Moving from a referral-based business to a sales-based organization can be intimidating. But if your goal is to grow your business, it’s a step you’ll eventually need to take.
If you’ve grown your business entirely on referrals, you may not even have a clear picture of who you can best serve. Often businesses take shape through the people that are referred to them initially rather than out of any strategic plan. That’s ok in your first couple of years as you learn who your best customers really are, but not sustainable in the longer term.
When you can clearly identify the specific sector or sectors you serve best, right now, as well as the size and types of businesses within those sectors, you have a clear target for your sales and marketing activities. As you hone your messaging to attract those businesses, it will become easier and easier for them to find you, for people to refer to you, and most critically, for you to look for prospects.
It’s a good idea to have a list of specific businesses that you’d like to target. If you’re game for cold calling them, great! But since we’re talking about a less intimidating way to become a sales organization, this is how you take your first step.
You’re going to use your existing network to help you connect with your identified prospects.
Use LinkedIn to see if anyone you know is connected to the person you’ve identified in your target client business. Failing that, is anyone in your network connected to anyone within that business that could possibly help you learn more about the organization?
Asking for warm introductions to have get-to-know-you conversations is a proactive step towards becoming a sales organization without feeling like you’re ‘selling’.
What are you currently doing with any leads that come to you either via referrals or through your marketing activities? Are you following up effectively? Do you have a system for maintaining contact if no sale is made?
You’ll need to have a defined sales process that you can implement as you begin to transition to more proactive sales activities. There’s no sense in investing in additional sales activities if you can’t effectively manage what you’re generating now.
Even if you’ve relied entirely on referrals up until this point, you’ll no doubt have had some idea of how many clients you need to pay your bills and yourself. Now you’ll want to extend that as far as you’re comfortable doing – if you were to grow to the point you’d ideally like this year, what will your pipeline need to look like?
You’ll want to have a process for generating more and more of the right kind of referrals to start. Then you’ll want to consider how to add more non-referral prospects into your pipeline.
Keep in mind that as you add more non-referral prospects into the mix your conversion rate will drop. It’s typical in a sales-based organization to close around 30% of what is in your pipeline. If you’re currently converting 50% of your warm, referred leads and you begin to add some of those targeted get-to-know-you connections into your pipeline, don’t expect to continue closing business at 50%.
Now you’re really starting to get anxious, right? Keep in mind that even asking for two more introductions per month is a step towards a more sales than referral based strategy.
At some point you’ll need to hire sales help in order to grow your business and complete that transition from a referral based business to a sales based business.
If you’ve invested in marketing, you’ll need to ensure you have someone to follow up appropriately with the leads you generate. That could be someone you already have on your team that can acquire the appropriate skills.
Or, you might consider hiring a part time salesperson to help with prospecting and moving any new leads through the sales process.
Eventually you’ll reach the point where you’ll need a full time salesperson to manage all your sales activities. From there, depending on your ultimate goal, you might need to build a sales team. Congratulations! You’ve completed your transition from referral based business to sales based business.
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