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Quotable Podcast Episode #64: “Referral Selling: Your Under-Utilized Secret to Better Sales” with Joanne Black

Hosts: Kevin Micalizzi, Tim Clarke
Most people would agree that selling through referrals is one of the best ways to ensure better sales. Unfortunately, most reps don’t know how to get the most from each referral. Join Joanne Black, author of No More Referral Selling and Pick Up the Damn Phone: How People, Not Technology, Seal the Deal, as she shares the ins and outs of generating more referrals and sales.

A warm referral? It's either cold or it's hot because they know the business reason for having the conversation.”

Joanne Black | Author

Episode Transcript

Kevin Micalizzi: So, it seems to be common knowledge that selling through referrals is the best way to approach it, yet most people are not asking for those referrals.

Today we are going to be speaking with Joanne Black, the author of No More Cold Calling and her newer book, Pick Up the Damn Phone! How People, Not Technology, Seal the Deal.

So Joanne, welcome to the studio.

Joanne Black: Thank you, Kevin. My favorite topic.

Micalizzi:: Super excited to jump into it. I'm Kevin Micalizzi, executive producer of the Quotable podcast, and I am joined today by my co-host, Julie Bordato. Julie's a product marketing manager here at Salesforce. Julie, thanks for joining us.

Julie Bordato: Hi, Kevin. Hi, Joanne. Excited to be here.

Micalizzi:: Excellent. Let's jump in and talk a little bit more about how people should be asking for referrals, when they need to be doing it, and why we should even be having this conversation at this point.

So, Joanne, I would say Julie and I both feel like we are very familiar with you and your work at this point, but for those listeners who don't know who you are, could you give us a quick kind of intro to who Joanne is?

Black: I'm America's leading authority on referral selling.

Micalizzi:: Love it.

Black: And by the way, I don't usually brag, but my publisher gave me that moniker. I'm taking it.

Micalizzi:: I love it.

Bordato:: Go with that.

Micalizzi:: Excellent. So, Julie and I were chatting about this yesterday, trying to get ready for the interview, and we found it fascinating that so many people say you should always sell with referrals, but very few people beyond you — there really aren't that many people talking about how you do it, why you do it. Why is that?

Black: There's a lot of reasons, and just going back to why they are even important and the challenges they solve, so referral selling wouldn't mean a thing unless it solves certain challenges that sales leaders and salespeople have. And the main ones people have told me for well more than 10 years is we need to get meetings with our decision makers.

It's taking way too long, and we're not meeting the right people. The other big issue is we just don't have enough qualified leads in the pipeline; we have a lot of pipeline, but a ton of them aren't qualified.

Those are the two main ones, and then couple others: They say, "Well, the sales process is just way too long" and the competition we're losing or we're not differentiating. Because to the buyer, Kevin, we all look alike.

Micalizzi:: Right.

Black: So how are we different? So what referral selling solves are those challenges and even more. Now, to your question about why referrals aren't happening. There are many reasons. The first is that sales leaders don't understand that it is a strategy first.

Like anything worth doing.

Micalizzi:: Right.

Black: They need to put that stake in the ground and say, "Referral selling is going to be our number one outbound prospecting strategy." That's key. And then they need to measure referrals.

They need to build the skills of their people in referral selling. And they need to reinforce and coach those skills. Like anything.

Micalizzi:: Right.

Black: Whatever we want to get better at, we don't just wake up and suddenly we are transformed. So that is one reason they don't understand really what it takes.

I also think sometimes they say, "Well, you know, we are doing referrals, we get them now and again." But it is ad hoc.

Micalizzi:: Right.

Black: It's not a discipline, it is not systematic.

Micalizzi:: Yeah.

Black: It's not the way we work. It is not power sales process. There's another reason — that's my belief — is I think the KPIs are messed up.

Micalizzi:: Okay.

Black: If we're accountable for the number of calls we make and for the number of emails we send and our presence in social media, that is what we are going to do.

Micalizzi:: Right, what gets measured, gets done.

Bordato:: Mm-hmm.

Black: There you go. And so I think the KPIs are messed up. And the other thing I think is that salespeople want easy.

Micalizzi:: Right.

Black: Right? That "Okay, what is some technology I can use that, oh, in a nanosecond, I'll get what I want?"

Micalizzi:: Yeah.

Black: They're looking for the silver bullet.

Micalizzi:: Right.

Black: It's not there. We know it is not there. I ask the question of people, "How many clients do you actually need to attract in a year?" Most of my clients are companies that have field or outside salespeople.

Micalizzi:: Right.

Black: They're responsible for building relationships, for getting in and landing and expanding, and the way to do that is through a referral. You don't click a button.

Micalizzi:: Right.

Black: Because those deals we get are based on the relationships we have.

Micalizzi:: So there is a lot in that answer. I want to start unpacking it by talking about the KPIs. So are we saying, measure how many times you have asked for a referral, or how many people came in via referral? What would you recommend if I was your client and my sales team really wasn't strong on referral selling, what would you be telling me I should measure?

Black: Both activity metrics and results metrics, and part of the downfall is a lot of sales people are given a quota, so go get it.

Micalizzi:: Yep.

Black: Right? And we can't manage to results.

Micalizzi:: Right.

Black: We can manage to activities. And here are the referral activities we can measure. One is, how many people am I asking every week? It starts there, because if we don't ask, we don't get.

Micalizzi:: True.

Black: Right? You know, unless we are asking, and clients will say to me, "Well, what would you recommend the number of asks each week should be?" It is a minimum of one.

Bordato:: You've got to start somewhere.

Black: Because sometimes we can't wait until the end of the month and say, "Oh my gosh, I didn't ask for a referral." And, that's one. Who do I ask? How many people? How many referrals do I receive is the second. Third, how many referral meetings do I schedule. And then how many do I conduct.

And the reason I put schedule in there, is sometimes there is a gap.

Micalizzi:: Right.

Black: Between getting the introduction and the time when we are actually going to meet. And meet could be face-to-face, it could be on the phone, it could be via video. Those are key activity metrics. And then, to your point, you can take it from there and then it goes into sales force as an opportunity at some point. We are measuring that.

We can measure the time it takes to close. Has that shortened?

Micalizzi:: Right.

Black: We can measure the size of the deal. It depends on what the client wants. I'm a salesperson, I want it easy to measure. That is the only "easy" I agree with. I don't want complicated metrics, and the simplest was, one head of sales said to me, "Joanne, I have one metric. The opportunity in Salesforce, because I know when it is an opportunity in Salesforce, that prospect becomes a client at least 50% of the time."

Micalizzi:: Right.

Bordato:: Joanne, let's go back to the beginning of that process you just laid out. It begins with the "ask." Why is it, aside from the fact that certain companies might not have the processes in place, why is it that people are afraid to ask for that referral?

Black: I didn't realize about that fear when I first started my company 28 years ago, and then people said to me, "Joanne, this is all well and good, but I just feel weird asking." Okay, so what's behind weird?

Well the biggest fear is someone might say no. Right?

Micalizzi:: But you are selling. Of course, someone might say no.

Black: Yes. Because it is so personal.

Micalizzi:: Right.

Black: I mean we sit there and we type away and we send an email; we're working with all kinds of technology. We're not talking to people. But when we are asking for a referral, our reputation is on the line, and what happens if they won't refer us?

So that is a huge fear, and by the way, it doesn't matter if we are new to sales, if we are tenured. It makes no difference if it's men, or if it is women.

Micalizzi:: Interesting. Okay.

Black: It is a human factor. It is so very personal. In addition, people say to me, "It just feels pushy, Joanne. It feels arrogant. It feels in-your-face, and I am not that kind of salesperson."

And here is one that surfaced recently. "If I have to ask, it must mean my business isn't doing so well." Right, because after all, if I were truly successful, why would I have to ask? All of these get in the way. We get in the way.

Micalizzi:: That does not surprise me.

Bordato:: Yeah.

Micalizzi:: So, I want to go back. You talked about scheduling the ask. And it makes me think about technology and the fact that I get a large number of LinkedIn requests, and some pretty detailed asks from folks who I don't know, I've never worked with, and, you know, we may have on some level a very tangential relationship — we both belong to the same group or something along those lines.

So, first, why are you talking about scheduling an ask versus let's say someone sends an email? And then, the flip side of it is, are there technologies, or is there a way technology is helping this? Or is it just, you know, technology is creating an easy out where you've suddenly made it impersonal, because you are sending an email and you are not having a live conversation about it, where somebody could say no to your face?

Black: How much time do you have for me to answer that question?

Micalizzi:: We'll go for the Cliffs Notes version.

Black: Okay, Cliffs Notes. So my point of view is you should never, ever, ever, underlined 56 times, ask for a referral in any digital format.

Micalizzi:: Okay.

Black: As we said, referrals are very personal, and in sales I have missed an opportunity to actually talk to the person who I want a referral from. And you mentioned LinkedIn. I don't know, if I see you’re connected to someone on LinkedIn that I would like to meet, I have no clue if you know this person.

Micalizzi:: Right?

Black: Right?

Bordato:: Mm-hmm.

Black: I don't know your relationship with this person. I need to actually talk to you to find out if you know the person. If you do, "Tell me about that person. Why do you think that I can solve some of their challenges?" And then I want to ask how I can help you.

I mean, this is sales. We need to have conversations, and people have told me when they've gotten those kinds of requests, Kevin, on LinkedIn, they're pissed off.

They are really annoyed.

Micalizzi:: Right.

Black: Because the other person is assuming that I would refer them.

Micalizzi:: Right.

Black: Why?

Micalizzi:: I want to touch on one thing there, because I think in my mind of mixing the two up. When we talk about referrals, are we talking about a warm introduction or are we talking about an endorsement?

Black: Mm, very different.

Bordato:: That's a big distinction.

Black: There is a distinction between a referral, and endorsement and a reference.

Micalizzi:: Yeah. Okay.

Black: A referral means you receive an introduction.

Micalizzi:: Okay.

Black: That's my definition of a referral. I'm sticking to it. Because people will say to me, like you said, Kevin, a warm referral. There is nothing warm about it. It's either cold — they don't know you and don't expect to hear from you — or it is hot.

Micalizzi:: Right.

Black: You've gotten the introduction. They know you. They know the business reason for having a conversation, and they are going to talk to you. So when you get the introduction, you actually get a meeting in one call. Micalizzi: Right.

Black: Think about it. Now the introduction can be made on email, that is the most frequent now, and then it becomes really simple to follow up.

Micalizzi:: Right.

Black: Because you schedule let's talk.

Micalizzi:: But you're not asking for that referral in an email.

Black: Never.

Micalizzi:: Okay.

Black: That's right. Sales is built on relationships. I want to have a conversation with you. Each of us is different every day. Other things are going on. I might have talked to you last month, and things are different for you now. Micalizzi: Right.

Black: I want to hear how can I help you? I want to make sure you understand the business reason, the challenges — if they have those challenges — that they are facing, that referrals address.

Micalizzi:: Okay.

Bordato:: Joanne, is there ever a good time for a cold call, or do you think that they should just be completely banned from existence?

Black: Well, I do believe that they should be banned from existence, but I know that is not going to happen. I'm pragmatic. Cold calling is still going to happen, especially in some of the entry roles. But when we are talking about account executives, account-based sellers, those of us who have named accounts, we're not going to get meetings with cold calling. Also, we get so much spam. I mean, how many emails do I get a day that say, "Oh, did you see the email that I sent last week?" I get three or four of those and then the phone rings. I don't answer my phone, I can see who is calling. No one likes to receive cold calls, but here's why they work for a lot of people.

They don't have any skin in the game.

Micalizzi:: Right.

Black: I'm just dialing for dollars and if I talk to someone, great, and if I don't, that's fine, too.

Micalizzi:: So it becomes a numbers game.

Black: It is. Well, sales is a numbers game. It's the same with referrals, but it's not about making a hundred dials a day.

Micalizzi:: Right, so Joanne, before we got into the studio, you and I were sitting down and talking about how in some groups, SDRs are calling out to folks and really not — how do I say it delicately — not prepared. They don't really understand who they're calling and maybe even why.

And it's got me thinking. When we're talking about cold calling, or talking about referral selling, and back to the whole numbers game, there's so much pressure on our sales reps to constantly grow the business and to constantly do more, do it faster.

And some technology enables and supports that, but not necessarily in the referral-selling, relationship-building side of things. So, what are you seeing and how do you recommend combating it? Because I don't expect the targets, the numbers that these folks and these teams have to meet, to change, but should we be doing something different?

Black: I don't know if we can do anything differently.

Micalizzi:: Okay.

Black: Those are entry-level roles. There is one minor adjustment. People make the assumption that just because people are new, and typically young, in those roles, that they don't know anyone.

Micalizzi:: Right.

Black: That they don't have clients, right?

Bordato:: Mm-hmm.

Black: And they can't ask for referrals. You always have time in a day to talk to one person. Think about it. If an SDR or BDR talked to one person a day, that they knew, and clearly described who they were looking for and got an introduction, think about the power of that.

Micalizzi:: Right.

Black: But there is something else going on here. My perspective is that these positions are defining sales for this group of people.

Micalizzi:: Okay.

Black: And they feel they have to cold call, and the turn is huge. And then they get a bad impression of our sales profession.

Micalizzi:: Okay.

Black: I think it is a very rude entry into the profession.

Micalizzi:: Okay.

Black: I didn't have that.

Micalizzi:: Right.

Black: Thankfully. But I do joke about the fact that several years ago when salespeople started, they said to me, "Well we were given a desk and a phone and a phone book." And now they say, "We're given a desk and a phone and password. Figure it out."

Micalizzi:: Right.

Black: That is not how to get excitement for selling.

Micalizzi:: Okay.

Black: That's a bigger topic. I don't have an answer to that, but that is my perspective on it.

Micalizzi:: Okay.

Bordato:: So, what is the right way to go about asking for a referral? When is the right time? What are the right words? How should people be asking to start this whole thing off?

Black: Timing. People ask me about that a lot. If we just take our current clients or recent-past clients, when I ask people, "Have you asked every single one of your clients for a referral?" — that's everybody that you've interacted with during your sales process — you can guess what the answer to that is. No.

Micalizzi:: Right.

Black: We are leaving money on the table. And part of the problem there is because the way many SaaS companies are organized: that I close a deal, I hand it off to account management — customer success, whatever I want to call people — and then I go onto the next. I've left money on the table because I haven't asked for referrals from my clients.

You know, sometimes they come in — it's really nice, Julie, when that happens — but sales people don't sit back and wait, at least the successful ones don't. It's my job as a salesperson to generate my own qualified leads, and I do that through a referral. So current clients are one.

Now, when people are new they say, "Well, I don't have any clients." That's fine, but if you were in another job someplace, you have relationships, you know people in the companies you used to work with. You have neighbors, you have friends, you have colleagues, you have running partners, you have alumni groups.

Just fill in all of these people you know, but here's what happens, especially when we have a sophisticated, complex solution: We immediately think, "Oh, they won't know anybody."

Micalizzi:: Mm-hmm.

Black: Right? In fact, one of my clients lived in Rhode Island and she said to me, "Well, Inez is my next-door neighbor, but she is a grandmother. I mean, her grandchildren come over and she bakes cookies and all of that."

And I said, well, what harm do you have in asking? "No." So she went and asked and told the grandmother exactly the person she had to meet. Grandmother put her arm on my client's arm and said, "Honey, you need to meet my son."

But see we have preconceptions about people, right, so we don't know who people know. And the fear of asking gets right there and then this is how people typically ask: "If you know anyone who could benefit from my services, please let them know." Well, what does that accomplish? Nothing.

Micalizzi:: Right.

Bordato:: It puts the burden on the other person to think through who fits that.

Black: Yes.

Micalizzi:: And to take action.

Bordato:: Yeah, absolutely.

Black: And we've checked it off our list and said, "Wait. Wait a minute. I asked." That's not asking.

Bordato:: Mm. Okay.

Black: Asking is specific. We need to be very clear about the person we want to meet, because when we ask for a referral, we should be asking for exactly what we want. We get what we ask for.

Micalizzi:: Right.

Black: So, in my case, my clients are sales leaders, they are CROs, they are CSOs, they are leading sales teams. Those are the people I need, and I say to each one, "Would we be meeting if I hadn't been introduced?" Well, they get the point, right there.

Micalizzi:: Right.

Black: Very, very specific about who we want to meet, and then the business reason for meeting.

Bordato:: Is the reason why referral selling is so effective because it's not being used broadly at this point? Is it ever within the realm of possibility that this would become such a widely used tactic that it would stop being as effective and people would feel bombarded by asks?

Black: Absolutely not. When you think about referrals, that's the way everybody always used to do business. "Let me let you talk to this person, I need to introduce you there," that's the way business was done. Currently, and I think it will be this way for a long time,referral selling is our biggest competitive differentiation.

Because while everyone else is typing away, we're out there getting meetings, and we need to get in, have those conversations, before there really is ever a need because we are building relationships and we are in there strong. Competition doesn't have a chance.

Micalizzi:: I love when you and I first spoke about this, I called it common sense, because everybody knows that you should be selling through referrals. I loved your expression, because you said, "Common knowledge, not common practice."

So, what I would love to do, just to make sure we give our listeners some concrete takeaways: We have talked about how you need to ask for the referral, you should be doing it in a meeting, not over email, not over text, and you've talked about how you need to be articulating very specifically who it is you need that kind of an introduction to, and the business reason for it.

What else should our listeners, as soon as they finish listening to this podcast and finish their run, finish whatever it is that they're doing during the podcast, what is it they need to do right away, to really change their selling?

Black: They need to build a list of the people they know, starting with their clients and others, and the list is organized by the power of the relationship.

Micalizzi:: Right.

Black: You know, many times we think, "Oh, I have to ask this person for a referral, because they have a huge network. I know they will know the people I need to meet." No.

Micalizzi:: Mm-hmm.

Black: We always go where the relationship is. Because we don't know who people know. Make that list and you need to write it down, because unless you write it down, it is not going to happen.

Micalizzi:: Right. We have had a couple conversations recently around differences in generational approaches to how we use technology, how we sell, how we buy, and I've noticed — and I wouldn't even say it is necessarily a generational thing — but there are some folks who really dislike getting on a phone call, getting on a video call.

And they spend most of their time communicating by a text or email. And text, I think — email is very much a passive medium, asynchronous — whereas text could be real time as well. I'm curious, what have you seen and what do you recommend if I'm dealing with someone — and it could be a millennial, it could be Gen X, could be baby boomer who loves to text and really hates getting on the telephone.

And maybe logistically I can't get an in-person meeting with them, because they are on the other coast, or something like that. How do you tackle those kind of scenarios?

Black: First we need to communicate like our clients communicate or our friends communicate. And if they communicate by texting, that's fine. But, I still have to have a conversation with them to describe who I am looking for and to prep them for introducing me the right way.

The reason a lot of people don't like the phone is they think they have to cold call, or they have not been taught how to have a conversation. When we're asking people for a referral, we know these people.

Micalizzi:: Right.

Black: So there should be no problem at all. It can't always be face-to-face, obviously, but we have technology now that facilitates that. We can get on video, we've got the phone, we've got webinars, we've got so many things we can do, and a lot of people don't like to be on video, either.

Micalizzi:: Right.

Black: We need to communicate like people communicate.

Micalizzi:: Right.

Black: However, we always need to have a conversation when we are asking for an introduction.

Micalizzi:: Okay. Which makes sense.

Black: It may or may not make sense, but it is my point of view, because people do business with people, not with technology. I had one client say to her team, she was a VP of sales, and she said, "We don't close deals by email."

Micalizzi:: Interesting. So, do you want to end with our lightning round question, which is if you could take all of your knowledge and experience that you have now, go back to the beginning of your sales career, and give yourself one piece of advice, what would you tell yourself?

Black: Don't believe conventional wisdom.

Micalizzi:: Okay.

Black: My first job out of college, I worked in a retail environment, and I asked some of the women there. I wanted to redo a display and I told them, and they said, "Well, that's never been done before." I went and asked my manager, and by the way I was 22 years old at the time, and I told her the situation, and I said, "They said it's never been done before."

She didn't miss a beat. She said, "That's the best reason I know for doing it."

Bordato:: I like that.

Micalizzi:: Fantastic.

Black: That's been my mantra.

Micalizzi:: Love it.

Bordato:: That's great.

Micalizzi:: Awesome. Joanne, thank you so much for coming in and chatting with us today.

Bordato:: Thank you.

Black: Thank you.

Micalizzi:: And, Julie, thanks for jumping in.

Bordato:: Thank you for having me.

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