Are You Referral Ready?

Surely there is something beneficial about being in relationship with you that goes beyond a financial or business transaction. Your referral sources place value in those benefits. They accumulate over time and contribute to the depth and overall health of the relationship. As a result of the benefits you offer your referral sources, how motivated are they to refer you more business?

Reduced to transactional terms, a referral relationship can still serve both parties. But the human factor is what makes me choose you over another referral partner, and you can figure every one of your referral sources has the option to feed another business besides yours. It is their relationship with YOU that makes the difference. Strengthen the relationship and the rest happens naturally.

How you can show your referral sources–the people who are already inclined to refer business to you–the benefits of being in relationship with you? Could you introduce people in their company to influential people in your network? Could you help them secure a new vendor? Could you help them close a deal based on your recommendation or testimonial? Could you attend a trade show or function they were hosting? Try to come up with things you can do for each referral source that adds value to the relationship itself.

Sales people are attracted to compensation systems that offer both cash and benefits. Your referral sources are your sales people. They value their relationship with you, and the benefits of that extend beyond the last referral or the next referral. Perhaps in between is your best opportunity to demonstrate to your referral sources the real benefits of working so diligently on your behalf.

Perhaps the greatest challenge is positioning your business to stand out among the competition in a way that attracts customers and word of mouth referrals. The core of that challenge is your ability to answer the question ‘Why should I do business with you as opposed to the other companies that say they offer the same thing?’

Now more than ever, consumers have choices. Without a compelling reason to do business with you, consumers are bombarded with reasons to consider their alternatives. Either you find a way to stand out, or you become invisible.

Write down three reasons why people should choose your product or service over the competition. If you can’t define your uniqueness in the market, you can’t talk about it and you can’t expect others to talk about it either. If necessary, ask a few past customers why they chose you over someone else. The answers might surprise you.

Referrals travel faster via word of mouth when they have what is called a stickiness’ factor. Your USP (unique selling proposition) is exactly the kind of stickiness that gets and keeps people talking about your business. Customers have a way of seeing past catchy slogans and half-baked promises. Knowing that the value you deliver is unlike any other competitor attracts customers who will surely share the experience with others.

It’s not who you know or who knows you that makes the real difference. It’s how well you know the people in your network. This means it is important to have a mechanism for advancing and adding depth to your most important relationships.

Relationships take time to develop. What you do with that time is the difference between activity and results, between visibility and profitability, between a network of acquaintances and a team of referral sources. Left to chance, this process is called ‘net-hoping.’ Hope is not an effective business strategy.

Schedule time to meet one-on-one this week with two people whose relationships you particularly value. Make it a point to learn something new about that person, and take interest in their goals, accomplishments, skills, and networking activities.

Find a way to help that person tackle a tough business issue. Discuss ways in which you can both proactively refer business to one another.

Meeting one-on-one is a great tool to keep in mind for advancing relationships. Without adding anyone new to your network this week, you can increase your referral readiness by taking the time to learn more about the people you already know.

The return on your time investment in other people can only be as strong as the depth you are willing to achieve.

Failing to plan is planning to fail. …you’ve heard that before, but it applies to networking as well. There are many different networking groups and activities to choose from. The best ones for you are the ones that are in alignment with your goals.

People who network without a plan can still get positive results, but those results are random, finite, and impossible to plan for. Referral Ready means taking responsibility for achieving your goals and making strategic choices about what it takes to get there.

Make a list of networking organizations that might interest you. Include a healthy mix of social, business, and community service groups and professional associations. From that list, explore the possibility of joining two or three different kinds of groups.

Just as an investment broker might advise you to diversify your financial portfolio, a networking plan that consists of different types of organizations will strengthen your social capital. Choose wisely, and get involved based on where your skills, interests, and goals intersect.

A win against the New York Jets this weekend means another trip to the Super Bowl for the Indianapolis Colts. Led by four-time MVP quarterback Peyton Manning, the Colts remember losing to the Jets just a few weeks ago in a game that featured a second-string cast of Colts and ended their bid for an undefeated season.

In an AP story today, Manning was quoted as saying “I think everybody realizes the opportunity and what’s at stake. That’s why I think everybody wants to have a good week of preparation, to put ourselves in the best position on Sunday.”

Imagine that. Putting all those hours of preparation into a game that will last only 60 minutes this Sunday. Film study, strategy sessions, on-field drills, play selection meetings, more drills. When the average fan watches his/her beloved Colts on Sunday, the execution (or lack thereof) is all they will see.

But should the favored Colts move on to the Super Bowl, the players will use cliches and sports jargon and fancy phrases to describe between the lines the relationship between their preparation and the final score. Joe Q. Fan will marvel at the highlights on ESPN, but the players will know the real reward came from the work they put in long before the game ever started, the plays they practiced 25 times on Tuesday and 25 more on Thursday, the extra reps in the weight room, the extra hour of film study that revealed how one player always leaned to the left when they ran to the right.

And should the businessman significantly increase his referral business in 2010, he knows it will be the natural result of preparation that put him in the best position to be successful. Opportunity + the right preparation = winning results.  And it should come as no surprise that that formula applies to sports, education, referrals, or life.

Are you Referral Ready?

Unlike perhaps a career sales professional, your best referral sources are probably motivated enough to sell your products and services on essentially a volunteer basis. Why? Because by servicing the people they refer, you make your referral partners look good in the process.

Whether a commission is earned or not is irrelevant. You have a sales force to manage. Don’t let mutual admiration get in the way of a smart compensation package. Just because your referral sources are volunteers, don’t think for a second they don’t appreciate being compensated. Maybe, just maybe, they’d appreciate referrals from you as well.

Have you “paid” your referral partners lately? Are referrals flowing only one way? Based on how you “compensate” your referral partners, how motivated are they to bring you more referrals?

Unless you can feed the relationship with your referral partners, it is not likely to support you or your business over the long term. There are many ways to feed a relationship, but reciprocating with good referrals models the behavior you are trying to encourage and creates a cycle of goodwill.

Think for a moment specifically about the three people you consider your strongest and most valuable referral sources. Ask yourself these questions:

• Have you “paid” them in the last 30-60 days? If not, how realistic is it to believe they are working hard for you?

• Do you pay extra to those who generate the best results? If not, what motivates them to continue performing at such a high level?

As the manager of a volunteer sales force, evaluate your own compensation system. Like any sales manager, your challenge is to build and motivate your team. The goal is never to accumulate as many referral sources as possible. The goal is to maximize the number of referral sources that you can feed, support, and manage. This takes effort on your part.

Feeding your referral sources is an investment strategy. Invest wisely, and you’ll find that the best fuel for reciprocity is a commitment to relationships that benefit all parties.

The most common networking question is “What do      you do?” You WILL be asked that question more than once in your life. And when you are, how will you respond?

The way you answer that question can make a difference between making a good impression and making no impression at all, between being common and being uncommon, between being memorable and being forgettable.

When we answer that question with our profession (”I’m an attorney” or “I’m an accountant”), we lose an opportunity to make a connection that markets our business and creates a more lasting impression. If the goal is to stand out, answering in a way that lumps you in with every other attorney or accountant is not the way to do it.

How would you complete this phrase:

“I help people/companies ________”. Before you do, think about how a customer might fill in the blank for you. If the essence of marketing is  capturing the voice of the customer, you actually create a marketing opportunity every time you answer this question with that in mind.

Don’t be afraid to be provocative. For example, a realtor might say “I help people turn houses into homes”. A mortgage lender might say “I help people buy the American dream”. This is effective because answers like that compel other people to ask “And just how exactly do you do that?”, which means 1) they are engaged in your message, and 2) they are inviting you to continue the conversation.

Preparing and practicing your answer to the most common networking question is a fundamental Referral Ready conversational skill. In the process, you will learn to stand out and communicate value as perceived through the eyes of your customer.

You are at a networking function and someone asks you, “What kind of business are you looking for?” Referral Ready means not only having an answer, but having the best answer available at any given time. The question is a perfect opportunity to describe your ideal referral.

Not everybody is interested in helping you. People who don’t know you well enough might hesitate before referring you to someone they know. But other people can’t help you if you don’t know what you want. To the extent that you do, you never know what can happen. Rather than lose the opportunity, it is better to prepare to be successful.

Can you describe in detail an ideal referral for your business? Whether it is the name of a person (John Smith), the name of a business (XYZ Company), or a description of a specific type of customer (people who travel frequently), create a wish list of ideal referrals before attending your next networking event.

You never know who will ask or be able to serve as a resource for you. And you may never find out until you think about what you want and find a way to pass that information to your network.

Keep this question in your arsenal:  “How would I recognize a great referral opportunity for you?” Use it liberally.  Most people won’t have a great answer, some won’t engage at all, some will. But many will RECIPROCATE, which is precisely what you want…assuming you are prepared.

When you take a moment to think strategically about your business in these terms, you take responsibility for something most other forms of advertising simply can not deliver–choosing your next client.

Plaxo, Facebook, LinkedIn, MySpace, and Ecademy are just a few online social networking sites that allow users to connect with each other around the world.

LinkedIn is the #1 business networking site with 15 million active users. MySpace reaches 39% of all adults, and Facebook has the fastest-growing demographic in the 25+ age group with 30 million active users and 350 million users overall. Because the online landscape changes so rapidly, these numbers are bound to be obsolete by the time you read this.

Social networking will never replace what you can do face-to-face, but it can extend your networking capabilities to a degree never before imagined. Without it, your networking activity will never be operating at full capacity.

Review some of the sites mentioned above or ask around to find out which ones people are using. Sign up this week for at least one site, adding your profile and contact information to facilitate discussion with other people or online communities. Like any networking strategy, involvement is what drives results. Rather than spread your time and energy across several sites, choose one and become a fluent and diligent user.

Whether you are networking for referrals, a job, a new recipe, or a strategic alliance in another country, social networking sites can help you cross geographic and cultural boundaries with the click of a mouse.

Networking will always involve human skills that can not be automated, but a networking professional in today’s electronic age should have at least one online resource in the tool kit.

In the music industry, platinum status is reserved for those songs or albums that generate 1,000,000 sales or downloads. Gold status, on the other hand, designates sales or downloads of only 500,000 units. Guess which one allows the artist to make more money?

The golden rule says ‘treat others the way YOU want to be treated.’  According to Tony Alessandra, the platinum rule says ‘treat others the way THEY want to be treated.’ Because referrals require the transfer of trust, the platinum rule is preferable because it facilitates a stronger level of connection.

People respond differently to the importance of money, public recognition, or gifts. Your ability to connect with the people in your network is directly related to how well you know what motivates them. The golden rule will help you roughly 25% of the time. The platinum rule works 100% of the time because it is ‘other’ oriented instead of ’self’ oriented.

What are some things you can do RIGHT NOW to demonstrate the platinum rule with, say, three people in your network? Over the next week, follow through with the things on your list. A struggle to connect with people on their terms indicates a lack of depth in your relationships.

More than what you do or say, people value how you make them FEEL. To make stronger and more lasting impressions with everyone in your network, apply the platinum rule liberally. There is more money to be made in platinum than gold.

John Suarez

Chief Education Officer

Referral Ready, LLC

jsuarez@referralready.com