Have you ever known someone who seems to always be able to get what they want no matter what? If you do, you can bet that this person has a specific strategy which they have developed to help them achieve their goals.
Cultivating business through relationships
Can you imagine the following conversation throughout Dubai and around the world in many businesses during the last few years? Maybe you have had it yourself.
“We need to get more business so what should we do?”
Even if SMEs have money, they tend to spend it on the things they have always done – advertising and marketing, and PR or sales people to make cold calls. While these do work, they all have an ongoing cost attached (e.g. monthly between AED10,000 and AED100,000), costs for the SME or micro business that could actually put them out of business. Studies show that globally over 70 per cent of SMEs go bust in their first two years.
Alexander Williams of the Dubai SME informed me it is more like 80 per cent in the UAE.
The above methods of new business generation are still not the number one source of landed new business. So what is it? Where should we be investing our knowledge and training to get more business?
What no one ever does is put up their hand and say, “Let’s get referral marketing training” i.e. how to grow our business by relationship or networking. You may already be scoffing to yourself saying networking doesn’t work. I challenge you to read on.
Why don’t they say it?
Especially when for most SMEs between 70 per cent and 100 per cent of their business comes through referrals, word of mouth and networking (they are not the same thing by the way).
Business owners like to be in control and when you can’t control something we tend to opt for what we can control, the things we know and have always known, such as pumping money into getting sales people or advertising and marketing budgets.
They don’t say: “Let’s get trained in Referral marketing.” Referrals always come by chance don’t they? Well, actually, they don’t have to.
I will say it again because it’s so important, they don’t have to come by chance. You can predict referrals. You can actually predict the top 70-100 per cent of your new business.
At the Referral Institute the world’s leading referral marketing training, consulting and coaching organisation, we specialise in showing business owners and sales people how to generate a regular, high quality stream of referrals for your business by strategically and systematically filtering and training your network to bring you clients ready to buy.
Busting some myths about networking
Clients are not your best source of referral:
One of the biggest delusions about providing good clients service is that “if I give good customer service then my clients will refer me.” Unfortunately, that’s just not true. They may refer you if and when they are asked- “Do you know someone who….” which is nice, but then it is chance and you can’t grow your business on chance.
You can’t go back to a client on a regular basis and say please give me referrals, I am having a bad month! If you do repeatedly then how long is it before the client leaves you?
Yes, clients can be a good source of referral, but your plan needs to be more than just good customer service. Good customer service does more to keep clients than it does to generate new referrals.
Word of mouth is always working -truth
Yes, it is always working; it’s just not always working for you.
Business owners these days pay significant amounts to develop their brand presence that it can often be a hefty percentage of the start-up costs. Then many businesses proceed to destroy their brand daily with poor business ethics. Not returning phone calls or e-mail; turning up late for meetings, mistreating their suppliers or clients and of course not doing their job properly.
The suggested ratio is 5:55 or these days possibly 5:2000 and more.
Do something good and people will tell between three-five people. Do something bad and they will tell 11 people and each of these 10 will tell five. In the modern age with social media this could mean thousands or hundreds of thousands of people seeing complaints. This is serious, and businesses need to consider and control their bad word of mouth as much as develop good word of mouth.
The more referrals you get the better- delusion
It’s not about getting lots of referrals, but it’s about getting quality referrals.
I know lots of people who tell me they don’t need my help because they have lots of referrals. What they don’t realise is that often these are nothing more than leads. A lead still has to be worked on because it is not necessarily prequalified. This means a large investment of your time as a sales person often with no payoff. My studies show about between six and eight hours for a lead.
A good quality referral that has been pre-filtered and confirmed and referred to you by a trusted (and trained) contact could close in a matter of minutes.
Imagine being able to see less people and close more business because your network has been trained to do the work for you. Phew, whatever will you do with all that free time? Earn more and live more perhaps?
The more networking you do the better-delusion
It’s more about doing the right networking with the right skills in the right places. I regularly see people rushing around from one group to another, because they don’t manage to close a deal they consider it a waste of time.
Networking is about relationship building not selling.
Let’s face it, we all go networking with a view to hit a GOAL whether it’s to sell something or simply make connections that can help us both in business and life. It’s the way we do this that means we are remembered positively or negatively.
The challenge is when the majority are there to sell and very few are there to buy there is a disconnect and the “feel” of the event becomes mercenary.
So here are some thoughts for you:
Try and meet people who you can look to build a relationship with, people with whom you could develop a referral relationship by passing each other numerous referrals. This is a more efficient conversation than trying to close one deal in the night.
Try to listen more than you talk. The more you can learn about them and what they need or want the easier it is to build a relationship.
Set a Goal for who you want to meet or what you wish to achieve. While you may wish to stay with one person you know for comfort, you can either individually or with that person try to meet new people. Ten minutes with each person is good, if they are of interest book a meeting at another time when you can sit and discuss opportunities in comfort.
Take a pen to make a note on business cards you get. Make a note to remember the discussion. Remember your business cards!
Follow up with the people you meet in an appropriate way. Because they gave you their business card it is not instant permission for you to send your catalogue of products. If you don’t believe me think about when someone has done it to you. What happens to that e-mail? Delete, correct?
Networking and doing business by relationship is not new. It is something we have always done as individuals and as a race. We have simply lost our way, and forgotten how simple it can be to do and how powerful it can be. The trick is to make it efficient, by spending the right time with the right people and using the right skills to achieve your goals. We all have the car; we just need to learn how to drive it properly. Unfortunately, most people have the car but are still insisting on walking.
An experienced business trainer, Phil brings over a decade of experience to his role as Master Franchisee for the Referral Institute. His expertise and experience working with both companies and networking associations, coupled with a passion for training have helped him launch the most successful BNI Chapters in the Middle East to date. He regularly appears as a speaker in the UAE and abroad educating people on how to build their business by word of mouth and “Creating Referrals for Life.”