3 steps to take the deal home (without a reference)
You’ve been on the phone with your prospects for a while, and your sales game is on fire. You’re pumped, and ready to seal the deal.
Then they pop the question: “We’d like to get a sense of your business from customers similar to us. Can you provide some references for us?”
The problem is you don’t have these references—your prospects operate in a different industry than the rest of your customer base. You want to make the deal happen so badly, you’re tempted to fudge the truth.
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Stop—don’t lie about references or customers in a specific vertical when you don’t have them. As Anthony Iannarino says, “You never want to start a relationship with a lie. There is no business that is worth gaining if you have to lie to obtain it. Even little white lies.”
Say: “I’m going to be 100% honest with you. We don’t have any other customers in your industry, but we’ve made hundreds of customers successful in many different industries, and I know we can make you successful, too. I understand your hesitation, but we can work around it.”
What’s most valuable to you is building a relationship with your prospects, where they’ll become your most powerful champions in this new industry or market. They’ll become your references, and close deals for you. Not only will you walk away with a new customer, but open the gates for more to follow.
The power of the reference (and why you don’t need one)
References drive sales. According to the Gartner Group, references are the #1 influence for buyers during the purchasing decision. 60% of buyers will ask you for a reference, and 70% of those will ask you for more than one. If you don’t have a framework for resolving the reference objection, that’s 60% of new business you risk losing.
Even if you have a reference, you’ll often lose a sale because it’s not as good as it should be. While sales managers claim that over 80% of their references are highly positive, over 50% of sales are lost because they’re still not positive enough.
When a customer asks for a reference, they’re really asking for a kind of guarantee. They’re afraid of making a costly, time-consuming mistake that will put their own reputation and success in the workplace at risk. By asking for a direct reference, they’re providing themselves with cover. As the expression goes, “Nobody ever got fired for buying IBM.”
What’s really at stake is the trust and credibility your prospects have in you, and references are just a way of striking at this larger issue. Ultimately, sales is about confidence and trust—and there are a lot of ways to provide this to your prospects, to do right by them. If they believe in you and have faith in you, you can do anything. Sell customers on confidence.
Let’s dive into the 3 steps for how you can navigate the reference objection, and lay a groundwork of trust that will keep your prospects coming back for more.
1. It’s all about fit
At this point in the deal, you’ve already taken the steps to build a relationship. You’ve properly qualified your prospects, gained a sense of their needs, and identified the pain points your product can help alleviate. What’s most important is that your product is the right fit for the job.
Run through these touch points again with your customer. Go through their workflow, and the specific ways your product will make them more efficient, productive, and profitable. Focus the conversation around how you can make them successful, and how both sides have already established that it’s a great fit.
Show that you’ve done your homework, and are truly invested in enabling their success. It’s the best way to start building up the confidence and trust you need to make the deal happen.
By reiterating all the ways you and your prospects are right for each other, you start to smooth away their uncertainty about making the purchasing decision. It won’t resolve all their concerns, but will set you up nicely for the next step.
2. Tap into the power of social proof
Once you’ve identified the specific problems of your prospects, harness the power of social proof to further increase credibility with your prospects. You might not have any industry-specific references to provide your prospects, but you almost certainly have existing customers with similar problems.
Your product probably solves a wide range of problems, with universal applications beyond industry or market. Dig into your customer base to identify shared characteristics between your current customers and your prospects. Start turning doubt into trust.
Call your prospects up on the phone: “We have x amount of happy customers outside of your industry. Some of them are your size, some are larger, and some are smaller. I can connect you with any number of these companies, so you have a sense of how we grow with our customers, and enable their success. I want to make sure you have everything you need to make the most informed decision possible.”
Point them to existing customers that shared their pain:
- Company X used our product to bolster workplace efficiency.
- Company Y used our product to eliminate manual data entry.
- Company Z used our product to scale their rapidly growing workforce.
Give them many references from these customers to alleviate specific worries about the implementation of your product. Have other people confirm the fact that you’re a proven solution to a whole variety of problems and issues, and that you can deliver.
People rely on social proof to make decisions. Luckily, there are many ways to get at it, beyond any one reference from a specific industry. Social proof is about the larger confidence and trust that your customers have in you. You can even use it to make your cold email outreach much more effective. Show your prospects the wide range of social validation for your product, and they’ll be more likely to come over to your side.
3. Sell opportunity
After you’ve taken the steps to build up confidence and trust in your product and your business, it’s time to clinch the deal by shifting gears. Tackle the reference objection full-throttle. Address the elephant in the room, and transform it into a powerful advantage.
Don’t dance around the subject of references, and say: “Well, um, we have had a lot of interest from customers in your industry. We think we’re going to grow a lot in that sector.”
Tell it like it is: “We don’t have any customers in your specific vertical. You would be the first—and let me tell you about the huge benefits of being first. We’ll give you special support and free consulting. We know we can make you successful, and we’re invested in that success because we want you to be a case study for our product. You’ll be the first in this space to use our product, and dominate the competition.”
Give yourself an edge by going places other people won’t. Your honesty will inspire trust from your prospects, and flip the problem around. At the same time, offer incentives to help mitigate the risk they’re taking, like incredible support and premium consulting. Show that your success is predicated upon theirs, and that you’re willing to go the extra mile to achieve it.
Communicate to your prospects that there’s always risk when it comes to making a purchase of this nature—but it’s because of that risk, that there’s the possibility of huge upside:
- References aren’t a true indicator of future success for a company. It just makes your prospects more confident—that’s what social proof is really about. No one can tell them for 100% certain that it’ll work out.
- Because of this uncertainty, and because you don’t have a million references in your customer’s specific industry, it’s an opportunity for them to be the first, and to take full advantage. You’ll be with them every step of the way.
Sell them on the opportunity to be first, to be a trailblazer. Remind them how they once bought a Mac when everyone was slinging Windows—and loved it! People don’t like taking risks, unless there’s substantial profit involved. Sell them on the upside and on opportunity.
Confidence = sales success
At the end of the day, confidence is at the heart of sales. The way you react to and manage objections will either increase your prospects’ doubts and hesitations, or convince them to close the deal. Sales is about a transfer of confidence, from the salesperson to the prospect. Make eye contact, smile, and stay confident—that’s how you close deals.
Instead of running away from your problems, or trying to hide them, own up to them. Turn them into your advantages. You started without any references, and you’re still in business, going strong. By tapping into this energy and confidence, you’ll be able to close prospects, and successfully expand into new verticals and markets.
Ready to improve your negotiation skills? Steli shares his highly effective framework for winning better deals in our free book, The Founder's Guide to Sales Negotiation. Download it today!