Networking – the TRUE Definitionstring(34) "Networking – the TRUE Definition"

A recent Google search for “what is networking” provided almost six billion results! We should note that those results include computer networking. However, there are still numerous definitions for non-computer networking; the people-to-people type that so many of us want to do and for which most of us have had no formal training.

As the Founder and Chief Visionary Officer of BNI® I have seen the definition of business networking evolve over the past 37 years. And yet, the essence of what networking truly is has never changed. I share my definition in this video.

My Definition

This is my definition of networking:
Networking is the process of developing and activating your relationships to increase your business, enhance your knowledge, and expand your sphere of influence or serve the community.

The Key Word

The key word here is relationships. Successful networking of any kind always begins with a genuine desire to build relationships for the purpose of giving and receiving business. When someone is networking only to gain and not to give, they will never be successful.

Remember – networking is more about FARMING than it is about HUNTING. It’s about cultivating relationships and taking the time and energy to help them grow and flourish. Think of it like this: a good farmer knows when to tend to his crop and when to harvest it. If you over pick, you’ll be left with nothing. But if you continue to care for and maintain your crop, it will grow abundantly and provide bountiful results.

Business professionals who are the farming type of networker go to networking events because of the opportunities to meet new people, not to use it as face-to-face cold calling. They know the importance of meeting someone and then building a relationship with them. They go well beyond the ‘hunting’ style of meeting people simply to be able to add another name to their contact list.

Building Relationships

At networking events, set your goal to make solid connections with people so that when you follow up with them, they remember who you are when you invite them out to coffee or lunch. Practice being interested, rather than interesting. Ask about them – their business and their current projects, instead of talking about yourself. This is how you begin building mutually beneficial relationships.

Then you can schedule additional times to connect and build credibility with them. Continue to find ways to help them, perhaps introducing them to a potential referral source or inviting them to visit your business networking group. As I said earlier, there must be a genuine desire to give, not just gain, when you are building deep relationships.

Whether personal and professional, all relationships evolve through three phases: Visibility, Credibility, and Profitability. The VCP Process® is useful for determining where you are in your relationship with others. Master networkers know that networking events are about moving through the process and NOT about making a sale or closing a deal. Skipping through the phases and asking for business without establishing a relationship will almost always result in a NO answer.

My definition of networking is congruent with my style of networking. I know it sounds simple; however, as with most things in life, it may be simple and yet not easy. Effective business networking takes time AND money. The best way to network is to connect with people. Get to know them. Build a relationship and learn about their business so you can help them get more business. Successful networking is about taking the time to cultivate relationships, always with an attitude of giving.

I’d love to hear your thoughts. Share them in the comment section below.

Are-Referrals-Always-Reciprocal

Are Referrals Always Reciprocal?string(32) "Are Referrals Always Reciprocal?"

Some people think about business networking as a game of Who is giving what to whom, always wondering how they can score more.  I caution those people that there is no rule that says, “For every referral you give, you can expect one in return.” Similarly, when you hand out more referrals, it does not mean that other business professionals will automatically do the same. It just doesn’t work that way in referral marketing. A referral is not always reciprocal.

Effective business networking is about building deep relationships with referral partners. Entrepreneurs who focus on giving first and asking “What can I do to help you?” instead of “What’s in it for me?” are usually more successful in their networking efforts.

Talk to Them

If you find that you are giving someone a lot of referrals and you are not getting anything in return, the first thing to do is to sit down with them. Be tactful and respectful. Rather than saying, “I have given you all of these referrals. How come you have not given any to me?” you can instead sit down with them and review all the business referrals you have given them in a way that shows you care about their success. Remember, it is not an interrogation: “Hey, I have given you this. I have given you that.” It is a conversation.

A good way to start the conversation is like this. “I think I have given you three referrals this year. I want to talk about how they worked out for you. I gave you this one to the ABC Company. How was that referral? Oh, that turned into business for you? What did you think of working with that person?”

Ask them how each and every referral you’ve given worked out for them. Discuss one at a time and thoroughly review that referral; ask questions about what transpired after you gave it to them. This is important. Make sure that the referrals you gave were as good as you think they were. Don’t make assumptions about them. You may have thought it was platinum and it turned out to be dirt.

Sometimes we find out that none of the referrals worked out. They may not have worked out because they were not quite as good as you thought. If they didn’t turn out as well as you thought that they would, talk about it. Ask them how you could improve in giving them quality referrals. And then listen to what they say!

By the way, that is a good question to ask even if the referrals did work out. “I am really glad that the referrals worked out. How could I improve in giving you additional quality referrals?” This is all part of building and strengthening the relationship.

How to Talk About You

After you have invested the time to talk about each referral you’ve given AND you find that all the referrals you gave to your networking partner were good and beneficial for them, you can tell them how glad you are that you were able to help them.
Then and ONLY then, do you say this:
“I am pleased that the referrals worked out for you; that is what our networking group is all about- supporting one another and giving each other referrals.” Then you can say that sending business referrals your way would be helpful to you, too. Ask if they have a few minutes now to talk about how they could find good referrals to give to you.

This is a genuine, caring, and calm conversation that comes from the intention of helping someone else. It is not based on assumptions or filled with accusations that may put someone on the defensive.

If you discover those referrals you gave didn’t work out, then I wouldn’t even go down the road of asking for reciprocal referrals. I would ask, if those didn’t work out, how can I do a better job for you? If you are doing business with someone who truly believes in Givers Gain®, they are going to ask the same of you.

Be Realistic

I am a realist. If there is someone in your business networking group that refuses to give you referrals, I can understand why you might not want to continue to refer them. However, that is rarely the case.

Remember – effective networking is about being relational, not transactional. What goes around comes around. And – it might not even come around from where you sent it. Sometimes you give a referral one place and receive a referral from someplace else. You might be getting referrals from people who you have never given a referral to.

We also want to be mindful of the value of the referrals. If we are talking about a florist and a real estate agent, the real estate agent is probably going to give the florist a whole lot more referrals than the florist is going to give to them. Although one good referral to the agent could be worth a lot of flowers for the florist. Keep in mind that it is not just the quantity, it is the quality, and the value of the referrals. All of these things have to go into the consideration.

As professionals, we must have these conversations with our networking partners. Only when you do, and find out that the referrals have, in fact, been good, can you then say, “I would love for you to be able to reciprocate if possible. Do you have time to talk about how you might be able to give referrals to me?”

Beware the Networking Disconnectstring(32) "Beware the Networking Disconnect"

Many people confuse direct selling with networking. They show up at a networking event wanting to make a sale. However, nobody attends a networking event hoping to buy something. In this video, I share a story about the Networking Disconnect.

This video is part of my Master Class from the BNI®  2021 Global Convention.

 

 

Networking is NOT Cold Calling

Unfortunately, people still use networking events as a face-to-face cold calling opportunity. They meet someone new and immediately go into sales mode. They want you to do business with them without asking any questions about you, your business, your interests, or your needs. Understandably, the people who have experienced that type of interaction at an event say that they dislike networking.

However, business networking done right can be enjoyable AND profitable. Master networkers know that networking is more about farming than it is about hunting. It is all about developing relationships with other professionals. They know that networking events are about moving through the VCP Process®, not about closing deals. They attend events to increase their visibility or to establish credibility with people they know. Sometimes they meet with a long-time referral partner to continue their profitable business relationship. 

The best way to network is to CONNECT with people. Get to know them. Build a relationship and learn about their business so you can help them get more business. Referral marketing works because of the mutually beneficial relationships built within the Givers Gain® philosophy of helping others.

More NEW Than NORMALstring(20) "More NEW Than NORMAL"

I was recently asked to share my thoughts about the new normal that we live in today.

Our business lives will be a lot more NEW than normal. To succeed, businesses need to be open to change. Strategic marketing leaders must take the lead to advocate and deliver on strategies that embrace new technologies and digital integration. You can hear more in my video.

 

 

The Status Quo is Gone

On some level, we all know that things are not going to be the same. The status quo is gone, and the change is happening. Whether we like it or not, the future involves change and change is, by nature, disruptive.

Before people adopt a new concept, early adopters embrace the new process or technology or equipment. Later, when the people who want things to stay the same – the resistant population – joins in, and, under the right conditions, there is a viral cascade of change. The NEW becomes the normal.

In today’s changing world, we will either manage the status quo which will eventually result in failure, or we can lead the disruption which is likely to lead to the reinvention of our business.

We can choose to resist the change or to embrace it. I say we go beyond embracing it, let’s LEAD it – don’t be disrupted, lead the disruption.

Success Disconnect

Success Disconnectstring(18) "Success Disconnect"

I love what I do. I am passionate about helping people improve their business and their networking efforts to achieve the success they desire. Sometimes I meet people who would like to be more successful, however, they are not very committed to making a change in their circumstances.

They have what I call a Success Disconnect. They want to be more successful and yet they do not recognize the connection between their desire for success and the behavior they are choosing. They may say that they would like to make more money, and minutes later say things which indicate they are uncomfortable making the necessary changes to get what they just said they want. 

A common Success Disconnect statement that I hear is: “Ivan, you don’t understand. That won’t work because…” followed by the latest excuse

Complacency in Networking Groups

Over the years, I have found that this can also happen with business networking groups.

In his book “Good to Great: Why Some Companies Make the Leap and Others Don’t,”  author Jim Collins said, “The enemy of great is not bad, the enemy is good.” 

In a business organization where strong relationships are critical for effective networking, members find that it is sometimes difficult to hold friends accountable for their performance in the group. Occasionally, successful groups will go through a slow phase and struggle with growth.

When I ask these groups why they believe they are struggling, they tend to answer with a variation of one of these themes:
~ “The group is becoming too lax; we’re not following the system very well.”
~ “We’re letting people get away with things we shouldn’t accept.”
~ “Our group is okay; we’re doing good enough.”

I have found that “good enough” eventually leads to “metastatic mediocrity.”
Accepting mediocrity is often at the core of a group that is facing challenges. When a  networking group, a person, or any organization accepts mediocrity, growth and performance stagnates. Complacency is the enemy of being great.

We Can Choose Excellence

People, similar to water, tend to seek the path of least resistance. The problem is that the path of least resistance may not be the best path to take for the results we want to achieve. When we expect the best from our fellow networking members, we will get it. If we expect, and accept, less than the best, that is exactly what we will get.
Why accept mediocrity when excellence is an option?

To overcome Success Disconnect, remember that we can choose excellence. Choose it for yourself and talk about it with your referral marketing group. Be willing to look for behaviors that are out of alignment with the desired outcome. Realize that overcoming the discomfort of change may be exactly what is needed to make the most of our networking opportunities.

As Jim Collins says, “Greatness is not a function of circumstance.
Greatness, it turns out, is largely a matter of conscious choice, and discipline.”

Talking About YOUstring(17) "Talking About YOU"

To achieve success in business networking, people need to know what you do and how good you are at doing it. In referral marketing groups, you have opportunities to educate your fellow members about your products and services, as well as the way you interact with potential and existing customers. This is very important to building trusted relationships with the people in your network and for building your credibility enough that they will refer others to you.

Even though most experts discuss networking as though it is easy to talk to strangers, I know that some people find it difficult to talk about themselves. Telling others how good of a businessperson you are just doesn’t come naturally to some of us. However, to get the results you want from your business networking efforts, you must get comfortable talking about YOU.

Getting Comfortable

I recently talked with Charlie Lawson, author of the books, “The Unnatural Networker” and “The Unnatural Promoter.” He says that many professionals are great at what they do. They provide amazing products and top-notch services to their satisfied and devoted clients. And yet, as a businessperson, they may feel uncomfortable with self-promotion and would rather completely avoid talking about themselves.

The best way to get comfortable is to have a group of people around you, people with whom you have good relationships, and who want to help you. When you have established deep, trusted relationships with the members of your networking group, and you’ve educated them about your business capabilities, they will begin talking about you with others. They will go out and promote you for you.

Third-Party Endorsement

The third-party endorsement has always been an effective way to promote yourself.
In my first major book, “The World’s Best Known Marketing Secret,” I discuss the fact that people are more likely to talk about you when they’re upset with you than when they are happy with your services. What you need to do is mobilize those people who are satisfied with your business, and train them to talk about you and how to talk about you effectively. That’s when you get those third-party testimonials that are so powerful.

Referral marketing works when you build strong relationships with your referral partners and are comfortable enough to talk about your business skills and strengths with them. When they are confident in your abilities, they will talk about YOU and refer other people – potential clients, to you.

This works both ways; you need to talk about and find referrals for your referral
partners, too. Remember, the Givers Gain® philosophy is based on the age-old adage of “what goes around comes around,” and giving is just as important as gaining.

I’d like to hear your experience with getting comfortable talking about yourself when networking and invite you to share in the comments.

Predictable Unpredictabilitystring(28) "Predictable Unpredictability"

Many things have changed over the past few years. We now live in a world of Predictable Unpredictability. Whether we like it or not, the future involves change. However, there is one thing that has remained unchanged for the past 30-40 years.
I talk about that, and more, in this video.

Better Together

Today, you need to constantly evaluate your business health within an ever-changing business environment. When you are part of a trusted network you develop a great advantage by building your business through referrals. While your competition relies only on increased advertising to generate growth, you have a powerful network to help you through the unpredictability of today’s world.
Your business network is your business advantage.

Today more than ever you need your network because your network can help you through the most difficult times. Referrals are the engine that drives any business and through consistent business networking, you can harness the power of referrals. Remember, we are all better together.

I invite you to share your thoughts about Predictable Unpredictability.

 

Competing in the New World of Workstring(34) "Competing in the New World of Work"

My friends, Kian Gohan and Keith Ferrazzi, have written a new book and they have given me permission to excerpt it here as a blog. I invite you to read this excerpt from their book, “Competing in the New World of Work: How Radical Adaptability Separates the Best from the Rest.”

Beyond large Fortune 1000 enterprises like Domino’s Pizza and NOV, consider how smaller organizations in different industries have also leveraged new technologies to evolve their businesses. Founded in 1985 by Dr. Ivan Misner, BNI is a business referral network for executives, entrepreneurs and small business owners. BNI has over 10,000 chapters and more than 280,000 members worldwide. Every week, BNI chapters meet over breakfast to conduct a standardized networking exercise focused on targeted referrals. Members stand up and have 30 seconds to introduce themselves and their work. After self-introductions, members stand up again and individually offer three specific referrals in their personal networks that might be potential client leads for other chapter members. 

These aren’t just casual referrals. BNI members develop deep social capital with each other, and believe that both parties benefit when they refer their personal social networks to other BNI members. They call this core value “Givers Gain.” And indeed, in 2020 BNI passed 11.5 million referrals to their members, generating over $16 billion worth of business for members. That’s more than twice the GDP of the country of Lichtenstein!

In 2018, Dr. Ivan Misner suggested to the company’s board of directors that he believed the future of face-to-face networking is online, and that unless BNI experimented and adopted new technologies like mixed reality, holographic presence, and video communication channels, BNI would be negatively disrupted in its next decade. He was prescient and foresaw the rise of remote work, even before the pandemic. By March 2020, all 10,000 BNI chapters had pivoted to online networking – a dramatic business shift for an organization with a 3-decade history dedicated to in-person business networking. Fast-forward to mid-2021, and BNI added 500 new chapters during the pandemic year, all of which have only ever met online! Thus confirming Dr. Misner’s belief that every organization needs to adopt new technologies, or be disrupted.

Reprinted by permission of Harvard Business Review Press. Excerpted from Competing in the New World of Work: How Radical Adaptability Separates the Best from the Rest by Keith Ferrazzi, Kian Gohar, and Noel Weyrich. Copyright 2022 Ferrazzi Greenlight Inc. All rights reserved.

You are welcome to leave a comment and share the blog with others.
The book, “Competing in the New World of Work,” is available is here.

You’re Going to Need a Bigger Boat

You’re Going to Need a Bigger Boatstring(36) "You’re Going to Need a Bigger Boat"

In the 1975 hit movie “Jaws”, Martin Brody, the Police Chief of a small summer resort town in the northeastern United States, utters one of the most quotable lines in film history when he gets his first up-close look at the Great White Shark.  As soon as he sees it, he slowly backs into the wheelhouse and says to Captain Quint, “You’re going to need a bigger boat.”

This is the prototypical ‘Brody Moment’: a shockingly unambiguous realization that the current resources are no longer a viable option to achieve the results you’re looking for. 

I hope to explain how my Brody Moment came about.  However, the most important thing is for you to think about “your” Brody Moment as you read about mine.  Understanding your Brody Moment can help you think about your motivations and move forward successfully with your entrepreneurial endeavors.

My Brody Moment came at the end of 1985 after I had opened 20 chapters of BNI® by accident – without a plan, without even trying. That’s when I realized that I had struck a chord in the business community.

The “Why” for BNI

I was a management consultant in Southern California and I needed referrals for my consulting practice. I needed referrals for my own business, and I hoped that I would be able to refer some of my friends. So, I put together a group where we could start passing business to each other.

I had previously gone to networks that were incredibly mercenary, everyone was trying to sell to me. I went to other groups that were totally social, with happy hour and hors d’oeuvres, but there was no business happening at those events.

I wanted something that had a focus on business without being mercenary and was relational but not transactional; something that wasn’t totally social because I wanted that relationship-building aspect that led to business. Therefore, I created a network that I hoped would satisfy those two considerations. 

I wanted to merge that focus on business with the relational aspect, and the glue that would hold it together is the principal core value of Givers Gain® – the idea that if I help you and you help me, we will all benefit by working together.

That one networking group led to another and another until there were twenty chapters within 12 months! That first year, I was method-acting my way through the process; I was figuring it out as I went. I was young – 28 years old when I started the company, and I really thought most businesses had this figured out. The thing is, nobody had it figured out because we don’t teach business networking in colleges and universities anywhere in the world. What I didn’t expect to find was that everyone has this challenge and that was my Brody Moment.

BNI was an example of necessity being the mother of invention and it helped a lot of businesses. At the end of 1985, I figured out that I “was going to need a bigger boat”. This way of business networking was going to be much larger than I anticipated, so I sat down and created my business plan to scale the company.

A BIG Goal

In June of 1986, I had a goal in mind. I went to the library to gather information on populations. (Remember, at that time there was no such thing as Google.)
After extensive research and many calculations, I felt that BNI could have 10,000 chapters someday.

Shortly after that, I told a friend that I thought there could be 10,000 groups someday. And he said, “10,000?” I replied, “Yeah, I think it’s possible.”
Then he asked me, “And how many groups do you have now?”
I answered, “30.”
He said, “And you think you could have 10,000?”
“Yes, I think it’s possible,” I replied.
To which he said, “It’s good to have goals, Ivan.”

Yes, it was a big goal. And every year, near the end of December, I took time to reflect. I had read the E-Myth by Michael E. Gerber early on and used that as a baseline strategy. I looked at what was working well, and what didn’t work at all.
Each year, I adjusted my plan and revisited the small goals that were all striving toward that one big goal of scaling my company into a global enterprise.

In December 2020, we reached it – BNI had grown to more than 10,000 chapters! And we continue to grow, helping BNI members around the world do business through referral marketing.

As a leader, you’ve probably experienced a few Brody Moments over the course of your career, and you’ve probably got a few more coming. What you do as a result, and how fast you do it, can turn a Brody Moment into a defining moment.

Be Passionate, Not Pushy

Be Passionate, Not Pushystring(24) "Be Passionate, Not Pushy"

Passion and enthusiasm are key components for success in business, as well as for success in business networking. However, passionate people sometimes come across as being pushy, often because they truly believe that what they are offering to someone is really going to be beneficial for them. Their excitement to share the opportunity can be overwhelming, causing others to feel pressured. When people feel pushed or pressured, they are unable to fully hear the message.  

Our Intention

Our intention plays a huge part in how we speak and interact with others. If we don’t believe in the value of what we are offering, or we come from a place of desperation, our words will sound forced or salesy. When we come from a space of love – looking to impact lives, and service – adding value to others, there is more opportunity for the other person to understand our pure intention.

When I started BNI® in 1985, I opened 20 chapters in one year. I did it without any collateral marketing materials and without today’s technology. I did it with ONE sheet of paper and that was the one-page meeting agenda that I personally typed up.

I had one other extremely important thing. In addition to the one sheet of paper, I had passion. I was passionate about spreading the word of referral marketing and passionate about my intention to help more and more people succeed in their business. I was the poster child for “ignorance on fire is better than knowledge on ice!”

Inviting People to Your Networking Meeting

I have seen what happens when someone invites a guest to visit their BNI or other business networking meeting. People are so passionate, that sometimes others may feel it’s pushy, when in fact, the members are genuinely excited about inviting someone to meet their group.

When we are so enthusiastic that we say, “Hey, you have to come to this chapter, you have to come and meet this particular member!” we may go a bit overboard. When we say, “Hey, I would like to introduce you to a person that I think will be a good connection for your business,” the focus is on them. By clearly sharing our intention to connect them to a particular person that is going to benefit their business, our authentic desire to help is more clearly understood.

Speaking Their Language

It is important to meet people where they are. This is especially true when you are marketing or talking with potential customers and clients. They may not be emotionally, mentally, or even financially ready right now for your products or services. However, you can plant a seed for future harvest. This is in line with the philosophy of Givers Gain® – even if the person is not ready now, we leave them in a better place than before we met them. It can be with the benefit of knowledge we shared, or an offer to make a helpful introduction for them.

We can also connect with people on a deeper level when we understand and respect their motivation and their behavioral style. We must first understand our own style, then learn how to identify behavioral styles in others, and most importantly, adapt our approach to those different styles. This allows us to communicate more effectively because we are speaking their language.

Remember, how you communicate is important. When we talk about our business with enthusiasm and energy, backed by our intention to help others, our passion shines through.

We Can All Count on Changestring(26) "We Can All Count on Change"

Life and business are always changing. In fact, the one thing that we can all count on is change. Sometimes businesspeople are frustrated and angry with changes in their industry, or even in their community. Professionals who are part of a larger organization or company may be upset or confused by changes that are a natural part of the business cycle.

I would like to share some thoughts about this with you.

First, we usually don’t see behind the scenes. There is always another side to the story, and there are typically more facts and information than we are aware of that went into the decisions which resulted in the changes.

Some people say that they liked things the way they were. They say it before they have fully explored or tried the changes, often forgetting that “the way things were” was once something new, something that was also a change at one time.

Belief

Second, we must have belief. We have to believe in what we can do to help more people – more people in our local communities, and more people that we are connected to through our company or organization. 

John C. Maxwell says that leaders always put other people first. When we focus on our mission and our goal to help others with our products and services, we become successful leaders.

As leaders, it is imperative that we believe in the processes that we work within. We have to believe in what we do so that others can see and feel that belief… so they can be inspired by it. Inspired people motivate themselves and they also encourage others to perform at their highest potential, sharing their excitement and energy in their contributions to their work and throughout their lives.

Status Quo will Go

I understand that people like the contentment and the comfort that they feel with a successful status quo. However, a successful status quo is the present, which is built upon a strong past. A comfortable present right now does not mean that the present we experience next week or next year will be exactly the same. The changes that today brings can contribute to our future success.

We all know this at some level, and if we think about it, our daily lives are full of yesteryears’ changes that we now embrace. The telegram, telephone, pager, and the 2-pound mobile phone all were the status quo of their day, and now the majority of us rely on our smart phone, which itself was a major change and disruption to the industry.

Whether we like it or not, the future involves change. Today’s status quo will go, and the change will happen. We can choose to resist it or to embrace it. 

We can all count on change in our lives.
Consider this: Is complaining about a change that is already in place going to help your customers and clients? Is it going to help you achieve greater success? My advice is focus on your own company, your team, your department, your own actions. You’ll do well if you do that.

Subscription Revenue for Your Business

Subscription Revenue for Your Businessstring(38) "Subscription Revenue for Your Business"

I have known Robert Skrob for several years; he is one of my co-authors of the book, The Connector Effect: The Proven Way to Grow Your Business Right Now.

Robert is the #1 authority in subscription revenue growth, and I talked with him about how small businesses can expand their revenue exponentially through subscriptions. He shared information from his recent book, The 9 Proven Models for Exponential Subscription Growth.

Today’s customers are increasingly looking for subscription offers and are more amenable to buying a subscription to a restaurant, to a professional service, or other companies that they use and frequent.

Robert says that this can be a lucrative opportunity for small businesses. Rather than getting a customer one time with a single transaction, they can get a customer that purchases a preapproved series of transactions.

Many businesses don’t think of themselves as having the opportunity to do a subscription model. However, most businesses DO have that ability. Yes, there are a lot of large companies offering subscriptions – think of Costco and Netflix. If we look a little closer, we find that small businesses everywhere also offer them.

Examples of Successful Subscriptions

Many businesses use a VIP model. A restaurant can offer a benefit for VIP members or subscribers to go to the restaurant during certain hours available only to them or to have exclusive VIP access to certain tables while other customers have to wait in line.

A pre-approved supplier business that provides goods or services can invite clients to have a subscription. You may have heard of Dollar Shave Club; they were able to completely disrupt the razor business by providing razors for significantly less cost to consumers. This worked without a distribution system as they were going direct to their customer. Additionally, because they used a subscription model where their customer had pre-approved several orders and thus had a higher lifetime value, Dollar Shave Club was able to disrupt an entire industry.

I realize that there are some businesses that might say, “Well, I don’t see how I could have a subscription.” I asked Robert about the types of businesses that could have the opportunity to do a subscription model.

He said that quite a few businesses already do – from landscaping to pest control, they are already a regular service that people subscribe to. There are some Certified Public Accountants (CPA) that have an audit defense subscription. The client pays an annual fee and if they are ever audited, the CPA firm will come to their defense.

A home roofing company can have an annual gutter cleaning service, sold together with a new roof purchase, or as a stand-alone item. Heating/air conditioning businesses and plumbing businesses offer a type of subscription program. When they go to a home and give an estimate, they say, “It’s this price to do the repair. Or if you would like to become one of our members? You can enjoy the member discount on this repair, and it also entitles you to these additional benefits.”

I personally enjoy membership for this type of service. I have a subscription with an AC and plumbing company that comes to my home every three months and checks my air conditioning units and my plumbing to make sure everything is working well. I appreciate that the company automatically schedules the appointments, and I don’t have to keep track of when it next needs to be done. It also builds customer loyalty. I am not going to call anyone else if something happens between the quarterly visits.

Going Beyond Products and Services

In many businesses, the customer is buying services, or they are buying an item. Whereas with membership, clients are buying a type of promise that they’re going to be connected. For many companies, subscriptions add another revenue stream that doesn’t cost them money to fulfill. It can be a very high margin revenue stream with a large impact on customer value.

Robert says the biggest difference between successful subscription businesses and unsuccessful ones is that their 4 Subscription Growth Drivers work together and are appropriate for their specific subscription model. Each of the nine models is unique and has its own way of attracting subscribers by demonstrating value. Subsequently, the 4 growth drivers, which include pricing and retention, are customized for each model, as he clearly explains in his book, which I recommend.

Many businesses don’t think of themselves as having the opportunity to do a subscription model. However, most businesses DO have that ability. Yes, there are a lot of large companies offering subscriptions – think of Costco and Netflix. If we look a little closer, we find that small businesses everywhere also offer them.

Consider your business – is there a way to reward your most reliable clients with an opportunity to upgrade to VIP status, or to invite your customers to pre-order and receive a regular delivery of pre-approved goods? There is ample consumer convenience in a subscription model and if you are the company that makes people’s lives easier, you can increase their loyalty and longevity.

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