Forget Cold Calling; Referral Selling is the Best Sales Strategy

June 18, 2012 | By | Reply More

Cold calling, the process of contacting someone who do not know you or expecting your call, is a waste of time, according to the book “No More Cold Calling(TM): The Breakthrough System That Will Leave Your Competition in the Dust” by Joanne S. Black. The industry standard response rate for cold calling is a mere 2 percent.

referral selling

Ms. Black writes, “I don’t believe anyone should have to cold call – ever.” The author’s research shows that 98 percent of salespeople dislike cold calling. Yet this is a practice commonly employed by companies big and small. Businesses find it a good way to get qualified leads, or even sales. Many do it out of habit because it’s been done over and over again. Others do it because they don’t know of a better or more effective way to sell. Still some sales professionals do it because their boss expects them to do it.

However, Ms. Black contends that the “public is averse to cold callers, and their displeasure will continue to increase.” People hate unsolicited emails (which are what most of the cold call emails are). Companies employ gatekeepers and sentries acting as barriers to cold callers. Most of all, cold calling is the “least effective way” of landing a big customer. You can do other techniques that can give you “five times as many clients by doing a fraction of the work.”

Referral Selling: the Sales Technique Superior to Cold Calling

According to the author, referral selling is HOT!

Referral selling is the process where “you are introduced to people you want to meet and who want to meet you.” If you are referred to a potential customer, you are viewed as credible the moment the customer talks to you on the phone or walks into your door. You don’t have to do prep work in selling because the customer is already sold on you. And you won’t have to filter out a potential customer to find out whether this person is a qualified customer because this person is already your ideal customer.

Referral selling is “the only way to build the kind of relationships that create loyal customers who are then thrilled to refer others to you.” The author contends that it is the best method of selling because of the following reasons:

1. Success Rate. Your success rate of converting prospects to clients will increase from about 50 to 90 percent of the time. As a result, you spend less time selling yet get better results – time that you can dedicate to building your business or getting even more clients.

2. Building Customer Relationships. Increased business with existing customers, who will become loyal referral sources for you. Referral selling already begins with trust; whereas you have to work hard to earn the trust of a sale you got through cold calling. Follow-on business from a sale resulting from referral selling is 2-to-3 times that of a sale created by cold calling.

3. Your Customer is Pre-Sold. The sales process is cut short because customers will already know who you are and will want to work with you. Your revenue can increase dramatically because you or your sales people will spend less time on unproductive business development activities and focus on more lucrative avenues.

4. Reducing the Competition. The competition either diminishes or becomes non-existent because you will not set the standard against which the others must compete.

With referral selling, it will seem that you have your own private sales force out there working for you – without you paying them!

How to Ask Someone to Refer You

According to the author, you need to think about how you will ask your referral source for a referral, then write your script, and practice it. She outlines the following process:

  1. Tell your friend or colleague about your business
  2. Set the stage by reciting past successes or tell and interesting story that will convince them about your business
  3. Describe your Ideal Customer so they know who may be the right person for you
  4. Ask for one or two contacts, and remember to ask for an introduction

The last part is often the hardest. Sometimes, you’d feel awkward asking for referrals. The author gives the following suggestions on how you may be able to ask with confidence (she advises to stick with the one that you are most comfortable with):

  • “It would mean the world to me if you could introduce me to one or two people you know.”
  • “It would be terrific if you could put me in touch with one or two people you know.”
  • “I’d really appreciate it if you could introduce me to one or two movers and shakers.”
  • “It’s your relationship, and I know you’ll want to make the call to introduce me.”
  • “It really works best if the person making the referral makes the introduction.”
  • “An introduction from you would be terrific. If I just get a name, it’s like a cold call (and you know I don’t make cold calls).”

The book “No More Cold Calling” is not the first book that claims that referral selling is superior to other sales technique, but it is one that made the best argument for the futility of cold calling. It is a very interesting read, with lots of detail on how your organization can shift from a sales culture geared towards cold calling towards the more effective referral selling. If you are looking for ways other than cold calling to get customers, this is one book that you should not miss.


Lyve Alexis Pleshette

Lyve Alexis Pleshette is a writer for She writes on various topics pertaining home businesses, from startup to managing a home-based business. For a step-by-step guide to starting a business, order the downloadable ebook “Checklist for Starting a Small Business” from

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