How important are referrals?

I'm pretty new to selling and I hear a lot about "Referrals."

Just how important are referrals really? I've checked around the office and everyone gets them but they don't live on them.

What's a good target to shoot for in terms of X percentage of business coming from referrals?

Originally Posted by Newbie What's a good target to shoot for in terms of X percentage of business coming from referrals?

Your question doesn't take into account a conversion factor for leads referred to leads closed.

With that said, what I think you're asking is how many referrals should you be targetting. For a new agent in the field a referral rate, Solicted and Non-Solicited, of 25% seems like a good target.

Our company wants us to work by referral as much as possible. In fact, much of our lead generation time is spent visiting current accounts and asking for leads.

IMO, referrals are the target a salesperson should be shooting for. Sure, in the beginning of your career you have to work the trenches but why do that for your entire career?

IMO, referrals are the target a salesperson should be shooting for. Sure, in the beginning of your career you have to work the trenches but why do that for your entire career?

I totally agree, good point SEOMyth.

A sales career can be pretty cold, hard, and long without referrals.

Thanks for the input everyone.

Originally Posted by Jeffrey Blackwell Check back later and I'll have some starter threads in the "Strategies and Tools" section of Networking that will address the topic of referrals.

I'll be watching for those. I recently read that you should ask for a referral from someone who doesn't buy. This never occurred to me because I figured if they didn't buy, they weren't sold on your product, but sometimes just because it is not a good fit for them, does not mean they don't have a friend who could benefit from it. I can't tell you the times I walked away from a presentation thinking.."well no sale, but very nice people." I could kick myself for not asking for referrals.

I think referrals are the lifes blood of any business, it is tough to go out each day are re-create the wheel. You must have someone that likes your product or service enough to recommend you to a friend or you will not be in business very long,
Bob Chapman

Originally Posted by RainMaker I recently read that you should ask for a referral from someone who doesn't buy.

You could even take it a step further and treat every one you meet as a potential prospect or a source to a potential prospect.