Five Steps to Become a Referral Magnet

There’s no better way to win clients than through referrals. Customers — rightly — worry about wasting their money on ineffective solutions or providers who can’t deliver. Having a trusted colleague of theirs vouch for you takes the risk off the table. The conversation is no longer about your background or your credibility — it’s about how you can get similar results for them. Referrals make the selling process dramatically easier, because you’re no longer “selling” — the customer is coming to you, eager to buy. But how do you obtain these elusive referrals?

Some professionals believe that quality work speaks for itself. If only it were so. Unfortunately, in a world teeming with competitors, you can’t afford to keep your head down and simply do a good job. If that’s your strategy, an occasional referral might come your way by accident, but you’re leaving money — gobs of it — on the table. Instead, you need to actively pursue referrals. That doesn’t mean you have to become a sleazy operator, constantly “on the make.” But it does mean you need to develop a clear referral strategy you feel comfortable implementing. Here are five proven strategies to get you started:

1) Give to Get. This one may be the easiest for the referral-shy to master. Train yourself to ask for referrals by giving them to other people. The secret is to develop a “connecting mindset.” It’s not often that someone will say to you, “I really need a strategy consultant. Who should I hire?” That may be obvious enough that you spit out the right answer (Dorie Clark, of course!). But more often than not, you have to be creative and find the opening to be helpful. It’s not about fobbing off a recommendation on someone — it’s truly providing value by making someone’s life easier. Your friend mentions how much she cares about the environment? Offer to connect her with the eco-friendly event planner you just met. A colleague is complaining about his aching back? It just so happens you know an ergonomic consultant! The more connections you make for others, the more they’ll want to pay you back, in a virtuous circle.

2) Do Folks Actually Understand What You Do? You might assume everyone knows what you do for a living. Odds are, they have no clue. Most people are too self-absorbed to clue in, so you need to make sure they get it. One good strategy — in line with the “give to get” theory above — is to ask for clarification about what they do and who their ideal clients are, so you can be on the lookout for them. That provides an excellent opening for you to clarify that because you do wealth management, you’re looking to work with high-net worth individuals, or because you’re an audiologist, you’re looking for clients 50-70 who care about their health.

3) Create a schedule. As Stephen Covey might say, it’s easy to neglect the important in favor of the urgent. Unless you hire a coach, no one is going to make you ask for referrals. It seems so much easier to focus on the meeting tomorrow, the report for next week, or picking a new photo for your computer’s wallpaper. But you have to be disciplined, because — frankly — it’s a numbers game. The percentages will vary from industry to industry, but you’re going to have to ask 10, or 100, or 1000 people, in order to get one new client. But that one new client may pay for all the effort, many times over. Create an outreach schedule and stick to it. Whether it’s three “touches” a day, or 10 every Friday, and whether it’s phone or email or messenger pigeons, you need to get it done.

4) Prioritize your asks. You probably know a lot of people, and you can’t contact them all at once (well, you can, but a blast email isn’t going to be that effective). Start with current and past clients, and work your way out to other business associates who have seen you in action and can testify powerfully to the kind of work you do. Later on, you can ask your hairdresser and dentist for referrals. Why not? You never know who they know.

5) Know what to ask for. Most people, if you have a good relationship with them, really want to help you. The problem is, they may not know how — so you need to guide them with very specific requests. Make it explicit what kind of value you bring and what kind of clients you’re looking for (“I help companies build their brands and increase sales, so if you know any business owners or high-level executives who might benefit from that, I’d appreciate it if you could introduce us”). And if there’s a particular way they can help, be sure to let them know (“Marianne, I understand your firm has regular professional development conferences. I often speak to companies like yours about sales techniques — do you have advice on how I might be able to break in, or know anyone I could talk to about this?”).

“Sales” — and all its ingredients, like obtaining referrals — has a bad name in our society. That’s your gain. If you practice these steps diligently, you’re ahead of the 95% of businesspeople who know they should be doing it but let fear and trepidation get the better of them. Sales, really, is about providing value to people who need it. As long as you keep that in mind, you should never be afraid to ask who else you can help.

Dorie Clark is a marketing and strategy consultant for clients such as Google, Yale University, and the National Park Service. Learn more at www.dorieclark.com or follow her on Twitter.

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Business Secrets from Scarface

This blog originally appeared on the Huffington Post.

I recently watched Scarface, the seminal 1982 movie featuring Al Pacino as Tony Montana, a high-flying Miami drug dealer. The movie highlights some clear business “don’ts” (avoid ticking off Latin American drug lords and don’t become a coke addict, for starters). But on his rise to the top, Tony Montana demonstrates the kind of business savvy and chutzpah we can all learn from. Here are four tips from Tony’s playbook.

1. Ask for a bigger assignment. Tony was the lowest man on the totem pole — a dishwasher, struggling to earn a living after coming to the U.S. during the Mariel boatlift. Mid-level cartel operative Omar Suarez approached Tony and expected him to jump at the offer of $500 to unload a drug-laden boat one evening. Instead, Tony scoffed and demanded more — leading a surprised Suarez to give him a breakthrough assignment handling a bigger deal. We live in a culture where too many employees only do enough to get by and shirk responsibility. Ask for more and your boss will take note.

2. Execute well at key moments. Tony’s first deal was supposed to be a clean exchange — but it turned out to be a double-cross. Tony stayed collected, even when his companion got chainsawed (it’s not a movie for the faint of heart), and took out the rogue operatives. When he returned with both the drugs and the money, boss man Frank Lopez was impressed. What are the key initiatives your company values? How can you get involved and contribute? (Fortunately, your version of “executing well” is probably more metaphorical than Tony’s.)

3. Think big. Down in Bolivia — where they’d been sent by Frank to craft a distribution deal — Omar Suarez was a tepid negotiator, insisting he needed to return to Miami and check in. But Tony, sensing a major opportunity, seized authority and unilaterally agreed to the multimillion-dollar deal. Given the profit potential, he knew it was time to act boldly. What are the calculated risks that can pay off for your career? Is it time to pursue a new degree, or launch a new initiative?

4. Know when to part ways. Sadly, Frank Lopez was unimpressed by Tony’s dealmaking and considered it too risky. Sometimes, if you’re a big thinker, you’re going to outgrow your boss’ vision. That’s often when it’s time to part ways. Striking out on his own, Tony partnered with his Bolivian colleague and quickly became a major player on the Miami scene, reeling in trashbags full of money every week. How can you enlist of the support of your boss and team members — or, if necessary, seize your own opportunity?

Ultimately, Tony Montana is a tragic figure. But he made a cinematic mark with his innovative empire-building. What can we learn from other business figures in the movies? What are your favorites?
Dorie Clark is CEO of Clark Strategic Communications and the author of the forthcoming What’s Next?: The Art of Reinventing Your Personal Brand (Harvard Business Review Press, 2012). She is a strategy consultant who has worked with clients including Google, the National Park Service, and Yale University. Listen to her podcasts or follow her on Twitter.

What Marketers Can Learn from Panhandlers

This article originally appeared in the Huffington Post.

I was recently in San Francisco and — like many who dare visit the city’s tourist hubs — was besieged by panhandlers, lured by the city’s temperate climate and historical generosity toward the downtrodden. With many homeless people suffering from mental illness, chemical dependency or other woes, it’s a challenging social problem. But as a marketer, walking back to my conference after receiving two distinctly different “asks” in quick succession, I realized that the sales secrets many panhandlers perfect on the streets — often as a matter of necessity — are also applicable to our work. (For the record, I think it’s a much better idea to give to homelessness prevention groups rather than to individuals on the street.)

My first approach came when I was seated on a bench outside the Ferry Building, the legendary food market. A man walked up to me and spoke so quietly, I was forced to lean in. “Can I ask you something?” he whispered. Unsure what to say, I nodded.

“Can you give me some money? I really need some money.”

I politely declined, but it wasn’t what he wanted to hear. He turned on his heel, and started swearing. “Bleeping bleep!” he shouted. “Bleep you and bleep my bleep!” Standing up for tourists everywhere, I swore back at him and added, “That’s not the way to make friends!” Of course he didn’t care for my career advice. He was on to the next mark.

So why didn’t he get my money?

• The forced yes. Like many slimy salespeople, he tried to force compliance by “asking” me whether he could ask me something else. It’s human nature — you almost have to say yes, but no one wants to.
• The fake intimacy. Speaking softly, forcing me to lean in to hear him — it creates a sense of rapport that can be powerful when genuine, but is otherwise a nasty sales trick.
• The lack of relationship building. Sure, getting money from tourists is a numbers game. But his shotgun approach — with his quick approach and even quicker metamorphosis from solicitous to seething — was a clue that money was his only concern.

My next experience, just a few blocks away, was entirely different. The next panhandler came up to me while I was fiddling with my cellphone. “Before you make your call,” he said, “Would you like to hear a joke?” How could anyone turn this down? Even though I was busy, I was intrigued and wanted to hear what he had to say. He sat down on the next bench over and launched into about joke about a student and teacher, replete with set-up and punchline. He wasn’t Jay Leno, but it was well-told and well-calibrated (not too racy or offensive).

What made his pitch so good?

• Recognition of the buyer’s situation. He knew I was busy, acknowledged the interruption (“before you make your call”), and implicitly promised to be brief.
• Offering value. Did I really need to hear a joke? Maybe not, but it’s something small that brightens your day. Whereas the other panhandler only spoke about his own concerns (i.e., give me money), this gentleman recognized the value of exchange.
• Good relationship building. Our encounter didn’t last more than 90 seconds. But by sitting down on the bench, he placed his energy and focus on our conversation. He was present, which is what you want in a sales encounter.

I gave him a buck. With his salesmanship and marketing savvy, he’d earned it.

What sales techniques do you find most — or least — effective?

Dorie Clark is CEO of Clark Strategic Communications and the author of the forthcoming What’s Next?: The Art of Reinventing Your Personal Brand (Harvard Business Review Press, 2012). She is a strategy consultant who has worked with clients including Google, the National Park Service, and Yale University. Listen to her podcasts or follow her on Twitter.

 

5 Obvious Referral Opportunities that People Miss

There’s no better way to make a sale than a happy customer spreading the word to her friends and colleagues. But most people treat referrals like “happy accidents,” rather than strategically cultivating them. Even if clients love you, it’s not often going to be top of mind for them to suggest your product or services. That’s why you need to remind them. Most people let their chance to “make the ask” fly by because they don’t recognize the opening. Here are five ways to spot them.

1.    When a client praises your work: When someone says you’ve done a great job, do you..blush? Mutter, “it was nothing”? Or say, “Thanks, Bob – it’s a pleasure working with you, and I’m so glad you’ve found it helpful. If you happen to know of anyone in a similar situation that you think could benefit from this kind of help, I’d really appreciate it if you’d be willing to introduce us.”

I think you know what to do.

2.    When you hit a project milestone: You don’t want to start badgering clients for names before the ink is dry on your first contract. But you also don’t have to wait until the end of your engagement. When you hit a project milestone – the completion of Phase 1, the training of all the headquarters staff but not the field staff, etc. – you’ve amply demonstrated your ability to deliver. Time to start asking, or at least planting the seed.

3.    When you see an opportunity: You’re leaving money on the table if you insist on scripting out every last detail of your referral asks – because opportunity will inevitably appear at unexpected moments. If the VP for Asian Operations is on site for a week, or you discover your client is on the board of a major industry group, don’t be afraid to seize the moment and make a particular request: Can you introduce me to so-and-so?

For the complete article, visit BNET

How Companies Win: Dorie’s Book Review

It’s rare and thrilling to find a business book with genuinely innovative ideas. I’m sad to report (because their PR firm kindly sent me a review copy) that How Companies Win: Profiting from Demand-Driven Business Models No Matter What Business You’re In by Rick Kash and David Calhoun is not it. There are some interesting insights, which I’ll get to. But overall, the book suffers from four critical flaws.

1.     It’s boring. This really shouldn’t be the case, since they credit a ghostwriter in the acknowledgements. But regardless, the book strives for a pseudo-academic tome that makes it almost painful. Witness what seems to be a thesis sentence for the book on Page 4: “The second lesson to be learned is that in an era of oversupply it is now imperative that you construct a framework in your company that encompasses and aligns everyone toward meeting not just the current but the latent and emerging demand of your highest-profit customers and consumers.” Got it.

2.     Fancy Word Syndrome. One vice of consultants is that they frequently use fancy words to sound smart when they’re explaining pretty basic concepts. This often stems from either insecurity or (as I’m guessing here) a desire to create a proprietary approach they can charge a lot of money for. Check out:

• “thesis for winning” (your plan)
• “need states” (when customers want to buy your stuff)
• “demand profit pools” (the target groups you want to sell to)
• “strategic growth opportunity areas” (where you want to focus)

3.     No there there. Kash and Calhoun’s concept, unfortunately, isn’t that earth-shattering. Basically, they’re saying that because the worldwide supply for goods and services is growing (thanks in part to globalization), the only move for successfully companies is to grow demand or risk falling behind. How to grow demand? Be innovative and strategic. Um, yeah.

4.     Overt shilling. Let’s be honest: every consultant or executive who writes a book hopes that they’ll get business out of it. But these guys are over the top, attempting to create a fake new specialty (“demand chain management”) that Kash can consult on (and for which Nielsen, the company Calhoun runs, can sell its new Fusion service). I’m surprised they got away with a particularly unctuous and self-serving anecdote involving a meeting between Kash’s firm and the former CEO of Anheuser-Busch, at which he was so awed by an incisive question that he immediately blurted out, “You’re hired!”

 

How Companies Win by Rick Kash and David Calhoun

 

 

All that being said, Kash and Calhoun do manage to marshal some interesting points to back up their thesis that (shocker!) it’s good to be innovative.

• First, they note that pricing power from 1991-2009 (as compared to the period from 1947-1990) declined 79% in the business-to-business market and 35% in the business-to-consumer market. That’s actually pretty amazing proof that you need to focus on differentiation.
• They cite an observation of Clayton Christensen and Michael Raynor in The Innovator’s Solution that expected returns from innovation can drive 60-80% of a firm’s market value. “The top 20 percent of companies that successfully drive innovation,” they recount, “deliver four times the total shareholder returns that the bottom 20 percent do.”
• They make a powerful case that pricing is key to success: “A 1 percent price increase has a 50 percent greater impact on operating income than does a 1 percent decrease in variable cost. More remarkably, that same 1 percent price increase has a 215 percent greater impact on operating profit than a 1 percent volume increase in sales.”
• Finally, the power of branding is enormous: “The Stern Stewart research firm has determined that if your customer believes that your product is both meaningfully relevant and highly differentiated, your margins go up 50 percent faster, your profits go up more than 200 percent faster, and your market capitalization also goes up more than 200 percent faster than it does for competitors who have not successfully created relevant, differentiated offers.”

Have you read the book? What do you think? And just how important (or not) do you think pricing is?

Dorie Clark is a marketing strategy consultant who has worked with clients including Google, Yale University, and the National Park Service. Listen to her podcasts or follow her on Twitter.

 

Marketing Secrets from the Beauty Mavens

I watched a fascinating PBS-produced documentary last night about the rise of the beauty industry and women’s entrepreneurship at the turn of the (last) century: the hysterically titled The Powder and the Glory. What can we learn from the likes of Elizabeth Arden and Helena Rubinstein? Here are my favorite marketing take-aways:

 

Elizabeth Arden and Helena Rubinstein were the mavens of the beauty industry in the first half of the 20th century. Photo from the Denishawn Collection, New York Public Library.

 

 

• Never move down-market; never cut prices. During the height of the Great Depression, Arden kept her prices high and thrived as an “affordable luxury.” Rubinstein, who had sold her business, watched her hapless successors cut prices and destroy the company (giving her an opportunity to buy it back cheap!).
• Own your niche. Elizabeth Arden (originally the rather prosaic “Florence Graham”) reinvented herself with a WASPy persona embodying upscale country living (the Martha Stewart of her day). Rubinstein – whose options were more limited given the anti-Semitism of the day – chose (very boldly for the time) to keep her name and played to her strengths, positioning her products for modern, edgy, urban women. Find your niche in the marketplace – whatever your competitors aren’t exploiting, or can’t – and make it your own.
• Adapt or die. Arden and Rubinstein (whose companies were both subsequently sold) suffered from the same malady: the impression they were immortal. Neither developed a succession plan, crippling their companies’ long-term prospects, and neither embraced television or modern, mid-century marketing methods. Coming into the ’60s, their brands were firmly regarded as “your mother’s makeup” by the restive Baby Boomers. You can never afford to stagnate or assume that tactics (marketing or otherwise) that worked in the past will continue to do so.

Dorie’s Book Review: The Trusted Advisor by David Maister, Charles Green and Robert Galford

Occasionally, I like to go back into the vault to highlight top-quality business books. Today’s hat tip is to David Maister and company for their 2000 book The Trusted Advisor. This book is so sensible and contains so much high-quality information, it’s hard to summarize the best points, but here goes:

 

The Trusted Advisor. Photo by Nenad Stevanovic.

 

 

• If you’re going to succeed as a consultant, you have to move from being perceived as a “hired gun” to being viewed as a trusted advisor. In short, that means the client has absolute confidence that you are looking out for their best interest – not yours.
• You have to earn the right to offer your opinion – and you earn that by careful listening and learning to understand them and their situation.
• To build trust with clients, first assiduously fulfill commitments on “the small things.” If you say you’ll call Thursday at 3, do it – and your client will learn you can be relied upon.
• I’ll quote directly on this one: “Like many other researchers, we have found in our work with professional service firms that the cost of developing new-client business is 4 to 7 times higher than the cost of developing the same amount of business from an existing client.” That should almost speak for itself. There is profound value in developing long-term, positive client relationships.
• Too many consultants (and professionals of all stripes) are scared to “look like salespeople.” Get over it. Here’s a great way that Maister and Co. describe the process: “To be professional, we must point out possibilities. Some call that selling. We call it contributing ideas…There is very little difference between what we have just described as a professional obligation, and what someone else might call selling. After all, both involve noticing a legitimate opportunity for improvement, and raise the awareness of the client about the significance and benefits of taking the action suggested.” That’s the mindset you need to succeed.

What are your best tips for becoming a “trusted advisor”?

Money, Fame, and Blogging

The great blogger Chris Brogan had an interesting post recently about thinking of your audience as “currency” – but not as “money.” It’s a particularly ripe topic because these days, with 1) the advent of social media;  2) the ease of content creation; and 3) the expectation that thought leaders will create such content, many professionals are producing more and more for free. That’s terrific news for readers, fans, and anyone who wants to learn more about your topic – but it can be a deadly path for “content creators” who spend all their time perfecting blog posts and not enough calling clients and making sales.

My grand theory?

1. You can make plenty of money without being famous (most of probably can’t name too many hedge fund managers, yet they control the universe).
2. Being famous helps you make even more money. Once you’re a “name,” for whatever reason (ignominious or otherwise), you can leverage that to get more contracts, speaking engagements, book deals, etc. People want to surround themselves with “the famous.” YET…
3. You can also be famous and quite poor, if you don’t have a plan to leverage it.

 

1876 Greenback, from Cornell University collection.

 

 

In the post that served as Brogan’s jumping-off point, Julien Smith (his co-author for Trust Agents) wrote about how his blog “has no business model.” He acknowledges that the increased credibility helps him sell more books and get better speaking fees, but that he resists “hard sell” tactics and trashy products. Smith is absolutely right that pushing subpar products on readers would quickly turn them off and tarnish his reputation. But I’ll argue that his blog does indeed have a business model. For serious professionals who want to establish themselves as thought leaders, the model is “give to get.”

A blog doesn’t need to make money on its own, via affiliate marketing or Google Ad placement or whatever. (Disclosure! When I mention books I like, I use Amazon affiliate links.) But it does need to make the author money, somehow. In my case, it allows clients to “try before they buy” and get a glimpse of my thought process before they hire me for a speech or a consulting gig. It’s a good way for both of us to 1) find business soulmates or 2) weed out bad fits. After all, if you don’t like my writing style, you probably won’t like my consulting approach, and it’s far better to know that now so we don’t waste each other’s time.

As Samuel Johnson put it, “No man but a blockhead ever wrote, except for money.” That may be a bit of a stretch – but he’s got a point. Blogging can be enriching for the soul, but if you’re spending a significant amount of time doing it for your business, it better also be enriching for your bank account.

How do you leverage your time blogging or using other social media to win business and get clients?

Unstoppable Online Branding

Tomorrow, I’m giving a talk on “Unstoppable Online Branding” for Somerville Local First, a group that works to help local businesses thrive. A few tools and sites I’ll be talking about:

• Chartbeat. For some businesses, Google Alerts are enough to keep you informed about what’s being said about you online. But if you’re the subject of a lot of chatter – or important breaking news – you may want to kick it up a notch with real-time info, Chartbeat’s specialty.
• Flowtown. What social networks do your customers use? Where do they congregate? No need to guess anymore: if you’ve got an email list, Flowtown can comb the data, enabling you to make rational, analytical decisions.
• Location-based services. Hard to predict whether Foursquare, Gowalla, or Facebook Places will emerge victorious from the cage match, but it’s clear that with increasing numbers of smartphones, the rise of GPS, and the ability to reach customers with offers and coupons when they want them most–i.e., when they’re proximate–this will be a big deal in the future.
• Groupon. Some businesses love it, and praise its ability to draw in thousands of new customers. Others condemn it for virtually bankrupting them with hordes of one-time shoppers grabbing the bargain, never to return again. However you look at it, Groupon is a major phenomenon. Frankly, my sympathy is with Groupon here (businesses: if you couldn’t afford the offer, why on earth would you have green-lighted it?).  A phenomenally powerful tool if you harness it correctly.

What are your favorite new online marketing and branding tools?

Consulting Best Practices

I just finished up an excellent few days in Hilton Head, SC at a best practices summit organized by consulting guru Alan Weiss. About 70 top consultants talked about industry challenges, case studies, and ways to improve our performance–because, as I advise my clients, it’s essential to make sure you’re staying ahead of the curve.

Business is changing at breakneck speed, and we have to learn new skills to stay ahead. Photo from New York Public Library Collection, New York, 1936.

My best take-aways?

• The most value comes from “perpetual motion machines” of innovation. How can you leverage the power of a community to enhance overall value (as with Apple and the apps store)?
• You can tell within one meeting if you and a client will be a good fit. Ask the right questions and save everyone agony down the road.
• The lowest-hanging fruit (for potential clients/buyers) are people whom you already know, and who already know you.
• Because of changing market conditions, within five years, you can’t afford not to be selling both to corporations and to individuals.
• Don’t save too much information, or you’ll get paralyzed by it. Save only what’s essential–and make that easy to find and access.

What are your best practices for 2010 and beyond?