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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 have the great pleasure of eating breakfast most Tuesday mornings at Matt Capozzi’s NY Deli on Roswell Road over here in East Cobb. The group is an ad hoc group of business people who meet because…they want to. That occurred to me today. And as it occurred to me, it also occurred to me that this unique group results from the culture established by a couple of folks in the group. You see, this group, like many around the Metro area, sprang up fairly spontaneously, not as part of a larger organized network. They wanted to create a group that attracted people who wanted to help each other. Not so unique; that’s what all these network/referral groups aspire to. However, not all achieve it.

At this point, I need to embarrass one of the founding members, Bob Zartarian. Those who know Bob, know him as a very outward looking fellow. He’s always looking for the benefit he can bring to other people. Bob’s attitude is representative of the group and is apparent to everyone who visits and, as a result, we have grown from 5-6 people to over 20. We have few rules but things run smoothly. And, most importantly, connections are made, business referrals are passed. There certainly are others in the group who add to the culture, Cliff, Tim, Peg, Larry, Bill, Ruthe, Eric and other regulars. All there regularly. All there to help each other. We call ourselves TONIC and the group truly is.

When I’m in town, I make it a point to attend. Not just for the business opportunity, but for the camaraderie of truly good people. For those of us who are “Lone Rangers”, working our businesses mostly alone, such company is essential for success. Look around for such groups, whether they are part of a larger organization or a neighborhood group like TONIC. Become a part of one. Contribute.

The good thing about our world is that there is an abundance of opportunity, in every sense. And that includes good people creating good networks.

“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?