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I read a great article on marketing for small business owners the other day which got me to wondering.  The author did a really good job providing practical advice on gaining attention and getting prospects to take action.  However, in the teaser for the article, he felt compelled to state that business owners were fooling themselves if they relied on building their business through referral.  Referrals were unpredictable and inconsistent.  I thought his advice was valuable enough without diminishing the value of referrals. 

Which led me to the recent battle that erupted amongst a small group of friends who share articles and insights through email.  Seems a difference of opinion occurred and someone had to win and someone had to lose.  Of course, this “Us vs. Them”, winners and losers philosophy overwhelms the political world, radio and television news, and talk radio.  No discussion anymore; just rebut and refute whatever the other guy is saying, regardless of merit.  Just look for any way to attack them: misused word, misplaced comma, minor factual error. 

So all this animosity and adversarial activity got me to thinking about how we perceive our business competition.  Being in the world of small business, we are very close to customers and competitors.  And if your market is “anyone who…”, then you probably feel like you have a lot of competition.  So in order for you to get business, people must recognize your worth and the shortcomings of your competition, right?  But your value is not valuable to everybody. 

Thus the importance of clearly defining your target market.  Taking the time to do so is essential in helping you determine your value (your USP.)  How do you differentiate your product and yourself from the competition? 

But beyond differentiation, another value of knowing your competition is in identifying how you might be able to work together with them.  My friend, Carol Shepherd, likes to talk about “coopitition.”  Identifying what you do well and areas of strength and weakness in your competitors may offer opportunities for you to gain business from those that appear to be competitors.  This opportunity may result from a specialty, qualifications, geography/location, capacity, or a host of other differences.  A small IT outsource firm I know grew their business by sub contracting out jobs to competitors until they had the capacity to do them themselves.  They hired engineers only after obtaining enough new business to consistently employ an addition to their staff.    

Taking a close look at your competition can be helpful to your business in a number of ways.  Do you know your competition?    

Just back from a week in New Orleans. The City has pretty well lost its collective mind…but in a good way. This coming Tuesday is Mardi Gras. Last Tuesday was Lombardi Gras. And the parade was, by all estimates, larger than any Mardi Gras parade; 800,000 in a city of less than 500,000. Businesses set the holiday watch on Monday and Tuesday. And wherever you went, the uniform of the day was Black and Gold and the greeting of the day was “Who Dat!” Seems like they will never tire of saying that with all that it implies.

And what it implies is that a city, once the center of commerce in the South that had been left behind by her sisters in Georgia, Florida, and Texas; a city that had become a cliché as a “Third World Country” with the highest murder rate in the U.S.; a city with a joke of an public educational system and local government; a city that was dealt a near death blow less than 5 years ago; and a city clinging to its NFL team that spawned fans so ashamed they wore paper bags on their heads and dubbed the team “The Ain’ts”, is claiming respect.

This Super Bowl victory comes at an auspicious moment in the history of New Orleans. Recovery is strong, to the extent that they experience one of the lowest unemployment rates in the country, a growing economy, a wild west entrepreneurial atmosphere, a resurgent school system and neighborhood spirit, and most importantly, an election that truly is “Change”. New Orleans has been named in a number of national publications as one of the best places to start a new business and, surprisingly, one of the best places to live. Much of the old guard that helped to build a reputation of Banana Republic governance is now looking for work and a new krewe of young, progressive leadership is taking the helm.

And there’s the Saints, the eye of the storm. All that is positive in the city is encapsulated in their story. The metaphors are abundant. Cast offs and the unheralded, the new and untested, the old and forgotten, brought together and formed into a team that surprised all but the most stalwart of the Who Dat Nation. They were resilient and relentless. They were bold and innovative. They were inclusive and made the most of their assets. They are a team that truly represents all of a city that deserves a place in the hearts of Americans, as a part of our American story.

So even if you are a Vikings fan, part of the Cardinal faithful, or avid follower of the Colts, celebrate with a City that is being reborn and taking its place, once again, as one of our great American Cities.

If there is one lesson we all should have learned over the past year or two, it is that the world is not what it used to be. The pace of change accelerates constantly. In our fathers’ times, businesses could come up with a model and stick with it for a long time. “If it ain’t broke, don’t fix it.” “Dance with the one what brung ya.” Good advice when the environment is static for extended periods of time.

However, as we have seen, things are changing rapidly. For anyone who hadn’t accepted that, 2009 had to have been a rude awakening. Today’s great idea may be a phenomenal innovation. But with today’s open source reality, lots of bright people are moving the ball forward quickly. If your forward thinking extends only to the end of the block, you’re in trouble.

What does that mean for us small business types, immersed in the day-to-day chaos of getting the job done? How do we fit strategic planning (Yoicks!!!) into our day?

This is a great place for me to offer a business coach as the solution. And while that may be one of the solutions, networking is another. When we think of networking, we think of referral networks. But there are two others, as defined by Ivan Misner (Business By Referral): Information Networks and Support Networks.

Information Networks are those sources we turn to that help us with the technical aspects of our work and business. They are the professional associations we belong to, the mentor we have, our friend the CPA, the maven (a la The Tipping Point) we drink beer with. These folks help us keep pace with the broad range of information required in order for us do business.

Support networks are made up of people who have an interest in us and our success. They are there when we need them for moral support and encouragement, maybe to jump in at a time of need, or to just generally be there for us. They celebrate with us and help us to keep going when things are tough.

So where do you find these other networks?

I belong to a mastermind group and am fortunate to have a number of business coaches and consultants as friends and acquaintances. I read daily, both history and the current news. A lot of my social conversation is in the realm of the strategic. That is important because in your business the day-to-day pull is to the tactical. Tactics are the ways we go about doing our work; the processes and systems we follow. Generally, strategy is “the carefully devised plan of action that guides us in the achievement of our long term goals.” In biology, strategy is “a behavior, structure, or other adaptation that improves viability.” Hmmm. That sounds necessary if we want to stay in business.

So looking ahead, as we all do at this time of year, what do we see? Is the terrain changing? Will your business remain as it is, or are there changes that you can see coming? And how about the ones you can’t see?

Lots of discussion these days on government cutbacks, both federal and local, in social services. The nonprofit world is buzzing with reports of the hardships being faced by local providers. As government cuts back on services, those in need must turn to the nonprofit community to take up the slack. And of course, with corporate and individual giving down, as well as revenues from endowments down significantly, local nonprofit providers are suffering their own trials. Ripples from the down-turn are still visible on the pond. Being involved in the management of a nonprofit, I see and feel all this directly and regularly.

At the B2B Luncheon last Wednesday we touched on this subject. Toward the end of lunch we have those attending stand and identify themselves. No elevator speeches, 10-30-or 60 second speils, just and introduction so that everyone knows who is in the room. As part of the introduction, we ask everyone to give us some personal information about themselves such as the last movie they saw or the book they are currnetly reading (or the last one they read.) Keeping with the spirit of the season last week, I asked everyone to tell us what they do to “give back” to their community. I can say that I was truly impressed and proud to be a part of this group based on the responses I heard. Seems our community of small business owners and sales people are really socially responsible, heavily involved in a broad spectrum of charitable and service work.

I spoke briefly about the importance of a strong small business community to the strength of the economy in general, as well as to the strength of the local community. How connected are you to the place you live and work? Are you in business just to “become fabulously wealthy, beyond your wildest dreams”? Or are you in business to serve your family and to contribute to the welfare of others (as well as become fabulously wealthy beyond your wildest dreams)? The answers to these questions can help you as you build a business rather than just have a job.

I’ve attended many sales training programs and one of the topics that always comes up is asking for referrals. I once had a manager who prided himself on his expertise in building business by referral. Every week he would run us new guys through a drill which consisted of a number of questions: How many appointments did you have? How many people did you see? How many times did you ask for referrals? How many referrals did you get? There were some other questions such as, “How many note cards did you get signed?” But I won’t get into that right now. I used to call this the Sales Manager’s Name Extraction Program. It was less about getting referrals and more about getting names.

While the Name Extraction method may work, it is not much more fun than Cold Calling. Everyone feels a little uncomfortable and it certainly is NOT a relationship building exercise with your client or prospect.

In an article, Paula Frazier states that there are three main reasons people don’t get the quantity or quality of referrals they want:

1) They don’t ask.
2) They ask at the wrong time.
3) They ask the wrong people.

I’ll talk about number 3), Asking the wrong people, another time. Let’s talk about numbers 1) and 2).

Asking is important, but asking in the wrong way, asking at the wrong time, or asking the wrong people can lead to unsatisfying results. Before I ask for a referral I always ask myself if I deserve one. What have I done that will make the referral source feel good about introducing me to a trusted friend or colleague? Have I built credibility and trust? Build the relationship so that the idea of them referring you is a natural result, something they want to do. With many people, asking the for referrals before you’ve built a relationship is off-putting and can damage the relationship.

So when do you ask for referrals and how do you ask? What makes you feel like it’s the right time and that you deserve the trust and support of your referral source?

State Dept. Asked Site to Keep Running
According to a recent Washington Post article, the State Department asked social-networking site Twitter to delay scheduled maintenance earlier this week to avoid disrupting communications among tech-savvy Iranian citizens as they took to the streets to protest Friday’s reelection of President Mahmoud Ahmadinejad.

and

“Iran is not the only global hot spot where the State Department has taken an interest in Twitter, nor even the first. For months it has been working to deploy the short-messaging service to Iraq and Afghanistan, part of a broader plan to leverage U.S. technology companies’ connections with youth as a diplomatic tool.” BusinessWeek June 18, 2009

These are remarkable times we live in. We have access to many powerful communications tools that are radically changing our world…every day. My friend Gordon Rude said to me recently, “Almost everything we do will be changed in 10 years.” That’s amazing, and not hard to imagine. Think about the changes we’ve experienced over the past 10 years.

Many of us are resistant to change. Conservatism is a natural human response. In the extreme, change can be terrifying and exhausting. At the least, it is unsettling.

Business is changing. New products and services come at us in waves. And marketing messages are being delivered in new and innovative ways. About the time you feel good about a new technology, it is surpassed by something new.

So, what are you doing to stay abreast with this torrent of change and innovation? Have you seriously considered new technologies in marketing your business? Or are you just dismissing Twitter, Linked In, Facebook, videos, blogs, and the other “force multipliers” that are available to you?

I’m an amateur at all this stuff but it is helpful for me to read and discuss what’s going on. Are you engaged in discussion with others about what they are doing? Are you asking questions? There’s a lot to know and sharing knowledge is the only hope for keeping up. Find a way to do that.

They’re tweeting from the streets of Tehran. There’s a message there.

Lately, I have been in a few discussions about “networking”, what it means, what works, and what does not work so well.  Seems like every event, political, social, business or otherwise is a must-do because of the great networking opportunity.  Makes me wonder what this networking thing is all about.  We used to get together on occasion for the purpose of just getting together.  Of course, we “networked” in the sense that we developed relationships by spending time together and learning more about each other. 

It seems to me that “networking” has run amuck, gone wild, is out of control, taking on a life and purpose of its own.  We’ve got to attend all these events because they are networking opportunities and you can’t afford to miss one of those now, can you? 

Which brings me to the thought of broad vs. deep in building your network.  Broad is good, even necessary but deep is better. 

I know that broad vs. deep can spark great discussions, with the deep thinkers coming down on both sides of the fence.  Creating a diverse network gives access to a wide range of contacts, both numerically as well and from the perspective of variety.  This is good but not entirely for the reason we think: getting referrals for us.  While there are a number of things that can result from wild networking (spaghetti-on-the-wall theory), it is random and not a good use of your time.  And it doesn’t necessarily work well in getting to your target market.  However, broad may be  valuable as a way of developing referrals for your referral partners.  Some people are good at broad and that is why you want them in your well-rounded network. Remember Gladwell’s Connectors.

But to me deep deserves more attention.  Barring the person locked in their office all day, most business people get out reasonably enough and know enough people to be valuable referral partners.  If fact, they may know all the people you’d  ever need to keep you in business for years.  But we’re not tapping into that resource because we are not purposeful in our networking as a tool to building referral relationships. 

I’d like to hear a bit about “broad vs. deep”  and  your take on networking as we know it today.   

Two weeks ago I was at the Referral Institute International Coneference in Scottsdale, AZ.  It occurs to me that in addition to learning new stuff, revisiting stuff I already knew, and get motivated and re-energized, I also had a plain old good time.  Who doesn’t like to travel, hang out with old friends, and relax a bit?  Especially in a beautiful part of our great country.  And to do it AND make an investment in my personal and professional development is a real bonus.

I work with business owners and observe a reluctance in that community to invest in themselves.  Most do not have a budget of time and money for reading, seminars, and conferences.  We’re always too busy and have too many other projects to spend our money on. 

There’s really little need for a diatribe here.  We all pretty well know it’s wise to learn, get inspired, and associate with people in our business or similar circumstance.  So, it’s still early in the year.  Check your budget and calendar for opportunities to make that investment. 

I need to sit down and share a few of the ideas I picked up at the conference.  There were 21 authors on the topic of referral marketing and sales in attendance.  Think there was any hot scoop being passed?

Last month’s question asked “Do you have a marketing budget?”  Over 60% answered that they did.  That’s good news.  Having a plan is an important first step to achieving your goals.   Reviewing your plan and making sure you are following it is the challenge.  What kind of accountability process do you use?  do you have a peer coach, a business coach, or do you track results regularly through a budget or tracking sheet?  What works for you? 

Are you in the 60% or the 40%? 

In some networking circles you hear a lot about doing one-on-one meetings.  This is a great way to get to know more about potential referral sources.  However, many people don’t have a plan for what happens after that first get-to-know-you meeting.  Having a plan for discovering and “vetting” referral partners can save a lot of time and disappointment. 

In the first meeting your purpose is to get to know the other person and discover whether there may be opportunity to advance to relationship to a closer collaboration for business development.  Some people use a simple acronym to help guide the discussion such as GAINS (Goals, Accomplishments, Interests, Networks, and Skills) or FORD (Family, Organizations, Recreation, Dreams.)  

At some point you may discover that you can help each other and working together would be helpful to you both.  This requires a degree of trust to the point that you can easily recommend your new referral partner to your clients, customers, friends, and family.  At this point you may want to meet to discuss Target Markets. You can begin with examining who your current clients or customers are and if they would make good prospects for your referral partner.  Remember, it is important to have a strong relationship before you ask for their trust with their clients, family and friends.   In this meeting you will discuss your target market, key issues that your product or service addresses, needed collateral material, and your client list.  

Once you have identified prospects, it is important to discuss the process you will follow to prepare for the initial meeting with the prospect and to make the introduction.  This might be a simple phone or email introduction or, for higher value prospects, a personal introduction and getting-to-know you process.  Some of the information you’ll want to share is the behavioral style (personality) of the prospect, of you, and of your referral source?  What approach would be most comfortable for all parties?  You’ll want to come up with a comprehensive list of information that will help to increase the chance for success with the prospect. 

Again, based on personal styles, what is the best method to make the introduction?  For the more cautious, detail oriented, providing them information such as promotional material, company background, or testimonials before the initial meeting may be necessary.  You will want to develop a referral process with your referral partner that you are both comfortable with and that suits the needs of your prospects.  Making the first contact is NOT  about closing the sale; the first contact will most likely be about building the relationship.     

Follow up:  Often, after the initial meeting and throughout the sales process, your referral partner can assist in closing the deal by staying in touch with you and the prospect.  They can provide you feedback because of their relationship that you might not be able to obtain.  They can help you anticipate prospect needs before they become an issue. 

Meeting and getting to know new people is fun.  However, if you are trying to develop business through building relationships, it’s best to have a plan.  You’ll need to meet often with your key referral partners to get to know them and their needs, identify referral opportunities, gather information about prospects, strategize on how best to make the referral, and find ways your referral partner can help you such as by providing information to the prospect, giving their personal involvement, and their follow-up.