I was visiting a window manufacturer this week and he was telling me about a struggle he is having with his sales team. “They are losing out when it comes to the power of referrals!” he said. It seems they are not concerned enough about the satisfaction after the sale. Sometimes they just do or say whatever they feel they must in order to close the sale. If the customer discovers something negative about the sale afterwards, the feeling that the salesperson oftentimes has, is “they will get over it,” or “so, what? I already got the sale.”

“This negative interaction between buyer and seller is due to the fact that many homeowners, sensing that it is a buyer’s market, are beating up on salespeople,” he said. “I can get a better deal down the street! You’re going to have to give me free financing or a bigger discount or a free upgrade in order to get my business!” are buyer’s comments that our salespeople often face. There is a feeling that they (the homeowners) are exercising a sense of leverage over the salesperson, playing offers from one company against the other. The salespeople end up resenting this so they fight back with some crafty sales tactics on their end of the equation. “In the end the salesperson oftentimes cares only about getting the sale and not so much about the post-sale customer satisfaction!”

For example, the salesperson may promote a same as cash payment option, knowing all the while that a particular homeowner has only a small chance of paying off the amount financed in time to avoid finance charges. These same as cash finance programs, if not paid off during the agreed upon time period, end up rolling into a loan with a double digit interest rate! Perhaps the homeowner would have been better served to apply for an unsecured loan with a single digit interest rate and no prepayment penalty? “Well that wouldn’t have sounded as good to him!” is the salesperson’s response, and “I may have not gotten the deal!” “But what if he or she runs into trouble down the road trying to pay off this loan while strapped with a 22 percent interest rate?” I ask. “Who cares?” is the response from the salesperson. “I got the sale and I got paid. I am done with them and I’m moving on to the next guy!”

What the salesperson in this case is forgetting about is the power of the referral, as well as the negative consequences that buyer’s remorse can have upon the future marketing efforts of the company. The impact upon future sales and profits can be huge! Just as customer satisfaction can have such a strong positive impact on future sales, buyer’s remorse can also have an equally negative consequence!

According to Dan Wolt, owner of Zen Windows in Columbus, referrals represent 50 percent of his leads, and nearly all of them end up being new customers. Dan personally visits each job site the day of installation. He shows up after the sale too to make sure that each customer is 100 percent satisfied. “I consider each and every homeowner who buys from me as part of the Zen Windows family, and I stay in contact with them on an ongoing basis. When they talk to their friends, they are excited to convey their positive experience with Zen Windows. I just had windows installed into a customer’s million dollar home. I am making 100 percent certain that they are completely satisfied. So when their neighbor, who also owns a million dollar home, comes over to visit, they will hear all about the positive buying experience with Zen Windows! And when this neighbor needs new windows, I will get the call!

Why are referrals so great? Dealers who capitalize on referrals tell me that a referred client is pre-sold, the referred dealer has a high degree of credibility and trustworthiness, the competition decreases or disappears, and that they end up with a new customer between 75 and 95 percent of the time! .

Referral customers are also less likely to haggle over price. This combined with the fact that the sales process is shortened, and advertising expense is reduced, means that sales to referrals result in increased profits.

But perhaps the greatest part of doing business with referrals is that they in turn give referrals to others … and so on and so on!



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