Taking Charge

The best word-of-mouth programs I’ve seen happen by design, not by accident or wishful thinking. Unfortunately, many businesspeople view word of mouth somewhat like the weather: “Sure it’s important, but what can I do about it?”

Based on more than two decades of research, observation, and practical experience, I’ve found that in addition to focusing on the important issue of customer service, the average businessperson has much to do in order to build a referral business.  Word of mouth can be planned and nurtured.  Anyone, including business owners, entrepreneurs, sales representatives, staff employees, even individuals serving in a volunteer capacity in any field, can accomplish plenty with a well-structured and systematically executed word-of-mouth plan.

All too often I have seen businesspeople waiting for business to walk through the door. They think because they are good at what they do, people should be flocking to them.  I’m afraid the truth is, it doesn’t work that way!  You have to take charge, no matter what business you’re in or how good you are, and bring the business to you.

I once saw a cartoon strip of two large, ravenous-looking vultures perched on a tree limb, overlooking a dry desert plain.  After quite a while, one vulture turns to the other and says, “Wait for something to die?  Heck, let’s kill something!”  So it is with word-of-mouth marketing.  You can’t simply wait for people to come to you.  If you do, one of your competitors who also provides good customer service will most likely find them before they show up at your doorstep.

If you want to succeed, you have to go get your business, or better yet, have someone else get it for you through referrals.

Finding Your Starting Point

If you have little or no experience with referral marketing, it would be a mistake to jump into action without preparing yourself. Central to the referral-marketing process is getting people to send you referrals. To do so, they must know exactly what you do — what product or service you provide or make, how and under what conditions you provide it, how well you do it and in what ways you are better at what you do than your competitors. You have to communicate this information to your sources. And to communicate effectively, you must know the same things.

It may seem a no-brainer; don’t we all know what we do for a living? Yes, of course, most of us do. But can you communicate it clearly and simply to your potential sources? When you try to do so, you may find that you’re not quite as clear on the facts as you thought. And if you can’t tell your potential sources what you do or what you sell, how can they send you good referrals?

Before you map out where you’re going to take your business with your referral-marketing campaign, pause and get a clear picture of where your business stands today. Try to answer, in simple terms, the following questions:

  • Why are you in business?
  • What do you sell?
  • Who are your customers?
  • How well do you compete?

Answering these questions for yourself will help you tell others what your business is about. This will make you more effective at implementing your comprehensive and systematic referral system.

Make No Assumptions

Many people make the fatal mistake of assuming that others know a lot about their business. I heard a florist tell a networking group, “I’m not sure what else to say.  You all know what a florist does, right?”  Wrong!  We didn’t know the variety of products this florist provided.  He knew his business and assumed that everyone else knew it as well.  Later, I asked him whether his shop was an FTD florist and . . .

  • Did he accept credit cards?
  • Did he offer seasonal specials for holidays?  If so, which ones?
  • Did he handle emergency orders?
  • Could he do a good job for weddings?
  • Did he give a discount to members of his networking group?
  • Could I set up a billing arrangement with his company?
  • Could I order online?
  • Do certain colors of roses signify certain things?
  • What type of floral arrangement would be appropriate for a graduation?
  • Could he give me any tips on keeping flowers alive longer?
  • What was his most challenging order?

I told him there were hundreds of things I didn’t know about his business, and others surely felt the same way.  Not using his time with the networking group to tell everyone something about his service was an opportunity lost.

Everyone has something he can say that will educate people about the services he has to offer.  Don’t pass up a chance to teach people more about what you do!

Try making a list of questions, such as the ones above, that people might ask you about your business and then try focusing on answering one question each time you attend a networking meeting — you’d be surprised at the things people really have no idea that you do!

Expanding Your Overall Sphere of Influence

The foundation of any word-of-mouth marketing effort is people.  Your sphere of influence represents the overall number of people with whom you network. These are people you know either very well or as casual acquaintances.  To evaluate your sphere of influence, take inventory of the people you already know.

Surprisingly, many people have never established effective networking relationships with others they’ve known for a long time.  Preparing your inventory is as simple as asking yourself, “Whom do I know?” or, “Who knows me?” This includes everyone with whom you interact or might interact with, personally or professionally:

  • Clients
  • Business associates
  • Vendors
  • Creditors
  • Employees
  • Friends
  • Family members
  • Others

Go through your software database, e-mail contacts, Rolodex, mobile phone contacts and business card collection. Discard the names of all people who have moved on or with whom you’ve lost touch. Analyze your relationships with the ones you feel are still current. Ask yourself, “How well do I know them?” Then determine whether each individual is a Strong Contact (a close associate with whom you will network actively) or a Casual Contact (an acquaintance with whom you will network passively).

Remember, the more people you network with actively, the greater your sphere of influence will be.

Bob Burg’s 10 Networking Questions That Work Every Time

My good friend, networking expert Bob Burg, has 10 questions he personally uses when networking that he believes every networker should memorize.

Bob explains that these questions are not designed to be probing or sales-oriented in any way; they are all friendly, fun to answer, and will tell you something about the way the person answering them thinks.  You’ll never need or have the time to ask all 10 questions during any one conversation but, still, you should internalize them.  Know them well enough that you are able to ask the ones you deem appropriate for the particular conversation and time frame.

Here are the 10 questions:

1.  How did you get started in the (______) business?

2.  What do you enjoy most about your profession?

3.  What separates you and your company from the competition?

4.  What advice would you give someone just starting out in the (______) business?

5.  What one thing would you do with your business if you knew you could not fail?

6.  What significant changes have you seen take place in your profession through the years?

7.  What do you see as the coming trends in the (______) business?

8.  Describe the strangest or funniest incident you’ve experienced in your business?

9.  What ways have you found to be the most effective for promoting your business?

10.  What one sentence would you like people to use in describing the way you do business?

Like Bob says, you’re not going to get to ask more than a few of these questions during an initial conversation,  so don’t worry about sounding like you’re conducting an interrogation. These are feel-good questions people enjoy answering, and they are meant to establish an initial rapport.  So next time you’re at a networking event, try using a few of these questions and then come back and leave a comment about how using them worked out for you; I’m more than willing to bet you’ll be pleased with the results.

Becoming a Notable Networker–Tips and Insights

If you really want to succeed at networking, take a look at the following tips and insights:

  • Notable Networkers are people who are skilled at networking and committed to the idea that givers gain. By helping other businesses get new clients or customers, they get new business sent their way.
  • The key to building a word-of-mouth-based business is mutual support, not necessarily friendship.
  • Organizations that network effectively provide opportunities to develop and exchange quality business referrals. Being a member of a well-organized network is like having dozens of salespeople working for you, each referring prospective clients your way.
  • A Notable Networker must have a positive and supportive attitude. Good networking involves providing a positive and supportive environment for other businesspeople.
  • A Notable Networker must have and use the right tools to network skillfully, including an informative name badge, business cards and a business card carrying case to hold others’ cards.
  • Networking is an acquired skill; it requires listening to CDs, reading books and articles, talking to people who network well, and practicing what you’ve learned.
  • Effective networking requires practice, practice, practice–and then more practice.

Is there a bullet point in this list you would like me to expand on? If so, leave a comment and let me know; I’m more than happy to oblige. 🙂

The Networking Disconnect

I was at a big networking event with more than 500 people in the UK this summer, and the person who spoke before me asked the audience: “How many of you came here hoping to do some business–maybe make a sale?”  More than half the people in the audience raised their hands. He then asked, “How many of you are here hoping to buy something?”  No one raised a hand–not one single person! This is the networking disconnect.

If you are going to networking events hoping to sell something, you’re dreaming. Don’t confuse direct selling with networking. Effective networking is about developing relationships. I know, I know . . . there’s always someone out there who says, “But, Ivan, I’ve made a sale by attending a networking event!”  OK . . . I’m not saying it doesn’t ever happen–it does.  I’m just saying it happens about as often as a solar eclipse. Face it, even a blind squirrel can find a nut. Any businessperson can stumble on some business at a networking meeting from time to time. However, when you have most of the people at an event trying to sell and virtually no one there to buy, you’re crazy if you think the odds are in your favor to “sell” at a networking event.

So why go?  You go because networking is more about farming than it is about hunting. It’s about developing relationships with other business professionals. Sometimes you go to a networking event to increase your visibility, sometimes you go to establish further credibility with people you know, and sometimes you may even go to meet a long-time referral partner and do some business. In any case, the true master networkers know that networking events are about moving through the VCP Process and not about closing deals.

I’d love to hear your thoughts.

Entrepreneur Magazine’s Winning Strategies for Business Conference

Entrepreneur magazine’s Winning Strategies for Business Conference is being held in Long Beach, Calif., on Oct. 5. If it’s possible for you to attend, I highly recommend that you go. This event offers serious educational value, plenty of opportunities to network and, best of all, registration is FREE!

I’ll be giving the keynote presentation, “Networking Like a Pro,” during the morning session and I’ll be talking about how to create, maintain and serve a wide network and enjoy great business and personal rewards as a result.

If you can make it out to the conference, I’d love to have the opportunity to meet you, so please take a moment to introduce yourself during one of the networking sessions or after my presentation.

The focus of the Winning Strategies for Business Conference is to show you everything you need to know about how to go further and achieve more by teaching you proven tactics that will impact virtually every aspect of your business. Bruce Kimbrell of Disney Institute will be giving the afternoon keynote presentation, “Disney’s Approach to People Management,” and there will be a handful of other dynamic speakers presenting on topics such as SEO, social networking and PR, fundraising, launching a new business, brand building, driving sales and more.

There will also be a one-of-a-kind opportunity for you to pitch your business to Entrepreneur‘s editors for a chance to have your business featured in either Entrepreneur magazine or on Entrepreneur.com

(Now that is a great opportunity!)

Hope to see you at the event! CLICK HERE TO REGISTER FOR FREE or to get more information on Winning Strategies for Business.

How Soon Should You Expect Profitability from a Relationship?

Over the past couple of weeks, I’ve written a few blogs on the VCP Process® of networking and, since I’ve already covered visibility and credibility in detail, today I’m going to tell you what you need to know about profitability, the third and final phase of the VCP Process.

The mature relationship, whether business or personal, can be defined in terms of its profitability. Is it mutually rewarding? Do both partners gain satisfaction from it? Does it maintain itself by providing benefits to both? If it doesn’t profit both partners to keep it going, it probably will not endure.

The best piece of advice I can give you in regard to when to expect to get to profitability is to be patient. The time it takes to pass through the phases of a developing relationship is highly variable.  It’s not always easy to determine when profitability has been achieved: A week? A month? A year? In a time of urgent need, you and a client may proceed from visibility to credibility overnight. The same is true of profitability; it may happen quickly or it may take years, but most likely it will be somewhere in between. It will depend on the frequency and quality of the contacts and especially on the desire of both parties to move the relationship forward.

Shortsightedness can impede the full development of the relationship. Perhaps you’re a customer who has done business with a certain vendor off and on for several months, but to save pennies you keep hunting around for the lowest price, ignoring the value this vendor provides in terms of service, hours, goodwill and reliability. Are you really profiting from the relationship, or are you stunting its growth?  Perhaps if you gave this vendor all your business, you could work out terms that would benefit both of you.  Profitability is not found by bargain hunting. It must be cultivated. And, like farming, it takes patience.

Visibility and credibility are important in the relationship-building stages of the referral-marketing process.  But when you have established an effective referral generation system, you will have entered the profitability stage of your relationships with many people–the people who send you referrals and the customers you recruit as a result. It’s an essential part of successful relationship marketing and networking.

The First Phase of the VCP Process–Visibility

Last week I wrote a blog explaining the VCP Process, which is a huge part of the foundation of networking. Because this process is so crucial to effective networking, I promised to write a blog entry for each of the three phases (visibility, credibility and profitability), and today I’m going to talk about why it all starts with visibility.

The first phase of growing a relationship is visibility: You and another individual become aware of each other.  In business terms, a potential source of referrals or a potential customer becomes aware of the nature of your business–perhaps because of your public relations and advertising efforts, because of your social media presence or perhaps through someone you both know. This person may observe you in the act of conducting business or relating with the people around you. The two of you begin to communicate and establish links–perhaps a question or two over the phone or via e-mail messages about product availability. You may become personally acquainted and work on a first-name basis, but you know little about each other. A combination of many such relationships forms a casual-contact network, a sort of de facto association based on one or more shared interests.

The visibility phase is important because it creates recognition and awareness.  The greater your visibility, the more widely known you will be, the more information you will obtain about others, the more opportunities you will be exposed to, and the greater will be your chances of being accepted by other individuals or groups as someone to whom they can or should refer business.  Visibility must be actively maintained and developed; without it, you cannot move on to the next level, credibility.

I’ll talk more about credibility next week, but it’s important to understand that visibility brings the opportunity to build credibility, and credibility is what will get you to profitability, where you’ll actually benefit from your efforts. So many times people try to jump straight from visibility to profitability, and that’s not real networking; it’s just an obvious ploy to get something from your new contacts. That’s nothing more than a bad attempt at direct selling and a big waste of time.

So, how do you go about creating more visibility for your business? What are some strategies that have really worked out well for you?  I’d love to hear your comments.

What is the VCP Process?

The key concept in referral marketing is relationships. The system of information, support and referrals that you assemble will be based on your relationships with other individuals and businesses. Referral marketing works because these relationships work both ways: They benefit both parties.

A referral marketing plan involves relationships of many different kinds. Among the most important are those with your referral sources, with prospects these referral sources bring you and with customers you recruit from the prospects. These relationships don’t just spring up full-grown; they must be nurtured. As they grow, fed by mutual trust and shared benefits, they evolve through three phases: visibility, credibility and profitability. We call this evolution the VCP Process(R)

Any successful relationship, whether a personal or a business relationship, is unique to every pair of individuals, and it evolves over time. It starts out tentative, fragile, full of unfulfilled possibilities and expectations. It grows stronger with experience and familiarity. It matures into trust and commitment. The VCP Process describes the process of creation, growth and strengthening of business, professional and personal relationships; it is useful for assessing the status of a relationship and where it fits in the process of getting referrals. It can be used to nurture the growth of an effective and rewarding relationship with a prospective friend, client, co-worker, vendor, colleague or family member. When fully realized, such a relationship is mutually rewarding and, thus, self-perpetuating.

This simple concept has made a bigger difference in more people’s networking efforts than any other single idea I’ve discussed. For this reason, I’m going to devote the next few blogs I write to explaining each step of the VCP Process individually. Come back on Monday to learn why it all starts with visibility . . . I guarantee you you’ll want to read this one!

7 Ways to Connect with Networking Partners

1.  Arrange a one-to-one meeting. Meeting a referral source in person is an excellent opportunity to learn more about his business and interests. Prepare some questions in advance so that the conversation flows smoothly. Be ready to give an update on your business and to ask lots of questions about your source’s interests.

2.  Extend an invitation. Invite a referral source to a networking event. Introducing her to other businesspeople you know gives your source an opportunity to meet others in your target market and may also provide new business opportunities.

3.  Set up an activity. A recreational activity, such as a golf outing, fishing trip, concert or play, is a great opportunity to let your referral source see a different side of you in an informal setting. The activity should be one that will give everybody time to relax, but it may also include an element of information such as a speech or educational presentation. To maximize the effectiveness of your time with your sources, you should invite no more than four people and spend at least one hour with each.

4.  Arrange a group activity for clients. Gathering your clients together creates an excellent environment for synergy and for raising your credibility with all. The one thing the people in this group will definitely have in common is you, so you’ll certainly be the focus of a good many conversations. Group activities may be social, such as a barbecue or a ball game, or they may be educational, such as a seminar or demonstration.

5.  Nominate a referral source. Watch for opportunities to nominate a referral source for an award. Local service and civic organizations often present annual awards recognizing contributions to a particular cause, and local periodicals often sponsor awards contests for businesspeople. Find out what groups and interests your referral source is involved in, and check to see if there is any form of recognition associated with them.

6.  Include a source in your newsletter. Even a brief mention of a referral source in your newsletter can pay dividends down the road, including the opportunity for your source to reciprocate with his newsletter.

7.  Arrange a speaking engagement. Help your referral source get in front of a group that would be interested in her business or area of expertise. Local chapters of service organizations, such as Rotary and Kiwanis, are always looking for good speakers. If you belong to a group that invites people to speak, use your contacts to help your source make the rounds among various chapters.

What are some other ways that you recommend to stay in contact with your networking partners?

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