Cold Call or Referral?

When the economy weakens; how do you get more business?  If you are in sales, the choices are narrowed down to making more cold calls or doing more business by referral.  As a salesperson, you typically do not have the money to pay for advertising, so normally you make more calls or work your network.If you know me, you know that I prefer to do business by referral.I was having a conversation with an otherwise intelligent business owner recently and he stated that his sales people should be concentrating more on cold calling than on building their business by referral in groups like BNI.  I asked why.  He stated that BNI requires too much time during normal business hours.I was stunned.Why in the world would you want your sales people to spend more time and more expense for less results? I know that cold calling can work; if you know your cold call numbers and can consistently reach those numbers, then it will work for you.  But at what expense?Personally I would rather be referred in by a someone that is a trusted referral source. The referral source can provide a warm introduction as well as an opportunity for you to walk in the door with instant credibility. When was the last time you cold called a business and walked in the door with instant credibility?Now, doing business by referral costs something too; TIME.  It takes more time to develop relationships and to educate a referral source than it does to cold call.  I prefer to invest my time in developing my referral sources.  Want to know why?  Once you have a well educated referral network, you can and will gain more business in less amount of time, with less effort. Oh, and your closing percentage increases!I am a member of BNI and an Assistant Director for the BNI Southwest Virginia Region.  I am also a student in and a Trainer for the Referral Institute and the Referrals for Life Program. I also build my network, my sales and my consulting business through various online and social resources such as LinkedIn.How do you gain more business; cold calls or referrals?John Lusher


  1. And humans expect us to act normally? ,

  2. businessgolf says:

    John,It is simply amazing the attitude some business executives have with securing sales using methods that are beyond their comprehension. I am not a fan of BNI, but to say that is a waste of time would be wrong to say. If anything, cold calling is an more of a waste of time.Referral sales or sales received through building business relationships have a much better ROI.I know the word Change has become a cliche, but he way people do business will be changing soon.

  3. Nannette Saunders says:

    I am one of the few that love cold calling. Now that been said I don’t cold call. But not because I hate it and not because I am not any good at it. But because I like to spend more time with my family. Working by referral allows me to spend more time with my family creating harmony in my life. 🙂 It is about ROI and that is just not financial.

  4. John,I agree with the business owner you were talking with on the point that BNI requires too much time. As a busy small business owner myself, and a mother of three, it is almost impossible to make those early morning meetings. I also hate cold calling. That is why I have been using a new site called <a href="; rel="nofollow">Referral Key</a> to exchange and manage my referrals. It has all the benefits of BNI, but it is online, which has been much more efficient for me!

  5. And humans expect us to act normally? ,

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