The Importance of Referrals

I'm a picky eater, and there was nothing worse than eating at camp. Every year, I would get super excited, but absolutely dread the food. One way I got around it? Packing a ton of ramen noodle soup. If the kitchen wasn't serving anything good, at least I'd still be able to eat. All I needed was steaming hot water from the sink, and a plastic spoon from the cafeteria.

I noticed plenty of campers sharing the same problem, as they would try to bribe me for my noodles. Sometimes, I charged absurd prices, while other times, the food was too valuable to trade. I had to eat after all! Ultimately, I decided to solve this problem my peers had. The following year, I brought a suitcase filled with ramen noodles, and decided to sell it.

These packaged noodle soups created lines out the cabin door, and quickly turned into the reason why I fell in love with sales. I learned I could connect people with something they needed, and make money while doing it. I would charge $2 or $3 per soup, and they only cost ~7 cents. Talk about amazing margins!

Throughout my sales career, in addition to picking up some skills, a lot of the same apply: be hardworking, be trustworthy, and be honest. While some individuals are much more persuasive than myself, I realized two tactics that separated my chances of success in sales:

1. The Product I Sold

Some products practically sell themselves, and some are much more difficult. Sometimes, you join a startup and that product has no market need whatsoever. People needed the soup. I didn’t have to do much but supply, and show up on time. Picking something people need and want is probably the best sales advice I can offer. However, this is definitely easier said than done.

2. Going in Warm

When you are referred from a friend, that trust barrier has already been established. Going in cold can be super difficult. Chances are the person you are selling to has at least 5+ people trying to sell them something this week, too. They have priorities, they have issues at work/family that need to get solved. Everyone is vying for your prospects attention. Get a warm introduction or referral to standout from the crowd, and silence the competition. Of course you can write an amazing personalized cold email, but I’ve found going in warm is the best chance of landing a meeting.

When asking for referrals, the most important things are who you ask, when you ask, and how you ask.

Who: Happy customers. They know the value you provide, and most likely know other people like themselves.

When: Once the value has been delivered. Many make the mistake of asking right after a sale. Don’t do this. Fulfill your promise, and earn the right to ask for a referral.

How: The more high touch your ask is, the more likely you will get a referral. In fact, a recent study from Western University found that “a face-to-face request is 34 times more successful than an email.” Of course, face-to-face isn't always possible, but the more personal, the better results.

It’s pretty simple: “Make sure the dogs are eating the food,” and do your best to go in warm. In doing so, you will cut through the noise, establish trust right away, and be on the fast-track to closing a deal.

Seth Gold | CEO, Entro

Seth Gold