Are You Referral Ready?

Archive for the ‘Connecting with Your Customers’ Category

My friend Jack owns and operates a successful disc jockey company called Night Magic Entertainment. He employs more than 30 deejays and works several events each month himself. He is the type of person that everybody likes, whose personality wins friends wherever he goes. It doesn’t hurt that he is very good at what he does, but you get the sense that his personality would work to his advantage whether he was playing the Hokey Pokey or selling hot dogs from a street cart.

Jack was caught by surprise when the owner of a competing company called and asked if Jack wanted to buy his business. “Let me talk it over with my wife and I’ll get back to you,” Jack said, with absolutely no intention of ever calling the guy back. After all, why would he spend money to make the competition go away if it was heading that way on its own? So he did nothing.

Until the competition called him back. “I don’t think you understand, Jack” said the owner. “I don’t want to sell my company to just anybody. You run a great company. I have jobs booked for the next 10 months, and I don’t know anyone who can take care of my clients the way you would. You can have all of my bookings, all of my equipment, the company name…everything. Please reconsider this opportunity. At the price I want, you are almost guaranteed to make your investment back in the first year.”

Jack bought the company and expanded his market share overnight, essentially absorbing a percentage of clients who chose his lower-priced competition in the first place. These types of business deals take place all the time.

But how many times does the competition call not once, but twice, to single out who they think should buy the company? If your competition was going out of business, would they call you? Would it be worth your while to call back?

It turns out they weren’t exactly friends, but Jack had a working relationship with this guy. Jack’s company charged about $200 more per gig, at the high end of the scale. So they were competitors only in the sense that fillet mignon competes with White Castle for beef market share. They key was that they had a relationship.

Jack would be the first one to tell you that one of his secrets to success is to make friends with your so-called competitors. “We’re all in the same business, but we all do things a little differently. Some have travel restrictions, and some only do weddings. Sometimes a prospective client will request a date that I have completely booked, so I like to be able to refer them to people who might be able to help them out even though I can’t.”

Jack’s friend Theresa, a videographer, understands this as well. She stood up in front of a group of business people and specifically requested an introduction to another videographer. Theresa and her husband have the manpower to handle 8-10 events per month, which are often booked well in advance. If a prospective client asks for a date that is already booked, she can now refer them to a so-called “competitor” because they have developed a mutually beneficial working relationship. Referrals now go both ways, thanks to her initiative in reaching out to a competitor.

Jack and Theresa are not much different from the rest of us in terms of their professionalism and dedication to their respective crafts. But they made strategic relationships on purpose, deliberately seeking people out to serve prospective clients regardless of whether they got anything in return. The great irony is that they both continue to reap the long-term benefits of such decisions.

Harry Beckwith, author of “Selling the Invisible“, says that “your greatest competition is not your competition. It is indifference.” He was referring to the fact that customers have many choices where to buy, and that our challenge is to break through by speaking the language of our customers if we want to be successful. But our indifference extends to the way we build relationships, and ultimately the way we position our business to serve the clients we are lucky enough to get.

Beckwith tells a great story about a woman who was strolling along a street in Paris when she spotted Picasso sketching at a sidewalk café. The woman asked Picasso if he might sketch her and charge accordingly. Picasso obliged, and in just a few minutes, she stared at her original Picasso. “And what do I owe you?” she asked. “Five thousand francs,” he answered. “But it only took you three minutes,” she politely reminded him. “No,” Picasso said. “It took me all my life.”

If you are smart enough to charge by the years instead of the hours, you begin to differentiate yourself from the so-called “competition” who sells on price or turnaround time or both. It turns out they are not really your competition after all. My friend Jack knew that the guy selling services for $200 less was going to get his share of business. He also knew there was enough business to go around for both of them, and could think of no reason why a professional relationship should be avoided. As it turns out, Jack was building a bridge to his future.  No one said building bridges to the future was easy, but it is worth it. Think of it as the “work” part of networking.

If my marketing efforts drive undesirable clients to my business, I have a choice to make: change my marketing strategy, or surround myself with people who can make servicing those clients more enjoyable. In the end it also becomes more profitable to refer or turn those clients away because it frees up more time for the business activities I enjoy most.

Networking strategically is a way to fill your professional blind spots. The question, “Do you know your competition?” should probably read “Do you know your competition on a first-name basis, well enough to sit down and have coffee or a phone conversation with about how you can work together to better serve more people?” It might be a conversation worth having.

Selling your strengths to buy your weaknesses is an activity that any small business owner can benefit from.