Why do companies teach cold calling and not referral marketing?

I have worked for 2 broadcasting companies in my professional career and all they EVER talked about was cold calling, the #’s of calls made, call reports, BLAH BLAH BLAH. They never focused on quality, just raw numbers. I always did a great job for my customers and had many loyal customers. But I never received referrals from anyone. I always heard the speakers at sales seminars talk about asking for referrals, but it all seemed to be the big mystery for me. Instead we were told about the great results the other sales people got from COLD CALLING. It was a numbers game I was told, you call 100 to get 5 meetings and close 2 deals.

Then in the fall of 2008 a close friend of mine, Brennan Scanlon, starting talking to me about referral marketing and how to sell without cold calling. I honestly thought he was out of his mind. I had heard of this mystery thing called a “referral” for many years. I had seen many referrals in our retail business, but I had never had much luck with B-2-B sales referrals. Brennan introduced me to BNI (Business Network International). I joined a chapter and attended the meetings, but still nothing. Then after about 2 months Brennan took me under his wing and started mentoring me about being a GREAT Referral Partner. We started attending referral marketing classes hosted by The Referral Institute of Cincinnati and within a month I had a plan and training on how to GIVE referrals, how to educate referral sources, how to motivate my referral sources and how to create a target market (for referral marketing). Everything I had learned had nothing to do with getting referrals for me, rather how to help others. I was encouraged to get involved with charities, alumni associations and chambers to GIVE to others. I was taught if I gave to everyone else first, I would eventually get it back times ten!

I started doing all of it. I was volunteering, I was passing high level referrals and taking referral partners on meetings with me and promoting them in my marketing. I was doing whatever I could to help professionals who were in my target market. These were people who called on the same level of decision makers I did. I was helping them grow their business and guess what happened…IT WORKED.

Within 60 days my phone was ringing. These same people were now giving me referrals, HIGH LEVEL referrals. Many closed deals. All I had to do was show up and be the great marketing person they had told their clients about. It’s been almost 2 years now since I’ve made depended on cold calls for appointments. I’ve made less than 5-6 cold calls in the past years, and my business is through the roof. In fact I’ve not called anyone but my clients, friends and referral partners in 3 months. No more dealing with business owners who don’t appreciate what you have to offer, no more 100 calls for 5 appointments. Now I make 5 calls and get 5 appointments and close 4 deals.

WHY is this not taught instead of cold calling? Since I’ve started my referral marketing plan I have TRIED VERY HARD to include some of my former colleagues in broadcasting. I’ve hand delivered numerous closed deals to them. Guess what they say, “Thanks for the lead”!!!! What, lead, that’s a closed piece of business. That’s called a REFERRAL and you shouldn’t be thanking me, you should be trying to find a way to get me a great referral. Because if we are both happy, then we both will keep giving each other referrals and everyone can stop cold calling. But if we don’t help each other, one of us will get sick of helping the other and move on.

But the sad part is NONE of them understand it. Just like many other professionals, they are so focused on making money for themselves that they don’t make time to help others. They are hammered by sales managers that cold calling is the way to go. I don’t fault most of them, but the system that most companies put in place. Most sales managers just don’t get it and in turn their sales people waste ¾’s of their week on useless worn out sales practices. The sales managers think they have great relationships with past clients. They typically don’t, they have long term clients because of their products and service but many of them will turn on a dime when price becomes an issue or someone comes along who talks faster.

WHEN ARE THEY GOING TO WAKE UP?

STOP TEACHING COLD CALLING!

Not sold on not cold calling? I receive 3-5 referrals per week.  I have personally earned over $100,000 in the past 12 months off referrals. It’s changed my life. My customers are more loyal, the retention is much higher than I’ve ever experienced and I spend 90% of my time building my business instead of on a phone at a desk.

It took me 12 years to understand and a “Sales Intervention” by Brennan.  I can’t wait for the next 30 years of referrals! The question is when will you realize it?  Maybe we need a class in college for referral marketing?

Matt Plapp is a Marketing Consultant in the Cincinnati Northern Kentucky area specializing in small business marketing via grass-roots, events, guerilla, online and social media marketing. You can contact him at matt@mattplapp.wpengine.com