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“The conventional definition (of business): “an organization that makes a profit,” says (Peter) Drucker, “is not just wrong but irrelevant. Profit-making is not the purpose of management decisions, but a test of whether they work.” “There is only one valid definition of business purpose – namely to create a customer.” “The result of a business is a satisfied customer.”

This customer focus is found more and more in business literature, making headway against the traditional sales approach of “interruption” marketing, controlling the sales call and overcoming objections. I won’t say that the internet has led the charge in this change of attitude, but it has certainly played a large role in demonstrating that a customer-focused approach is required these days. Marketing media is ubiquitous, causing more and more of us to tune out. So discovering customer needs and meeting them is essential. Finding a powerful and interesting way to convey this all can be tricky, though.

It’s harder and harder to distinguish yourself in the marketplace and increasingly difficult to get people to pay attention. Becoming a resource for potential buyers is one way to be heard. Having people seek you out because they trust and value your opinions seems the ideal way to position yourself. With creating customers, and satisfied ones at that, as the central focus of your business, it is a natural progression to build business through relationships and positive word-of-mouth.

It is easy to get distracted by objectives and loose site of the ultimate goal. Satisfied customers as your holy grail affects every aspect of your business, from customer acquisition, to product/service delivery, to customer service and follow up.

Drucker’s quotes can be controversial and should stimulate thought and conversation. Maybe even push us into a chicken and egg argument. But the point of it all is that by focusing on satisfied customers, you may have taken the biggest step toward profit.

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?

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.   

Tis the season to plan and project.  CEO’s, COO’s, sales managers, business owners, business coaches, consultants, and all manner of folks remind us that we should make our plans if we expect to be successful in 2009.  Quotes by famous people, age old axioms, and various studies all point to the increased likelihood of success of those who take the time to plan.  And we all feel good when we complete our plan.  Of course, we are encouraged to implement an accountability process and review mechanism to ensure that the plan is more than just an annual exercise and becomes a document that guides our activities throughout the year. 

Planning came to mind as I have been battling my way through a thought provoking book, The Black Swan, by Hassim Nicholas Taleb.  I may have permanently injured my brain trying to understand everything Mr. Taleb presents and I hope he doesn’t have any kind of Google alerts that will let him know that I have, lamely, attempted to apply his writing to marketing. 

The sub-title of the book is “The Impact of the Highly Improbable” and I can’t possibly get into a whole lot of his ideas here.  However, a couple of the points made apply to our efforts to make projections and develop marketing plans. 

In a chapter entitled “The Scandal of Prediction”, we come across the phenomenon of anchoring.  This is the tendency of the mind to latch on to any random number and have it become the reference point for subsequent estimates.  The idea of setting goals and how we arrive at them came to mind as I read this. 

We often set goals based on a number that sounds good to us: $100,000, $500,000, ONE MILLION DOLLARS!  So where are we getting the numbers that will guide next year’s activities?

Another trap that we fall into as we plan and make projections is the absolute qualities we attach to the goals we set.  The truth of the matter is that our projections become subject to larger and larger error as time passes.  Immediately upon completing your Excel Spreadsheet, your assumptions (the basis for you projections) start to fall apart.  The countless improbables that occur daily begin immediately, and delay and shortfall add and multiply the process of decay.  So the predictions that we make, and which are the basis for our plan, become flawed and erode with time.  Think about what happened this past year and how much of that any us, experts included, anticipated.  You can see the challenge of trying to rationally allocate resources to achieve the moving targets that are your projections. 

So what do you do?  Give up?  Probably not.  We are an optimistic species so we forget about our past reversals and move on to the future.  The point is not that prediction is futile, it is that we rely too literally on our predictions, assuming them to be perfect.  The fact that they are not should be no surprise and we should act accordingly.  Why not select goals that range from high probability to lower probability of achieving?  Use this range over the planning period to help you prioritize and adjust to the changing business environment. 

The military adage that no plan survives beyond the first shot applies to all aspects of our lives.  The winner is the one most prepared for change and most prepared to adapt to it.  The purpose and vision we have for our business should guide us, not an arbitrary number.  Selecting goals that move you closer to your vision and an understanding that we don’t know what we don’t know is more rational than hanging your hat on a random number based on our narrow tunnel of knowledge.  

When The World’s Best Known Marketing Secret came out in 1994, it was one of the few books in the bookstores that talked about networking. Now there are dozens, if not hundreds. Over the next several years, you will see more and more about the importance of networking to build your business. It is developing into a science as well as a way of life.

Networking is all about learning how to connect with other people in meaningful ways despite, or possibly because of, our technological revolution. Online networking works, but relationships must still be part of the process. Using the internet to exchange ideas, share knowledge, and increase your visibility will be imperative in the coming years. Technology flattens the communication hierarchy and provides opportunities to improve your networking efforts, not replace them. I believe people who understand this will begin to effectively use technology without replacing relationships, to take their marketing to new levels in the years to come.

Dr. Ivan Misner, in the recent New York Times bestseller, Truth or Delusion, says, “We truly live in a high-tech, high-touch society. The more technologically advanced we become, the more important it is to reach out and touch real people in our work – to connect on a personal level with people.”

And yet, as new as all this technological connectivity is, it simply takes us back to an earlier era, when we lived in small communities with our extended families and knew all our neighbors. The old ways have become new again.