The big difference between a cold call and a referral call is social capital.
Social capital is the currency of relationships. It’s the currency of trust. If you’ve been in sales doing it the old school cold calling way long enough you may start to believe social capital does not mean anything. But I believe it means a lot.
OK social capital is in our minds but “perception is reality” in sales. Perception in our prospect’s mind is what sales and marketing is all about.
When we call or email a prospect totally cold our social capital is close to zero. The prospect has never heard of us. And they have no social capital at stake. We have to appeal to them (beg) to listen to us based solely on a business value proposition.
OK so we’ve been taught that you need to have an excellent business value proposition. You do. But that’s not the only criteria the prospect uses to evaluate your call. In fact it’s not even the #1 factor!
Do I know You?
The #1 factor is…“Do I know you?”
We know this pretty clearly from looking at how people react to email. The VERY First thing they look at before they decide whether to delete is…the name of the sender. #1 evaluation criteria. “Who are you?” #2 criteria is the Subject line, which is usually a business value proposition. But #1 is “who are you?”
Same on the phone. #1 thing in my mind when I receive a call is “who are you?” Hey we even try to figure that out before we pick up from the caller ID!
When we get referred then we change the paradigm. The person in the middle is the key. If we have built up a real relationship with the person in the middle we have a positive social capital “account” with them. When we ask for a referral we essentially take a small withdrawal from that account and take that capital to our prospect call.
What does this mean in practice? If we do this the right way we get our mutual friend to (at least) drop an email to the prospect saying “Nigel’s alright. It’s safe to talk to him. His products are kosher. Don’t worry he will do good by you”.
Now when we call our prospect she’s already received this email from a mutual friend. She knows who we are. She thinks “oh right, Nigel, Jack said he is OK. It’s OK to talk to him”
Prospect has Capital at Stake
But wait there’s more (no, not steak knives)!
In this referrals scenario when our prospect hears my name she actually has something at stake…social capital.
Not only does she know that I’m a decent bloke but she also wonders if she blows me off whether that will lose “brownie points” with Jack. After all she knows Jack likes me and she likes Jack. Is she willing to meet Jack at the next barbeque or parent-teacher conference and risk Jack asking “what did you think of Nigel?” and she’s put in the position of saying “uh, I blew him off” (or the nice version of that)?
Now the amount of social capital our prospect has at stake varies based on who Jack is, how well our prospect knows Jack and how well Jack knows me. But this dynamic of social capital being at stake very much balances the playing field between prospect and sales person. The prospect goes from thinking “let me just get rid of this sales person quickly” to “oh, this is our mutual friend, I better at least listen to what they’ve got to say”
David Brown says
100% spot on Nigel.! When we leverage our relationships, that social capital opens the door for better opportunities.