you know, Salesforce or Marketo or whatever, and I’m not picking on any one company but generally speaking.
And in fact, the other thing that I see is this wide adoption of the concept of territories and named accounts, which is to say that I have these 100 accounts that I need to work. And those 100 accounts are the only ones that I can work. And now, if I get intro-ed to 100 first account and it’s from someone I know well who connects me to somebody, but that account isn’t in my name, now I have to give that contact and that relationship up to whomever is assigned to that account. And I have always felt like that was so -- it creates a really poor incentive structure in the sense that at that point I’m better off just cold calling the crap out of the 100 companies that are in my name because if I get intro-ed to someone that’s not in that group, then I’m going to have to give up the account, I’m not going to get to work in, and it feels very buyer unfriendly.
I can see why we want to do it as a sales team because it creates structure and it’s like really clean, you know, dividing territories and stuff. But would you agree with me that it doesn’t set up the right incentive for long-term relationship building between buyers and sellers?
Joanne: It doesn’t. So I think as an organization, they need to look at that, and organizations handle it differently. So, some would say, so you got an introduction to someone else’s account and so some organizations would say take it and run with it and then, give the other account executives, another one of yours which you could give up. So, that could happen. Or they may decide that the other AE will get a percent, they’ll get something. There’s all different ways of working it. And sometimes accounts will respond based on proximity, so based on the relationships you have and not on geography.
So, you know, it really means the organization needs to step back and rethink their territories and their strategy. But here’s the other thing that when you’re asking for a referral, if you have this 100 account, you’re going to find people who know people on those accounts. So I think it’s a one, that might be the 101, might be the rogue and you don’t want to make it an everyday thing. You know, unless the organization is set up that way that you could get introductions to whomever, right, and whenever you do it, it’s your account. I mean that’s another way of working. But most organizations are set up that way, so you really need to know what will work and what won’t in your organization.
Sahil: I would say that, you know, just drilling into this topic a little bit more because I think it’s one that we hear a lot at Bravado is, “Oh, I want to use your service in order to get more referrals, but I’m worried that I’m going to get intro-ed to an account and then, that account is going to be in someone else’s name.” You know, and maybe just call me curmudgeonly about this, but I don’t understand why it is that we have such an obsession with territories. Again, I totally get why we do it from the standpoint of the vendor, right. Like as the VP sales, you know, I have 50 sales reps, I have 100 sales reps, I need to give them all equal fair share and an opportunity to make their quotas, so I’m going to like assign 100 accounts each and ten, I’m done with my territory planning.
So, it’s easy operationally, but I also think that it is really painful to create an incentive structure that is if I build a great relationship with the buyer at Coca-Cola and the buyer of Coca-Cola is really good friends with the buyer at, I don’t know, Georgia Pacific and then, but Georgia Pacific is not one of my accounts, so then I’m not going to be as incentivized to go and get that referral. Overall, that just hurts the business, right, because the relationship is -- and again, you touched on this, Joanne, which I think is so true is that the relationship is between two people, not between two companies although there is a formal relationship between the companies, there’s a personal relationship between the people.
And while you can transfer the trust of the company, you can’t transfer the trust of the person. And I think that that is the thing that I find to be difficult in the way that we have organized sales today is that if I have a good relationship with you and you say, “Okay, I’m going to introduce Sahil to this person,” you’re recommending me. But then, if I’m not the person on the phone and it’s somebody else, then it just feels like it brings a little hollow, you know, am I off based with that?
Joanne: There’s a couple of things. Yeah, I want to split this up into two pieces and maybe more, but you do have the relationship, so you need to broker the introduction. You need to be there maybe even in person and introduce the person, the AE who is going to be servicing the account. I actually had this when I was working with another company and I was leading the company and I met with my client and she said that -- she said I want to work with you and if you hand this off to someone else and I don’t know them, that won’t play with me.
Joanne: So I introduced the new account executive, I was there with him. They built a relationship, that’s the way it goes. So, that has to happen. But also in that case, a company should be structured, you know, and here’s the other thing. The AE who has Georgia Pacific and had them for a while knows the company, knows how the company works, know the inside and outs. So, they’re really even better equipped than you would be to deal with the company and -- but you should get a percent because this AE would not have had the business unless you broker the introduction.
So you know, you could make a play for having the account, that would be up to you, it depends how, you know, if the AE just was assigned that account and had no relationship, you could certainly, you know, make a case for why that account should be yours. But if the AE had been working with this account, maybe another division for a while and really was entrenched in the company, you know, then I think it really should be that AE, but you should get a percent.
Sahil: That totally seems fair, that totally seems fair. I feel like, I feel like, you know, when you describe the way to do it feels very -- it feels very simple and it feels like there’s common sense that can be used to do it. And yet, I see this fear of, you know, creating chaos, right, and not wanting to mock the water so much. But let’s talk about the side of this and you know, back to your website and a topic that I’m very passionate about which is cold calling and cold outreach and mass emailing. So Joanne, first, before I even offer anything, I’d love to hear about your perspective, what do you think of the rise of the SDR and the use of, you know, dialer software and mass email tools and hyper personalization, this and that you see in the world today?
Joanne: Well, there’s no such thing as personalization when it’s digital. I mean that’s my perspective, you know, you can choose content that might be the most relevant to them or whatever. But, you know, the fact is SDRs and BDRs are here. They have a role. People tell me they’re very successful and these companies that work with those teams to work with them on understanding the buyer so that they can -- they’re equipped to have a conservation. But I think what’s happened is that because of the SDR group that’s setting appointments to the AE, those AEs have the tendency to sit back and just wait, right.
And now, I see the pendulum swinging back a little bit because they’re saying, you know, This is really the job if I’m a salesperson. It’s my job to generate my own qualified lead. And yes, I’ll get some from marketing, I’ll get some from the SDRs, but I have relationships and I cannot advocate my responsibility to sell and the first part of selling is prospecting. So my job is to get those referral introductions through the relationships I have and there’s so many relationships everyone have. So that’s, you know, and the thing is most of the messages from SDRs are intrusive, they’re going to tell you something that happens just before we got on the phone.
So I’m working with a team -- training a team on the referral selling. And it was yesterday, we had our virtual session and I talked about -- I said, “I don’t know what’s happening, but every day there’s more and more, it must be 10, 20 a day I get of these emails, they’re just totally cold, have nothing to do with me. By the way, I didn’t attend your conference, I didn’t stop by your booth, I don’t want your software or whatever.” And now, twice I had people leave a message on my website, which was pitching their product. So, this person who’s in the class copied me on an email, I hope you BCC’d me on an email that he sent to this person who was trying to sell him some kind of software. And what the person in the class said, he said, “I don’t work from cold calls, cold emails, I only work through referrals, so your software has no use for me.”
And it was a status like that, I mean, he bothered to respond which I thought was very funny. But, you know, that’s it, you know, but it’s not their fault, somebody is making them do it. They have to make X number of dials a day, send X number of emails a day and something is going to fit, when it takes 8 to 15 touches that’s what they do day in and day out and that’s part of the reason sales get the bad name and that’s part of the reason there’s burnout because many times in companies, there’s not a career path, you know, and these are typically young people out of college and I think it’s a brutal introduction to sales and yet they do.
Sahil: Yeah, I do as well and, you know, I think that having built and ran multiple sales teams at venture back startups throughout the valley and having been a sales person myself, I would dare say that I didn’t understand just how intrusive and just how annoying it was until I left the world of sales. I had somewhat of a unique career and then, I started in sales and marketing and I ended up on the product side. And when I became a buyer, I all of a sudden realized that all of the tactics and all of the things, the tricks and the stuff that we would use are just so annoying. And I use the word annoying because I’m not annoyed by products, I’m annoyed by the people.
And that’s the part that was really eye-opening for me was that there would be -- I would get like this deluge of emails from vendors that I knew, companies and products that I had used, and I was left with a worst impression of the company than when I had no outreach or no contact before. And if that person had just bothered to reach out to somebody that I knew or had or the person I knew that the company had reached out or, you know, there had been that like that bridge of trust between me and that person, it would have mean all the difference in the world because it gives context and it gives some trust in the relationship.
I don’t think you can build a relationship with somebody by banging down their door. I mean, sure, occasionally it works. I’m not saying that it’s completely ineffective, I think it works. But I think that the amount of accounts that you burn and the number of relationships that you’ll never get by doing this is really hurting a company’s ability to maximize the revenue that they can generate.
Joanne: Yeah, I agree, I agree. But, you know, we’re not going to eradicate it. So, it is just the way it is and some people say they’re really good at it, I go, “Fine, if you’re good at it, it works, keep doing it, you know, really.” People have told me, “Oh, I’m really good at it.” Well, go ahead and be good at it. That’s fine. But some people they’re good at it but they still want to find a better way and they want to work through referrals because they see it as a better way. But, you know, I was at a conference a couple of weeks ago and the presenter outlined this whole presentation was about getting qualified leads in the pipeline and he talked -- he presented a process very specific of things people could do everyday that was geared to SDRs.
And so I asked him, I said, “Do you apply the same process to account executives?” And he said, “Yes.” Now, the account executives are going to follow that detailed process of X number of dial. So, people are thinking SDRs, SDRs, SDRs, and then, not thinking about the powers of relationships that account executives have.
Sahil: That’s exactly, right. And, you know, maybe I take a more cynical point of view on the role of the SDR than you do because I think you said, you know, we’re not going to eradicate it. I don’t know if that’s true. I would say that we as sales people have learned that whatever our buyer wants, whatever is going to get us customers is what we’re going to do. And what we realized is that somewhere along the way we realized that writing a personal email was far more likely to get you a meeting than sending a marketing email that we need.
And we realized that making a phone call was more likely to get you a meeting than just sending an email. That was something that we knew. And then, what we started doing was we started weaponizing those two mediums against our buyers and we started bombarding them with an arsenal of emails and calls. You know, I can’t even tell you how many -- are you still under -- are you stuck under a rock, did you get eaten by an alligator, did you, you know, some shitty line like that. You know, I get one a week still. To this day, I get one a week. I’m sure you do as well. And the thing that it makes me realize is that every sales person is willing to do whatever it is that they think is going to work.
So if buyers stop responding to cold outreach and if buyers stopped responding to cold calls and just -- and there is a way to just stop the success of that, then people will adapt and people will change. And I’m not saying that SDRs are a bad thing, in fact, I’ve managed SDRs, I’ve hired SDRs, you know, it is not that I have anything against SDRs. It’s that I don’t like the fact that buyers are being inundated with this type of, you know, faux personal messaging such to the point that if I get a warm intro to somebody and I don’t need -- and let’s say, you know, I asked you for an introduction to someone and you say, yes, okay, I’ll give you an intro to that person, I have to -- I have to rely on you to send that email because if I sent an email and said, “Hey, Joanne said you and I should chat,” that person is going to assume that I’m lying because every other outreach they get is something like that that’s like fake.
It’s only if you write the email that the person will even believe that there’s an intro because of all of the line that happens, “Oh, I was on your website and I saw this,” “Oh, I saw you --” and it’s just all fake, none of it’s real, you know. I can’t tell you how many emails I get that say, “I went to your careers page and I saw that you were hiring for this role.” I don’t have a careers page, right. So, I don’t think you did, right. And it’s just like -- it’s just so frustrating to me that we have made it acceptable to lie to the market to try and pretend that like we actually built a -- to try and simulate a relationship, you know what I mean?
Joanne: I do know what you mean. And speaking of referrals is when people offer referral, I always say, would you like me to write a little blurb for you. And typically, I’d say 95% of the time they say yes. The 5% of the time, a couple of times that they said I’m fine and they copied me on the intro, it was not what I would have said at all. So I decided I’d write the intro and when I write the intro, like I did, I sent one to you, Sahil. Then, you can put it in your words, you know, or bookend it, put an intro and a close, so whatever you want to do it but you got the core. And by the way that email was short and it describes the business reason to the introduction. It has to be a business reason.
So people who refer you -- let me back up, they will offer to help you because they like you, but they won’t introduce you just because you’re a nice person. They’ll introduce you because of the valid business reason and then, they look good as well, because you have to remember the person who’s making the introduction, their reputation is on the line. So they need to make a good introduction for a solid business reason. I never really thought about this fact that the buyers think we’re lying all the time. I can see that because why do I get all these emails that said, you know, you’ve been the worst, you’ve done this and that, that I’ve never done.
So, you know, that’s the possibility. But, you know, some of this is ancient history when I was selling an enterprise I didn’t have SDRs, so. And there’s this perception that you’re either, you know, a hunter or a farmer and some, you know, I managed a sales team a couple of times and one of the guys was definitely a farmer and I knew that. I needed to manage him differently. He had this wonderful relationship. He could call up his clients, go visit and they loved him, loved him. I mean he was a very tall cute guy, so the women really loved him. But I mean he just was charming.
So then from a management standpoint I needed to manage him differently, but, you know, we did all of that ourselves. We didn’t have SDRs. So why is it that we have to have this group of people today? I don’t know, you know, I really don’t. I think we just gone one from here all the way to this end and at some point, the pendulum is going to swing back.
Sahil: Of course, I totally agree. And again, like I said I understand why as a sales leader I would think that hiring an army of SDRs is going to be a smart business decision because I can afford, I can afford more of them. They can do all the grunt work that the account executive who I’m paying two to three to four times the salary of the SDR to doesn’t need to waste their time, you know, doing outreach. But I think again, you know, if we look at the efficacy rates of, you know, sending hundred emails, get three responses, that’s a win. That’s a good campaign. What about the other 97? And then, they’ll say, “Oh, they didn’t even read it, they didn’t look at it.” No, they saw it, right, because every email that comes through you see and you saw that you yet again got spammed by somebody that you didn’t want to talk to.
And now, I’ve got a negative perception of this company’s brand in my head and that does have long-term ramifications because I know the vendors that are overly aggressive and I know the vendors that are, you know, disrespectful of the buyers and the customers that they’re trying to interact with, and they also know the ones that are not. And the ones that are respectful in their outreach and that do really put in the effort to build a relationship and they had markedly differently results. I mean how many SDRs did Slack have when it was growing its business?
You know, there’s a reason why Slack didn’t have a ton of SDRs, it’s because they focused on product and they focused on customer success and they focused on building things that were widely beloved by teams and they figured out how to make a viral loop around it. And by the way, they do have a massive sales team now. But they already have built a brand as being customer first and I think that that is the thing that many startups miss is that they’re like, you know, it’s always been you built a great product and then, you market it. And today, we market the crap out of it and then, hopefully build a great product tomorrow, you know.
And I think that it’s just like everything about what we’re doing is very short-term focused which is why there’s so many flashing the pen type of startups that come in everyone thinks it’s going to be the next big thing. And then, it’s just not because they don’t focused on customer success, they don’t focus on long-term relationships, they don’t focus on on-boarding, they don’t focus on long-term results to their client, it’s just on to the next, on to the next, on to the next. And we celebrate short term revenue, we’re not thinking about long term return. I think that that’s like a very common thing that’s happening.
Joanne: Yeah, here’s another aspect to referrals, so what happens a lot is, so I’m an AE, I’ve gotten great relationships during my sales process and then those relationships are handed off to customer success. And then, I go on to the next thing. Well, I’ve missed this opportunity to continue to build relationships with these buyers to ask them for referrals. So the system is set up just really weird that it doesn’t support continuing those relationships with the EA who had been in the first place and whoever was on the team.
Sahil: Yeah, you’re right. I mean that’s another thing I found is that many companies set up like renewals are handled by a completely different team than the initial deal. And again, for the sake of like simplicity and vendor efficacy and whatnot, it makes total sense. But every time you pass the customer on to, you know, a customer success rap, all you’re doing is you’re weakening the ties between the company and the customer. And over time, that’s one of the reason why, you know, turn rates have gone up.
It’s, you know, every company is facing the same epidemic, they can’t retain their people, they can’t retain their customers, and this is just becoming more and more common. And I think that the thing that companies are doing in response to it is they’re hiring more people and they’re trying to get more customers. Instead of trying to, you know, it’s like filling a leaky bucket and it just doesn’t make sense to me why we don’t focus on long-term relationships and focus on -- I mean to this day, you know, many of the relationships I built a glass door and enough water and whatnot, I’m still friends with many of those customers.
And in fact, many of those people that I used to worked with are the people who are reaching out today six years, seven years later who are introducing me to their sales team so that we can spread Bravado. Like, you know, when speaking about the power of referrals, I mean, the reason that we built Bravado as a system based on reputation and referrals is because I have personally experienced the power of it and to understand that this is really important work.
And Joanne, you know, this is one of the things I’m so happy to have met you. How did we met by referral, right? Like I was talking to Todd McCormick, who’s the CRO at Terminus and he and I had gotten connected because I knew Sangram who’s the CMO of Terminus. And so I reached to Sangram, Sangram connected me Todd. Todd and I spoke and then, he was impressed of what we were doing, said, “Oh, you should talk to Joanne.” He introduced me to you. I mean this is how business is done. This is how every CEO raises venture money. This is how every great sales person cracks accounts and yet it’s just an afterthought in the majority of transactions in the majority of sales team and it’s a big mess. It’s a big, big mess I think.
Joanne: Well, in addition to being an afterthought, I’ve had a couple of people tell me in the last few months that wasn’t even on their radar. They never even thought of it, never even thought of it. But the reason that referrals work so well, the reason they’re so important is because they address these challenges that every sales leader says, okay. The biggest challenge is getting qualified pipe. All right, everybody says how do I get qualified leads into the pipe?
Joanne: Well, how do you do that, right? You get it with a referral introduction. How do I get my sales people to get meetings at the right level? You get that with a referral. You know, how do we shorten the sales process? You get that with the referral because prospecting time goes like that, it just collapses. And how do I get more clients faster? The conversion rate minimum 50% more likely higher, so all of that because it address the challenges that sales leaders and sales team face, otherwise maybe it wouldn’t matter. But that’s age old, that has been changed, except there’s more and more focused on qualified pipe.
Sahil: I love it. Now, last thing I want to touch on before we let you go because you’ve been so generous with your time here, Joanne, is perhaps the one thing that I hear over and over again, “I want to get more referrals but I’m worried about asking because it feels like I’m asking for a personal favor from my customer and so because of that I’m nervous to do it.” And it’s so interesting to me, this, you know, I want to share a quick anecdote. I’m doing a webinar tomorrow on referrals and the person who is hosting the webinar actually reached out to me, an old friend of mine, reached out to me because he himself was having trouble getting referrals.
He was nervous about getting referrals himself. And he is one of the most kind hearted, charismatic thoughtful sales people that I have ever worked with, sales leaders I have ever worked with and he himself was nervous about it and was like, you know, “I feel like I’m just like missing something here, you know, why don’t we talk about it and we’ll share our conversation.” And then, a friend of mine Kevin Walkup who’s the top sales person at Salesloft is joining as well who’s been a pioneer for referrals for a while.
But to get your perspective, I mean, this is something that you know so, so well and you’re one of the leading authorities on, how do I overcome that concern and in what mindset should I think about referrals when I’m thinking about it from the perspective of a customer? And if someone asked me for a referral, why would I say yes, you know, what does that mean, can we talk about that briefly?
Joanne: Well, a couple of things. So the fear of asking is huge and it’s behavior change. Remember, we said referral selling is a skill. So, when you learn the right way to ask which is a series of building blocks, being able to communicate the business results, who you want to meet and then, how to put that all together and how to ask, and then, you need to practice any skill. You have to practice to get good at it. It doesn’t just happen. And it’s a human factor, this fear of asking because it’s so, so personal and the fear is it feels pushy, it feels like a favor, what if they say no. I mean it’s all those personal stuff.
So we get over that when they build the skills, practice and shift their behavior, that’s how you’ll get past that. And so, it’s no longer, I’m asking for a favor, because you’re not. It’s no longer, “Oh, you know, we need to ask for help.” It’s no longer -- I’m afraid they’ll say no because they won’t, but it doesn’t just happen. And this is something that occurs a lot that sales leaders are saying I just told my people to get referrals, but it doesn’t work and they know it doesn’t work. Now, they’ve done that for years and it’s not working, right. So it is a specific skill that has to be learned and practice. It’s how we get good at anything.
And I love every two years when I can talk about the Olympics because you look at these superstar athletes, they didn’t get where they are today by doing a downhill or a slalom once. Oh my gosh, that was their life and their training and how many coaches they had, not one, not two, and all kinds of different coaches. And we do that even in our personal lives, but on professional lives you don’t think of it the same way. So that’s how you get overall of that. It doesn’t just happen.
Sahil: I love it. I love it, I love it, I love it, Joanne. I think the concept that you can one day wake up and just get referrals is as asinine as a concept that one day you can just take a random person off the street and they can be good at cold calling. You know, like it is a -- we have invested so much in training SDRs and in training people how to be more effective and outraged. And we’ve invested so little in how good our people could be getting referrals, well, even though we know that at it’s best cold outreach is not as effective, right, as getting referrals.
We all know every sales leader knows that getting a referral from one of your customers or from one of your partners or someone in your network is so much better than cold outreach. Every CEO knows, getting an intro to a VC is so much better than doing cold outreach. Every PR person knows that getting an intro to a journalist is so much better than getting cold outreach, right. We all know that this is the case in every aspect of the world and yet, here, we emphasize and preach and teach how to do cold outreach knowing it is a less effective medium than it is to get referrals. And I find that to be someone of an exercise of insanity.
Joanne: I’ll give you just to close out here. I had a conversation about this on LinkedIn. So, I posted an update.
Joanne: And the question I asked was why do sales leaders invest in technology so readily but they don’t invest in the professional development of their people? And there was a really robust conversation, but one person said this, “As a sales leader, invest in technology and the technology doesn’t work, they blame the technology. But if the sales leader invests in professional development for their team and it doesn’t work, they’re at fault. Now, I don’t know how accurate that is, but it is displaying more personal. So there’s a lot of reasons and, you know, you’ve nailed it. It’s a dilemma and we need to shift that because referrals like this our biggest competitive differentiation, we get in there, we’re having conversations, building relationships, closing deals while everybody else is spending 8 to 15 touches to try to reach people.
Sahil: That’s right. And again, you know, I couldn’t agree more, Joanne, you know, the thing that we have seen on Bravado is that the close rate for referrals. So this is, you know, using a less robust version of what you have developed, but, you know, we have a very simplified version of salespeople being able to get referrals. The close rate of referrals -- of a referral is over 25%. The meeting rate is over 85%. And the reason why I bring those numbers up is because there has never been any other program that I have ever run as a sales leader that had an 85% meeting rate and a 25% close rate. I know you get numbers that are even more effective than that. Joanne, if our viewers and listeners here want to get in touch with you in order to learn more about your program, No More Cold Calling and more and more about referral based selling and getting their team strength, what’s the best way for them to find you and reach out to you?
Joanne: I love to talk to people, so I’ll start with my phone number, which is area code 415-461-8763, it’s my office and that’s Pacific Time, 415-461-8763 and feel free to email me Joanne, J-O-A-N-N-E, @nomorecoldcalling.com. And you can also go to my website, nomorecoldcalling.com and get lots of information there. So, I welcome everybody to do that. I always share best practices and insight.
Sahil: Perfect. And you shared a ton today. Thank you so much. This has been a great conversation and I hope you have a wonderful rest of your day. Thank you for being a guest on the Future of Sales.
Joanne: You bet. Bye for now.