In a technology-driven sales market, it’s easy to become complacent in your prospecting game. After all, technology finds and follows up with clients automatically. But don’t forget that good salespeople use any channel possible to drum up new business. One of the tried-and-true methods is the classic warm introduction.
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Why Warm Introductions?
Cold calling has been dropping out of favor for years in the world of sales, becoming less effective as customers manage hectic, busy lives and deal with unprecedented amounts of spam.
While cold calling doesn’t usually result in a sale (a study done by Harvard Business Review found that cold calling has a success rate of 9.1%), the more effective warm introduction often does. That’s because warm introductions focus on the power of human connection, familiarity, and trust.
It’s worth knowing the difference and how to execute a warm introduction to boost sales and better connect with prospects. In this article, we’ll outline these differences, look at some recent statistics, give some examples, and show you exactly how to make an effective warm introduction.
What Is a Warm Introduction?
Warm introduction: In sales, a mutual connection introduces a seller to a new sales prospect, effectively “warming up” the lead through the seller’s connection to someone known by the sales prospect.
We use the words “warm” and “cold” in sales to designate whether or not the prospect has been contacted by you before. The warmer the lead, the more interest they’ve shown, and vice versa.
A cold call is placed to a lead who may have never heard of you and has not indicated any interest in your services. A warm lead has already indicated that they are interested in communicating with you.
Following that logic, a warm introduction is different from introducing yourself to someone. It’s tapping into the existing connection between someone you know and a sales prospect you’re interested in contacting.
If cold calling (or cold email) is reaching out to someone you don’t know in pursuit of making a sale, a warm introduction is reaching out to someone you do know to introduce you to a new sales prospect.
In the example above, think about Jane’s coworker, Kate. She doesn’t know Bob, the salesperson, and if he tried to cold call her about buying software with no real connection to her or the business, we can guess what would happen (no sale).
However, with Bob’s connection to and introduction by someone Kate knows and trusts (Jane), the communication is more accepted and less intrusive. Warm introductions are also often used in the world of venture capitalism, where investors look for up-and-coming startups to invest in and support.
Without an existing connection to a top VC (venture capitalist) or VC firms, startup founders lean on friends, coworkers, or acquaintances to introduce them to an angel investor and increase their chances of getting funding. Investors often rely on these introductions as a way of vetting founders seeking funding.
Introductions and Trust
Anywhere a connection to a decision maker could be useful, warm introductions can serve an important purpose because they forge new connections.
A decision maker might normally ignore or miss a well-crafted email or phone call pitching your product or service because they get so many. However, a simple introduction from a trusted acquaintance can lift a pitch out of anonymity and make it stand out when it matters most, regardless of the subject matter.
It taps into the human desire for connection and trust, to gravitate toward that we know versus that which is unknown. What is the best way to ask someone for a warm introduction? It’s simple.
Asking for a Warm Introduction
Asking for a warm introduction by a friend, coworker, or client is not difficult, but it may not be favored by everyone. When asking for an introduction, you should start by asking how they feel about connecting you to the other person.
“Warm introductions outsource judgment to others.” – Del Johnson, Venture Capitalist”
This gives your friend or coworker an opportunity to politely decline the introduction if needed. Why would someone decline making an introduction? There are plenty of reasons, but these are a few of the most common. They:
- Don’t know the other party well enough to introduce you
- Know the other party dislikes this form of connecting
- Feel your product, service, or business isn’t a good fit for the other party
Warm introductions can be made in person, through a phone call, email, or on social media. Today, nearly 75% of decision makers use social media as a tool in their buying process. This makes social media a compelling place to make and request these introductions.
If you ask someone to give an introduction and they accept, remember: They are now in charge of framing you, what you do, and what you sell to the other person.
They already have some kind of relationship with the person you’re interested in connecting with. It could be good or bad. This is why it’s important to be selective about who you ask to introduce you.
How Effective Are Warm Introductions?
We know that introductions can increase sales success, but by how much? Quite a bit, it appears. Hubspot found the following statistics:
- Buyers are 5x more likely to engage when they’ve been introduced to a salesperson in advance
- 73% of executives say they prefer to work with salespeople that have been referred to them by someone they know
- 84% of B2B decision makers start the buying process with an introduction
- Referral leads convert 30% more than leads from other channels
- Referred customers have a 16% higher lifetime value than non-referred customers
Not only are these warm introductions (which are essentially personalized referrals) turning more prospects into customers and buyers, but they’re also resulting in more money spent by the customer over time.
Think about what these statistics say about the power of familiarity and trust in the world of sales and venture capitalism. The best product or startup in the world can go unnoticed without the social power of connection. Connection and trust are key in sales, making warm introductions not just an option, but a necessity.
Whether you’re trying to make a name for yourself as a serial entrepreneur, real estate agent, or simply making as many connections as you can to improve your sales network, warm introductions are an essential piece of the puzzle.