7 Dos and Don‘ts For Calling a New Referral Prospect in 2024
Referrals are the holy grail of sales leads. According to sales statistics, the close rate of referrals is 50% higher than other lead sources, and they have a 70% higher retention rate.
When someone your prospect trusts vouches for you, it transfers that trust to you as well. You‘re not just another stranger cold calling – you‘re a "friend of a friend." This gives you a huge head start in building rapport and credibility.
However, referred leads are a double-edged sword. Yes, you have an advantage – but that also means higher expectations. If you don‘t handle the call well, you‘ve wasted a valuable opportunity and possibly damaged your reputation with the referrer.
Don‘t blow your big chance! Here are the key dos and don‘ts to make the most of every referral call in 2024 and beyond:
The Don‘ts
1. Don‘t use a generic opener
When calling a referral, the LAST thing you want to sound like is a typical cold caller. Avoid cliché, impersonal greetings like:
- "How are you today?"
- "Is this a good time?"
- "I‘m just calling to…"
Instead, make your opening line specific to them and the reason for your call:
- "[Referrer name] suggested we talk about how [your company] might help with [key challenge]."
- "Congrats on [recent achievement]! I work with [referrer name] and thought it would be valuable for us to connect."
2. Don‘t make it all about you
This is the #1 mistake salespeople make. They launch right into their pitch about how great their product/service is. But the prospect doesn‘t care about you…yet.
With a referral, you may think you‘ve earned the right to pitch. Nope! You still need to make the conversation about THEM – their needs, challenges, and objectives. Ask questions and let them do 80% of the talking.
Some great questions to ask a referral prospect:
- "What are your main priorities/initiatives for this year?"
- "What‘s working well in your current process and where do you see room for improvement?"
- "[Referrer] mentioned you were looking into [topic]. What prompted that?"
3. Don‘t trash talk the competition
Maybe your referral source told you the prospect is unhappy with their current vendor. It‘s tempting to pile on and point out more flaws. But tread carefully here.
Badmouthing competitors can make you seem petty and untrustworthy. The prospect may even defend their current provider and become more entrenched.
Instead of bashing, ask diagnostic questions to understand their experience and see if they are open to change:
- "What has your experience been with [current vendor]? What do you like best about working with them?"
- "Every company has room for improvement. If you could change one thing about your current solution/process, what would it be?"
4. Don‘t overpromise
Referral prospects‘ expectations are already high. Don‘t inflate them further by making promises you can‘t keep just to get the sale.
Be upfront about what your solution can and can‘t do. Provide realistic timelines for implementation and results. It‘s better to underpromise and overdeliver.
If they have a need you can‘t meet, be honest about it. Perhaps you can even refer them to another provider. This builds trust and enhances your reputation (and chances for reciprocal referrals.)
5. Don‘t forget to ask for the business
It‘s a common mistake, especially with referrals. The call is going great, you‘re bonding, they‘re laughing at your jokes…and then you hang up without any clear next steps. Oops.
Never leave a referral call without asking for SOMETHING. Ideally you secure the next meeting or get agreement to a trial/proposal. But even if they aren‘t ready to commit, you can still ask for permission to follow up or send more information.
Example asks:
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"Based on what we‘ve discussed, it sounds like our solution could really help you with X. What‘s your availability next week for a demo with my technical expert?"
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"Typically the next step is an ROI analysis to quantify your potential savings. Are you open to that?"
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"I‘ll send over that case study we talked about. If you‘re interested, I can also connect you directly with that customer as a reference. Can I circle back next week to see if you‘d like me to facilitate an introduction?"
The key is to keep the momentum going and make it easy for them to take the next step with you.
The Dos
Now that we‘ve covered the major pitfalls, let‘s explore some proactive referral sales strategies for 2024:
1. Do your homework
You have an inside track with a referral – use it! Learn everything you can about the prospect before you reach out.
Some key things to research:
- Their role and responsibilities
- Their background (career history, education, hobbies/interests)
- Their company (size, locations, competitors, recent news/events)
- Common connections (school, previous employers, groups/associations)
Use this intel to personalize your approach and find common ground. The more context you have, the richer the conversation will be.
Tools like LinkedIn, Google News, and the prospect‘s company website make pre-call research fast and easy. 15 minutes is all you need.
2. Do name drop (strategically)
The whole point of a referral is to transfer trust. So be sure to name your referral source early and often!
Some natural ways to work it into the conversation:
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"[Referrer] and I were talking about the challenge of X in your industry. He thought you might be facing something similar at [prospect‘s company]."
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"I see you and [referrer] both went to [university]. I‘m an alum as well! Always great to connect with a fellow [mascot]."
Mentioning shared connections creates an instant bond. But a word of caution: don‘t overdo it or force it. Make sure the commonalities you reference are relevant and natural to bring up.
3. Do add value on every touch
Referral relationships are precious. Nurture them by being generous with your time, knowledge, and resources – even before they become a customer.
Some ways to add value on your first call and beyond:
- Share a relevant blog post, report, or book
- Offer to make an introduction to someone in your network
- Invite them to an upcoming webinar or event
- Give feedback on their website, content, or strategy
- Send them a small gift (company swag, gift card, etc.)
This "give first" approach shows you genuinely care. It builds trust and makes the prospect want to reciprocate.
For maximum impact, choose value-adds that are super relevant to them. Check their LinkedIn activity and company news for clues.
4. Do use social proof
A referral is already a form of social proof – but you can strengthen it further by mentioning similar customers who have gotten great results with your offering.
Some ways to weave in social proof:
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"[Referrer]‘s company saw a 50% reduction in downtime after implementing our solution. I think you could expect similar results."
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"We work with dozens of other fintech companies like yours. In fact, our solution helped [well-known company] save over $1M last year."
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"Happy to send you that case study on how we helped [company] achieve [result]. I can put you in touch directly with the CIO there if you‘d like to discuss their experience."
Knowing that others in their situation have succeeded with you reduces perceived risk. These real-life examples are more compelling than any marketing copy.
5. Do clarify next steps
Your referral call should end with a clear understanding of what will happen next. Never leave it vague!
Some examples of good call outcomes:
- Schedule a follow up meeting with a specific date/time (ideally within the next week)
- Get agreement on a trial or demo
- Secure permission to send a proposal for their review
- Identify other decision makers to loop in on next steps
Send a calendar invite and meeting agenda immediately. Include a brief recap of the call in the notes.
Your goal is to keep the ball rolling. The longer you go without another touchpoint, the colder the lead becomes.
6. Do keep your referral source in the loop
Your referral call is the beginning of a beautiful relationship – with your new prospect AND with your referral source.
Keep that referral partner feeling great about sending you leads:
- Let them know how the initial call went (keep it high level – no need to divulge confidential details)
- Thank them again for thinking of you and making the valuable connection
- Look for ways to reciprocate with your own referrals or other value-adds
- Keep them posted on the outcome (when the prospect becomes a customer)
- Consider creating a formal referral incentive program to reward your top referrers
The more your referral partners know they are making a difference, the more referrals they will send your way. Make them look like a rockstar!
7. Do track your referral metrics
You can‘t improve what you don‘t measure. Keep a close eye on your referral program results:
- # of referral leads per month/quarter/year
- Referral lead to customer conversion rate
- Revenue generated from referral customers
- Referral customer retention rate
- Net Promoter Score (NPS) of referral customers
Share these metrics with leadership to show the ROI of your referral efforts. Use them to identify your most productive referral partners.
Tracking also helps you spot issues early. For example, if referral conversion rates start to slip, you know something is off in your referral process and can troubleshoot it.
Bringing it all together
Referral selling isn‘t about luck or having a "magic touch." It‘s a systematic process that requires intention, skill, and finesse.
Master these 7 dos and don‘ts and you‘ll be well on your way to referral sales success in 2024 and beyond:
- Don‘t use a generic opener – DO personalize to them and the referral
- Don‘t make it all about you – DO focus on their needs and objectives
- Don‘t trash talk competitors – DO ask diagnostic questions
- Don‘t overpromise – DO set realistic expectations
- Don‘t forget to ask for the business – DO secure clear next steps
- Do your homework – personalize your approach
- Do name drop (strategically) – transfer trust from the referrer
- Do add value on every touch – give first to earn the right to ask
- Do use social proof – share similar customer successes
- Do clarify next steps – keep the momentum going
- Do keep your referral source in the loop – make them look good
- Do track your referral metrics – measure and optimize
Above all, remember this: referral prospects don‘t want to be sold – they want to be helped.
Be a consultant, not a pusher. Ask great questions, listen deeply, and offer relevant guidance. Show them you‘re there to be a partner in their success, not just close a deal.
Do this well, and you won‘t just gain a customer – you‘ll create a champion who will gladly send more great referrals your way.