Which marketing or sales tactic do you think has the highest ROI? Inbound marketing? Email campaigns? PPC ads?

The truth is this: there’s a standout winner that can’t be touched by any other method. That winner is referrals. Referral sales require almost no financial investment, but they bring in very valuable warm leads.

Unfortunately, most salespeople go about getting referrals all wrong. If you can improve the way your sales team asks for referrals, you’ll get big results without spending money on marketing or advertising.Unfortunately, most don’t know the right way to go about getting those valuable referrals.

Where Most Salespeople Go Wrong

Very few salespeople know how to ask for referrals. In my experience, they go about it in one of two ways. First, they ask late. They wait until the customer relationship has been established for a while, and then they send out an email or bring it up on a call.

But there’s a big problem with this: if you wait too long, the customer is no longer excited about the product. Even if they use it all the time, it’s not new anymore. That’s good for your business — you’ve become a regular part of their workflow — but not good for referrals.

You need to get to people while they’re excited about finding your company.

The second mistake that salespeople make is that they take “no” for an answer. Here’s how that conversation usually goes:

“Do you know anyone else who might be able to use our services? Anyone you work with, or anyone else in your industry, maybe?”

“Hm . . . I’ll have to think about that and get back to you.”

“Okay, sounds good! Looking forward to it.”

And that’s the last you’ll hear of it. When you combine these two mistakes, you decimate your chances of getting a referral.

So how do you actually get more referrals?

There are 4 important steps:

1. Ask for referrals right away.

Let’s address the first problem: asking after the customer has been using the product or service for a while. There’s a simple solution. Ask right after you make the sale. This is going to feel weird at first. But trust me — it works.

Right after the sale is when your customer is most excited about your product. They just decided that whatever you’re selling is worth their money. They’re completely convinced that what you do is valuable. And that’s the perfect time to ask for a referral.

It might sound something like this:

“Are you excited to start using our product?”

“Yes, absolutely.”

“Perfect! Who else do you know that would benefit from using it?”

This is more direct than you’re probably used to. But in my years of sales, I’ve found it to be the best way to approach the topic. Of course, whenever you ask for a referral, there’s a good chance that your customer won’t give you anything useful. Here’s what to do about that:

2. Ask twice.

“Perfect! Who else do you know that would benefit from using it?”

“No one.”

It’s a salesperson’s worst nightmare. It’s awkward and you don’t get a referral. There are two things you need to do in this situation. First, get over it. People are going to say “no” or “let me think about it” a lot. That’s just what happens. And that’s fine. They’ve already made the purchase, so you’ve succeeded. The referral is just the icing on the cake.

Second, ask again. You’ll feel weird about this, too. But in my experience, 2 out of every 5 people you ask twice will give you a referral. That adds up. It’s absolutely worth doing.

You might be wondering how you do this without sounding pushy. Here’s an example of what I’d say if a customer said they’d get back to me about a referral:

“I appreciate you giving it some thought! I’m sure you’ll have lots of recommendations for us in the future. But let’s just take one minute today to think of a friend that’s in a similar situation and could benefit from our product.”

It’s that simple.

Sometimes people will tell you “no” again. They might even be a little irritated. That’s okay. It happens. But a surprising number of people will give you a referral on the spot. When they do, thank them and tell them that you want to make things easy. That’s our next step.

3. Include an email referral template.

Making a referral as easy as possible is just good business. Your customers are doing you a favor, so it’s important to help where you can. One of the best ways you can do this is with an email referral template. It might look something like this:

Hey Laura!

I wanted to connect you with Steli — his company, Close, built a sales CRM that uses email automation and predictive dialing to seriously increase sales teams’ productivity. I thought you might be interested in hearing more about it! I’ll let you two take it from here.

Best—

Jeff

Send the email template to your customer, let them know that they can use it if they’d like (or write their own), and make sure to thank them for helping you out with a referral. Some people will use your template. Others will write their own. It doesn’t really matter to you — as long as they put you in touch with a warm lead.

At this point, you might think you’re done. But there’s one step left:

4. Close the loop.

Getting one referral from a customer is nice. But getting multiple referrals is where you really start to get value from the process. How do you get multiple referrals from a single customer? By making sure your customers know that their referrals are appreciated. And not just by you — but also by the people they refer to you.

So when you make a sale to a referred lead, make sure to ask them to send an email to their referrer saying “thanks.” It can be as simple as this:

“Hey, I remember that Jeff referred you to us. Would you mind sending him a quick email to say thanks? So he knows you appreciate it?”

You could provide a template for this step if you like, but most people will probably fire off a quick email without giving it too much thought.

It doesn’t seem like an important step. But it can make a big difference. When someone knows that referring their friends to you does good things not just for your company, but also for their friends, they’ll keep doing it.

Make Referrals Part of Your Standard Practice

With these 4 steps, you can significantly increase the number of sales referrals you get. And as we saw before, those referrals are insanely valuable. But you need to make referrals part of your company DNA.

Make sure every salesperson is gunning for referrals after every sale. Keep following up with people to ask for referrals even if they say they can’t think of anyone at the moment. Show your thanks for people who refer new customers to you.

You might even consider instituting a referral program that offers rewards or discounts for referring friends (though I recommend waiting until someone asks for a referral discount).

Once you prioritize getting referrals and teach your salespeople how to make it happen, you’ll see big results. Build strong habits, and it will revolutionize your company.