Managing references and referrals effectively can pay big dividends
References and referrals are often critical to product decisions, particularly for large capital purchases. As every experienced distribution account manager knows, without references it is nearly impossible to get a large prospect to agree to move all or a major portion of their med/surg or lab spend from one distributor to another. So, why do so many of us handle references and referrals as if they were “nice to have” rather than “need to have” elements of our business? In my personal experience, I can tell you my excuse is that I was too busy. However, after losing a couple of pretty easy lab instrument orders, I decided I was not that busy. Life got better after I made that decision.
So, this month I will share my thoughts on managing reference and referrals. While they have some similar elements, they are quite different and need to be managed differently. Hopefully my thoughts will help you learn the basics without needing to experience a lost sale or two. Handled as a critical element of your business, references and referrals pay big dividends by enhancing your reputation and providing you with opportunities to grow your business at the same time. In today’s vernacular, they are part of your “brand.”
References
Let’s explore references first. What is their key value? For years when I sold lab capital equipment, I sometimes had products sufficiently portable to permit “roll in demos,” but the real exciting lab capital equipment purchases are associated with major pieces of lab equipment. Large scale chemistry, immunoassay and combined systems come to mind. They are too large and complex to permit roll in demonstrations. Even where “roll-in demos” can be done, there is always the risk of something going wrong, especially if you have not maintained your demo system in perfect condition.
The solution? Find friendly, articulate local customers who use your products and are willing to host a personal visit from you and your customer or are willing to take customer calls to explain how your solution has helped them with clinical, economic or work flow value. Their viewpoint adds instant credibility. And the peer-to-peer relationship your prospects has allows them to speak the same language.
Knowing this, how do you go about getting references in your area? My first approach has always been to ask my key suppliers for references in my area for each of the major systems I sold with them. For well-established products, this is always the best first step. With the reference list in hand, I asked my suppliers for mutual meetings to introduce me and for me to ask for permission to use them as part of my sales process, with prior notice of course. In the lab business in particular, even in primary care, most of the folks I asked to be references willingly agreed. For new products, it’s all about you and your supplier treating your first group of customers to best in class service and providing them with an exceptional buying experience. Refer to the March issue of Repertoire for my tips on managing the post-sale experience.
Once your new customer has been using your product for three to six months, you and they should know how satisfied they are and whether they would be willing to speak on your behalf. If you are confident, ask. You asked for the order, ask for the reference.
How you ask and the “rules of engagement” you offer your potential references makes a big difference. Setting clear expectations and agreeing on some simple rules are important.
Key items to agree upon:
- Customer visits or phone/webinar references
- How often can they be approached?
- Who is the key contact at the reference site?
- How much notice do they need?
- Do they expect an honorarium or some other compensation?
- What times of day work for them?
- What will they say about you, your product and service?
- You need honesty but need to know what they like and what they may indicate could be better
- Whether you would be welcome on visits and/or to log into calls or webinars
- My personal preference was to attend site visits to introduce the prospect and customer reference. I usually stepped out of the site visits to allow free dialogue after introducing the parties. I typically did NOT participate on telecons and webinars after introducing the prospect and reference to allow open dialogue as well.
- Follow-up on the reference visit or call
- Establish your follow-up timing BEFORE the visit or call and establish what you want to learn
- Also follow-up with the prospect in the same way
Referrals
Referrals should be your network of experts and resources you use as quarterback of the sale. Whether they are personnel from your company, your suppliers or independent consultants, you need to have the best at your beck and call. The essential list of referrals you need should include leasing companies, CLIA/regulatory experts, EMR/LIS resources and subject matter experts on specific topics. In today’s world, this will probably include COVID-19, Emergency Use Authorizations and molecular testing experts. Your key suppliers are always your most logical referral sources outside your company, but keep an eye open for experts your customers mention. In my experience, every region of the country has well-known experts in each of these subject areas. It pays to meet them and find out how you may be able to work together. I found that that most referral experts only want you to introduce them to your customers and give them a chance to offer their product or service.
Since this exposure enhances their reputation and market exposure, your referral of them has substantial value. Be careful who you select. I have picked some great ones and had a few not-so-good picks over the years. Each referral you make is a reflection on you, your company and your supplier. Qualify them carefully, check their reputation with your customers and ask for a personal meeting before you make a choice.
Manage your references and referrals with utmost care. You will be glad you did.