Which Prospecting Channels Have The Best Conversion to Sales?
When it comes to prospecting, if we’re going to be successful, it’s important to get clarity around the dynamics of each selling channel. We need to understand the conversion rate to opportunities for each channel as well as the actual time it takes to complete each activity.
Today, as sales professionals, we have considerably more channels that we can leverage than in years past. If we’re going to be successful, it is important that we invest our time leveraging the highest payoff channels. If we don’t invest a little thought into which channels are the highest return for our type of customer, we may unintentionally invest a ton of time in low or no payoff channels.
Despite both seen and unseen challenges, the latest data shows that there is a clear path to navigating these obstacles that brings the greatest success.
What sales professionals are often surprised to discover is that they are not focusing on the highest leverage points in their prospecting efforts and that by making relatively minor adjustments to their prospecting efforts – by making it more tactical – they can increase their effectiveness many times over.
Which Sales Channels Convert The Best?
Which sales channels convert to opportunities the best? This is a key question for success and there is no one-right-answer for all industries and solutions. Having said that, there are indeed some general guidelines that can be applied across all sales.
So you don’t have to guess what the conversion to opportunities is for each channel, I slaved to uncover these metrics for you. You’ll find the details of these ranges in my upcoming book: Tactical Sales Prospecting.
Here is a summary of the channels most relevant to us in sales and what their conversion rate to opportunities is represented as a range.
Now, we don’t have the space in this short article to discuss every one of these channels, but tell me, what do you notice about these metrics?
Does anything jump out at you?
Holy Smokes! Referrals as a channel completely slaughters every other channel by country mile!
Referrals Are The Highest Leverage Channel
Why do you suppose it is that referrals perform so much better than every other channel?
In a word, it’s trust.
When we get referrals we are borrowing and leveraging the trusted relationship that two individuals have in each other. And it’s the most effective lead generation strategy there is.
Here’s some data for you:
In the Engagement Department
- Peers influence 90% of all buying decisions.
- 84% of decision-makers begin their process with a referral.
- B2B buyers are 500% more likely to engage with a referral.
- Appointments are 420% more likely with a personal connection.
In the Conversion Department
- Referrals convert to sales 300 to 500% higher than any other channel.
In the Value Department
- Referred customers spend 13.2% more than non-referred customers.
- Referred customers have 16 to 25% higher lifetime value than non-referred customers.
- Salespeople who actively seek referrals earn 400 to 500% more than those who don’t.
Pay close attention to that last metric. They don’t earn 25% more, or 50% more. It’s 400-500% more.
And believe me, I’m a data guy. I could go on forever with amazing statistics about how effective referrals are.
My Own Personal Data With Referrals
Let me share some of my own personal data with referrals. I’ve worked for large corporations most of my career. And I can tell you that while it’s getting better, in the corporate environment, sales and marketing don’t always see eye to eye.
Sales thinks the leads they get are garbage while marketing things they’re sending you pure gold, right? Sound familiar?
As a sales VP I once got caught in the middle of one of these debates about the quality of the leads and where they were actually coming from. So for my region’s leads, I hired someone to audit every single lead that came in for a period of time. It was almost a thousand leads. This person contacted every single one and uncovered how and why they became engaged.
This will blow your mind.
Marketing was saying things like: X% of leads are coming from the website, and Y% are coming from SEO and so forth.
What my person asked that turned out to be very significant was: “What made you go to [X – the channel they came in on] in the first place?”
So if they went to the website, she’d ask – “What made you visit the website to begin with?” Or if they searched for something on Google she’d ask, “What made you want to search on Google in the first place?”
“What made you go to our website in the first place?”
The Shocking Data We Discovered
Here’s what we found. Regardless of the lead source, 74% could be traced back to a referral source.
To clarify, this means that a personal connection turned them on to us in 74% of cases. Their personal connection would say “Oh, you should check out these guys.” Boom! Next thing you know they’re on the website.
Now there’s a word for this in the marketing world. It’s called “Attribution“. That is, how do we accurately attribute where the lead actually originated? And we’ll let them continue to debate that. We just care about getting something done right?
So what I’m trying to tell you is that referrals are even more important than you might have thought.
From my perspective somewhere around 74% of all leads come from referrals. That’s huge.
And by the way, I’m not the only one who’s come up with numbers like that. Both the New York Times and BNI have come up with very similar numbers. So here’s the takeaway…
Key Point – Referrals are hands-down the highest leverage, most under-utilized channel in sales today.
There’s nothing else even remotely close. If you did nothing else than utilize this one strategy you’d be successful.
Why Don’t We Leverage Referrals?
So the question is, why don’t we leverage referrals? By far the top answer I hear is that people just forget. They have no process or system so it just doesn’t happen. This is an important issue and the key is to implement a system and process for asking for referrals.
So let me ask you a couple of questions:
- Do you have a systematic referral process? Ideally one that includes a written strategy and uses metrics.
- Have you trained or learned referral skills and incorporated accountability into that?
Key Point – If you want to successfully leverage referrals then the key is to implement a systematic process.
We don’t have space in this article to delve into the details of how to do that right now but this is an important action item for your list. So write that down. By the way, I highly recommend Joanne Black if you need help with this. She’s a phenomenal resource you can engage to accomplish this.
Other Reasons We Don’t Leverage Referrals
Here are some of the other reasons I hear when I ask why referrals aren’t being leveraged:
Lack Confidence – All I’m going to say, is get sold on your solution. Selling is serving. When you help someone invest in something you’re improving their lives. We should be enthusiastic to help everyone we can.
Asking in the wrong way & fear of rejection – The solution here is to learn the most successful way to ask for referrals, and in a way that wont cause you to get rejected. I’m going to show you that in just a second.
They feel they haven’t earned it yet – Here’s the thing. You should definitely work towards earning referrals. But the fact is, you don’t have to wait until you’ve “earned it” to ask for referrals. In fact, in my experience the best time to ask for referrals is right after you’ve made the sale. Customers are at an emotional high point and timing is perfect. And, it fills your pipeline a whole lot faster. Do earn it. But ask now. You don’t have to wait.
They feel that great service alone is enough to generate referrals – The short answer is – it isn’t. It wont’ happen by itself. You have to ask. Here’s what the data says:
- Approximately 20% of customers will refer you no matter what.
- Another 20% won’t refer you regardless of what you do.
- And 60% of customers are willing to refer you – but you have to ask.
How to Ask For Referrals
I want you to finish this article knowing the most successful way to get referrals. So here it is.
The biggest problem with referrals is that reps don’t know how to ask. And since they don’t know how to ask, they just don’t ask at all. And sometimes, if they do manage to ask, they ask in the wrong way so they fail.
Plenty has been written about how to ask for referrals and most of the guidance boils down to asking something like: “Who else do you know that would be a good match for our solution.” In other words – “Who else do you know that could buy my stuff?”
With my own teams I have tried and failed at many different ways of asking for referrals. And I can tell you, asking anything like “Who else do you know…” produces little to no results. The problem is, what you’re asking them to do is too much work. Asking a person to think of everyone they know that meets a given criteria is hard. Try it some time.
Here’s what does work. And what made a huge difference for me and my teams:
Instead of asking your client to pull a list of names out of the ether, go and find out in advance who would be a good candidate for you that they already know using LinkedIn or society rosters. So before you have your conversation, you already know the exact person you want the introduction to.
Then, instead of asking “Who else do you know…” you say, “Hey Joanne, I’m trying to get in touch with Deb Calvert over at People First Productivity Solutions. Do you happen to know her?”
Of course, I know she already knows Deb because I saw it on LinkedIn.
Now, your customer is not dumb. They can tell where you’re headed so if they’re not comfortable making an introduction they just play like they don’t know them well. So you can’t get rejected.
But what happens in most cases is they say, “Yes, I know Deb. We’ve known each other for years.” And then you just ask if they’d be willing to make an introduction.
Oh, and use the word “introduction” not “referral” because that’s what you’re asking for – an introduction.
This approach turned out to be massively more effective than any other method we tried. And of course, now you get all the benefits of having a built-in reference to help you with your new opportunity. There is certainly a little more nuance to managing the whole process, but this is the most important part. Research the exact name you want an introduction to before you meet.
I also advise you to ask for only one name at a time. This is not the time to be efficient. You can always come back and ask for the next name. And then keep them informed on your progress. That’s it in a nutshell.
We covered a lot of ground on this post. The key takeaways are these:
- To be successful, it is important to invest our time in the highest payoff channels.
- While every business is unique, there are guidelines regarding channels that can be applied across all businesses.
- While all channels are important, referrals are hands-down the highest leverage, most under-utilized channel in sales today.
- If you want to successfully leverage referrals then the key is to implement a systematic process.
- Additionally, the way you ask for referrals matters. Asking in the right way dramatically improves success and eliminates the possibility of rejection.
Prospecting Secret: To be successful, it is important to invest our time leveraging the highest payoff channels. Understand your own customers and the highest leverage channels for engaging them.
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Until next time!
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