professional services

Referrals - The 3 Step Plan Every Business Owner Needs to Know

Referral Engine Marketing Next to selling more to your current clients, referral marketing is the easiest sale of all. But most small business owners approach it as though it’s rain falling from the sky—they have no control over referrals, they just hope it comes when they need it.

Hope is not a strategy…

If you want more referrals, the good news is that they are just 3 simple steps away…

Step 1. Ask for referrals!

Ok, I know that seems a little simplistic (and it is…we’ll talk about how to ask in a moment) but seriously, if you want more referrals, ASK!

The trick is in knowing how to ask. For most of the business owners I work with there are four barriers to getting more referrals.

The Barriers to Getting Referrals

1. You’re uncomfortable asking for referrals (for some people it not discomfort…it’s downright fear). It’s OK. In fact it’s totally normal to be uncomfortable…even afraid to ask for referrals.

You don’t want to offend your client by begging for more business after you’ve already taken their money, right? I mean, really…it’s like saying you’re just not enough for me, I need more.

If you feel that way about asking for referrals you are far from alone. But your fears are unfounded. In his latest book Referral Engine, John Jantsch shares research that proves we humans are “wired to refer.”

If you think about it, sending someone you care about to a great resource makes YOU feel good and makes you valuable to the other person. It’s a win-win. So your clients need to refer you.

By referring you to others your clients confirm their decision to use you in their own minds. You can actually increase client satisfaction by asking for referrals.

2. You don’t know how to ask. The words you use when you ask for a referral matter greatly. Use the wrong words and you sound selfish, sleezy or worse…desperate.

As I coach business owners to get more referrals, the easiest way I’ve found is to simply ask your clients for introductions.

And be specific about who you want to be introduced to…name names if you can. (I’ll talk about the importance of being specific in a moment.)

3. You don’t know when to ask. Timing is everything. Should you ask at the moment the ink dries on the contract, at the end of the project or somewhere in between?

One of my clients makes a habit of asking anytime a client thanks him for his work. It goes something like this:

Client: “Thank you so much for taking care of this for me…”

You: “You’re welcome. I’m glad you feel good about our work together. Tell me, do you know just one friend or colleague who might need my help too?”

Client: “Yes…my friend Mary.”

You: “I’d love to help Mary if I can. Would you please introduce us?”

Client: “Absolutely!”

Simple…and not at all sleezy.

In my experience there is no one best time to ask for referrals. Ask when the ink dries, because a referral here can boost client retention and stave off buyer’s remorse.

Ask again whenever the client praises you (if they’re praising you daily don’t ask daily…but you could certainly ask monthly without being a pest, if you do it the right way).

4. You don’t have a system for asking for referrals. This is where most businesses fail in referral marketing. They just sit back and expect referrals to show up. Some will, but you’re leaving big heaping piles of cash on the table if you’re not stimulating referrals.

You’ve got to create a system to get referrals, to track referrals, to reward clients who refer and to follow-up with the referrals you receive.

Step 2. Be Specific When You Ask For Introductions

I don’t know Someone or Anyone and neither do your clients. Most of the time when I ask business owners to tell me who would be a good lead for them (and I ask it of just about everyone I meet) I get an answer like this…

“Anyone who has a home really…” or

“Everyone with a car is a prospect for me…” or

“Someone looking to be healthy…”

Sounds absurd when you read it. And it makes it almost impossible for me to refer to you. You have now put the work of identifying your prospects onto me. I hate to tell you, but I’ve got enough to do and I’m not doing your work.

You must make it easy for clients to refer you. Do all of the leg work for them. Then use them to do the one thing you really need…introduce you.

Here’s what I use…

The Top 10 List

My friend and mentor Greta Schulz taught me this trick. I keep a list of the Top 10 people, companies or professions I want to meet. I list them on a one-pager and include my contact information and a short sentence or two about how to introduce me.

You can download a copy of my Top 10 List Networking Template and use it for yourself.

When I meet with strategic alliances or when I ask clients for introductions I simply ask if I can share a list of people I’m looking to get introduced to.

They always say yes…then I give them a copy of my Top 10 List and ask if they know anyone on the list.

You’ll be amazed at how quickly you’ll get introduced to the 10 people on your list. Then you add another 10 and off you go.

I used this technique when I moved to Tallahassee, Florida in 2007. I knew 2 people in the business community. In just 12 months I was “plugged in” and all of the key people I needed to meet were in my network.

And the best part is that you’ll look like a networking rock star when you use this one little tool. People will ask if they can copy it (and you’ll always say “Of course!”)

One little ninja trick: Ask the other person for their Top 10 List so you can help them get introduced to people you may know.

They’ll fall all over themselves thanking you. Unfortunately, only 1 in 100 will ever send you anything.

So make your list today!

Do Some “Reverse Prospecting”

This is a master technique, that’s so simple, but no one does it. Call one of your closest allies (someone who you have a solid relationship with) and invite them to lunch. Let them know that you want to refer more business back and forth.

Then ask them to bring their client and prospect lists. You take yours.

When you get to lunch swap lists. You check their list for prospects and they check yours. Then agree to make the introductions within a week of your lunch.

Sometimes that’s all you need to create a flood of referrals.

Step 3. Follow-up Quickly

Referrals get stale faster than a carton of milk from the gas-station convenience store.

Commit to following up immediately with every referral. It shows respect for the person who gave you the referral and it serves the person you’re being referred to.

I like phone calls better than emails. They’re more personal and your goal is to build a relationship.

Send a thank you note to the person who referred you.

If you end up doing business, send the referrer a gift. You don’t have to spend a lot of money, but sending something will go a long way towards getting more referrals from that person.

Here’s your assignment:

1. Decide how and when you are going to ask for referrals. Write down your plan in 2-3 sentences. Having it on paper will help you stick to it. Write out the words you’re going to use to ask for introductions. Then practice with a friend, you spouse or your dog. The point is to get comfortable with the words you’ll use before you’re in front of a client. Once you’ve decided when to ask. Add it to your checklist at that part of your sales process.

2. Make Your Top 10 List. Download my Networking Top 10 List template and edit it to be your own. This one step will take you less than an hour and will set you apart from every other business in your area. Just do it.

3. Write your follow-up system. Write down the steps you’ll take to follow-up with each and every referral. Make a checklist and don’t forget to take care of the people who refer you.

Do you need more referrals and don’t know where to start? That’s why I created the Get More Clients System. To help business owners and entrepreneurs get all the clients they need to sleep like a baby every night…without worrying about how to make payroll next week. To learn more, request a Get Acquainted Session.

To your success!

Small Business Marketing Consultant Steve Gordon

How To Use The Pyramid of Influence To Beat The Recession

Last week I was listening to a talk by marketing and PR guru Paul Hartunian. In his talk he reminded me of the Pyramid of Influence described by Dan Kennedy and others for decades. There are four levels to the pyramid:

1. The Generalist - My Business is a Commodity

The generalist is known for knowing a little bit about alot of things. Or, probably better stated, is not known for anything in particular. The generalist is the lowest level of the pyramid.

Here lives your family dentist, the local insurance agent or your business attorney. Most businesses large and small sit at this level.

They sit there, not because of some market force, but because they have not chosen to be "special." You can identify a generalist business anytime you here the owner bemoan the fact that what they sell is a commodity.

2. The Specialist - See me if you need the right answer

Moving up the pyramid, with much more influence than the generalists are the specialists. The obvious example of this is your doctor. If you break your leg, you don't want your general practice doctor...you want an orthopedic specialist.

If you have a termite problem at your house, you don't want any old bug man, you want the Termidor certified specialist.

By specializing in the solution of one specific problem for a specific type of client you reduce the number of people who are prospects for you. And, you increase the magnetism of your solution to that smaller group.

Because you're speaking right at them and their specific problem, you have greater influence. You're the expert after all.

3. The Celebrity - I don't know much, but I've got your attention

In our modern world of 12,617 TV channels, YouTube, blogs and Twitter, you don't have to look far to see the influence that celebrities enjoy in our society. They shape our decisions on fashion, hair styles, cell phones, music...the list goes on.

Celebrities have more influence than specialists. Our last election is a great education on that point. Regardless of your politics, recognize that Barack Obama, the celebrity, beat two of the most powerful political specialists of the last decade in John McCain and Hillary Clinton.

4. The Celebrity Specialist - I know my stuff and the media thinks I'm cool

At the top, the people with the most influence in our world are those people and companies who become celebrity specialists. This group combines the specialized knowledge of the specialist and the public presence of the celebrity.

Examples:

  • Dr. Phil (specialist - relationships, added celebrity with Oprah appearances)
  • Suze Orman (specialist - personal finance, appears on Today Show, CNBC, bestselling author)
  • Dr. Oz (specialist - all things health and medical, on Oprah, Larry King, best selling books)

So you're probably thinking...great, how am I going to get on Oprah so I get to the top of the pyramid. My answer: if you can get there...do it.

But you don't need to.

Let me tell you about my friend John Curry. John is a financial planner. Not very remarkable, right? But John specializes in helping state employees here in Florida plan for there retirement in the Florida Retirement System's pension program.

John wrote some articles on how to have a secure retirement if you're in the Florida Retirement System. He got the articles published which led to an appearance on a local Sunday morning news talk show.

The talk show appearance has now positioned him as the celebrity specialist for the Florida Retirement System. Lots of financial planners can help you, but only John is on TV talking to all of the soon to retire state employees in the state capital.

How can you become the celebrity specialist in your market? Do it and you won't have to worry about the economy.

7 Reasons The Billable Hour Is Killing Your Business

If you're in just about any service business, you probably bill some, if not all, of your work by the hour. The practice is most sacred with our lawyer friends, but engineers, accountants, plumbers, even elevator inspectors charge by the hour.

Heck, I did it in my business for years. Then I realized that there were only two paths to growth in this model and neither are very appealing... The first is the "pyramid scheme". In this strategy you get to the top of the pyramid by owning the firm. Then you add layer upon layer of labor under you, building a pyramid. Each new layer needs to be bigger than the one before it to support the weight of overhead and promotion and salary growth of the layers above.

The second is the "hour expansion" model. In this model you and your billable labor must work ever increasing numbers of hours. In law firms, young associates fall into a pecking order based on billing 2000, 2500 or 3000 hours per year. The problem with hour expansion is that you have to sleep sooner or later. And as your labor force grows up, they increasingly choose to spend time with, of all things, their families (the nerve).

In most successful hourly billing businesses both models are employed simultaneously. But there's a limit to how far these businesses can grow. And if you can't grow, you die. So here are the 7 reasons hourly billing is killing your business:

  1. You limit your income - only 24 hours in a day...and only so many suckers you can get to work them all.
  2. You put quantity of work ahead of quality of work. Most of you billing by the hour will vehemently disagree, but you pay for quantity...you get quantity.
  3. You create distrust in your client relationships. Here's a secret--client's hate hourly billing, because they never know if they're getting fair value for the result.
  4. You eliminate the incentive to innovate. This affects you, the business owner, and your staff. Why get faster...we'll get paid less.
  5. You create a conflict between your desire for profit and your client's desire for rapid, successful resolution.
  6. You force yourself to treat your staff like mere machines, not intelligent, creative, problem solving PEOPLE.
  7. Your leaving BIG BUCKS on the table. By attaching your price to a unit of time, rather than the value you deliver, you're often going to under charge for your service. Your losing money! And, when you bill more by the hour than the total value of your service...you're pissing off your client. In both cases YOU LOSE.

Bonus #8: You're leaving a HUGE marketing advantage on the table. If you're in an industry where everyone bills by the hour, it's a great opportunity to stand apart from the crowd.

Take a stand like the folks at Valorem Law Group where they invite clients to adjust the fee to equal the client's view of the value delivered.

Most owners will see this as a huge risk (but not our steely-eyed readers). No. You see this for the marketing coup it is.

I'll bet Valorem almost never sees any ink on the "value adjustment line", but I'm sure they can count every dollar of business they've gained since they started doing it.

The bottom line is this: billing by value keeps you on-your-toes. No value created, no profit received. If you can't successfully charge for value, you've got other problems to fix.

Do you agree or am I off my rocker...spout off below!