A Question of Trust : A Conversation with Vanessa Hall Part Two

This article originally appeared in The National Networker

Last month I introduced you to Vanessa Hall, the award-winning speaker and author of Trust in Business. Vanessa outlined her model for understanding the foundations of trust and what you need to do to maintain trust in business relationships and ensure it doesn't erode and destroy relationships.

In the second part of the interview I asked Vanessa to elaborate on the role of trust in referral relationships and how to approach referrals with trust in mind.

A: In my new book I’ve been talking about how a trusted introduction can help a salesperson reach their prospect far more easily than cold calling and trying to get past the ‘gatekeeper’. Clearly that’s valuable for the salesperson, but how can the person passing the referral protect the trust they have with the prospect?

V: One of the key things about referred trust that I talk about is understanding both the benefits but also the risks involved, so we have to be quite careful when we’re referring someone else to somebody with whom we have a trust relationship.  This is where my theory of situational trust comes in as well. One of the important things which a lot of people don’t do when they’re giving referrals is to understand in what situation or what context does their trust relationship with this person exist.

Often what happens, for example, is that I might know somebody through the fact that our kids play soccer together. There’s a trust relationship that’s been built around picking up kids, dropping them off, those sorts of things. There’s still a trust there, but it’s very specific to that particular situation. If I refer somebody into that person, somebody else with whom I have an element of trust, but they’re looking for a business type referral, the person who we’re referring them to trusts me more from a social context. If I’m not clear about who this person is that I’m referring them to and why I’m referring them you can actually open yourself up to some confusion.

In understanding the situational trust that exists between two people we can also begin to develop and understand the expectations that we have, and the expectations that the person referring into them might have as well. The process of referrals works much better when you acknowledge the trust relationship that you have and then communicate the context of that contact.

Often what people do is refer people and then leave the relationship up to them but I’ve been caught out a number of times.  Just giving a contact is not enough if we want to build trust. If we don’t frame it properly, not only is the relationship not bridged between this new person and the contact but it can also damage the relationship between that person and you – the person who’s giving the referral in the first place.

A: Framing is vital. I talk a lot about ‘qualified’ and ‘unqualified’ referrals, based on the relationship you have with someone. You may, for example, pass a ‘qualified’ referral to someone you have only just met, by making that clear to the prospect. Where you know and trust the person you are referring though, the referral is ‘unqualified’. You are clearly recommending their services, by saying for example, “talk to this person, they’re superb’. 

How much time do you spend following up the introductions you make to ensure both parties are working well together? 

V: I like to know and I always ask for feedback whenever I’ve given a referral because there are a number of referrals made and if one of them doesn’t work for some reason then I have to sit back and ask what’s happening in this process. Am I not connecting the right people or am I building up an expectation that’s not being delivered?  What’s actually going on?

If you never ask for that feedback you simply don’t know.  You just keep referring people and sometimes you can really end up wasting a lot of people’s time if you’ve not done it properly, so I certainly look for feedback.

Just going back to your point before about when you say, for instance, talk to this person, they’re superb, what can happen in making a statement like that is you can certainly build up an expectation but there’s also an implied promise.  I talk about the difference between implicit and explicit promises, there’s an implied promise – the minute you give somebody a referral, there’s a very good chance that this is going to turn into a business referral, which to me is the implied promise that can break down trust more quickly.

So in not being clear about that and making a simple statement like “this person’s fantastic” or “they’re a real go-getter” or “they’re really friendly” or whatever, you’ve made an implied promise and built up an expectation in that person’s mind about how their interaction might play out, and if it doesn’t play out exactly in the way they expect and the way they believe it was promised to them and it doesn’t meet their needs then their trust in you can break down very quickly.

It’s about respecting the trust that you have and I talk about handling it with care. I compare trust to an egg, it can break very easily so you need to handle that trust very carefully and respect it for what it is.
It’s a gift when people trust you.

A :  Would you introduce someone you’ve only just met to somebody who is a very important client of yours?

V: If I’ve got a very strong sense about the person, but again I’d make it very clear that I’ve only just met them, and I can’t vouch for them other than I’ve got a sense that they were nice, or the right sort of person, but yes I certainly do qualify it in your terms.

A:  Do you find yourself from holding back from introductions that you could make until you feel the trust is at the right level?

V: Yes definitely. I think to some extent it depends on the nature of the contacts. For example, the more work that I do in senior government levels and with people connected with the UN, a lot of people want to know the people who I know. I don’t believe it’s my place to just suddenly open the doors and pour all these people to them, so it’s also being clear about what’s the nature of the relationship between me and these other people and what are their expectations in terms of protecting that relationship too.

It’s a difficult one, because on the one hand you certainly want to help people and help their business to grow and networks continue to increase, and I love connecting people but there is an element of – you know – I’d really love to understand more about you as a person and what you are trying to achieve; what’s the goal?

And what are you expecting out of this connection as well, because I’ve seen it go terribly wrong in many situations

A: You talked about referred trust, you talked about situational trust, can you just explain the other types of trust in your model?

V: In the book I talk about blind trust. With blind trust we jump in, we don’t think about what we’re expecting, about what we need, and we don’t articulate that. And so what happens in a blind trust situation is we are often left quite disappointed and we often blame the other person. But we had a role to play in that by obviously not being clear about what we expected out of this relationship, this interaction and what we need? You should also ask can this person actually promise to deliver on those, are you trusting the right person for the outcome you are looking for?

I talk about sceptical trust, which is the opposite.  We’re very, very clear about our expectations and we want to get right down to the nitty gritty detail before we step into the trust relationship. Very, very clear about our expectations, very clear about our needs, We’ll only trust somebody who will 100% promise to meet those.
I talk about middle ground. There’s a balance between those two, both of them can work very well in some situations but both of them can be very detrimental so there’s a middle ground there. We have to articulate and be clear about our expectations and needs and be sure that the person we’re dealing with can make promises to deliver that.

We can’t go down to the nth degree and people can’t always promise every little detail and so there is a point where we have to step into the relationship but by understanding the model of trust we can also continue to communicate effectively as well.

Free Teleseminar tonight!

This evening, at 8pm BST, I'll be interviewed by Richard White on the subject of 'Leveraging the Power of your Network'.

This is a free teleseminar, and you'd be more than welcome to join us. You can get more information and sign up here.

CONNECTING IS NOT ENOUGH: The Anatomy of a Referral (Part Three)

This article originally appeared in The National Networker


You are surrounded by people who have frequent opportunities to refer you and who would be delighted to help you, yet you rarely, if ever, receive referrals from them. In the cases where they do make introductions they tend to be far from the connections you’ve been looking for.

Why should this be? Surely if you have a network of people who will help, your word of mouth marketing should be simple?

The problem is that attracting good quality referrals takes a strong degree of focus and planning. You do have the tools and resources at your disposal, but you have to understand how to use them. After reading the last two articles in this series you should by now have a clear idea of what you are looking for in a referral and who to turn to for help. Once you have inspired those people to want to help you, the next step is to educate them so that they understand how.


Out of the picture

We talked in Part One of this series about the quality of a true referral. The person referring you (your ‘champion’) has spoken about you to someone who may be in need of your services. That person is interested in hearing from you and is waiting for your call.

If your champion is going to be able to get the prospective client interested in hearing from you, they need to know enough about your business to make a strong case. They need to recognise that your prospect has a problem that you are able to solve and have a reasonable understanding of how you solve that issue and the benefits that result.

Remember, most of the time you will not be there when they have the conversation. You have to consider yourself to be out of the picture. If you are going to educate your champions effectively, you have to be able to pre-empt the conversations they will have with your prospects without you there.

Very often you may ask for referrals to people and explain why you want to meet them. This is despite the fact that those people have no interest in why you want to meet them at all. They don’t know you and have no buy-in to meeting your needs. Instead, they are focused on what they need and what they want.

If your champions are going to be able to get them to want to meet you, therefore, they need a message that will be relevant to that person. Identify what their problems are and provide evidence that you may be the person with the solution and they’ll be interested.


Simple, sticky and transferable

Armed with the knowledge that you need your champions to have conversations about you when you’re not around, the temptation may be strong to give them as much information as possible, so that they couldn’t possibly forget anything.

Whatever you do, avoid this temptation! The more you give people to remember, the more they’ll have to forget. Keep your message simple.

In a workshop I ran a few years ago I was developing a sixty-second referral presentation with an image consultant. As local elections were approaching, I suggested focusing her request on referrals to people in politics. After all, we are often told how important image is in making first impressions and if you want your political message heard it is important to ensure your appearance appeals to your target demographic.

We crafted a straightforward request based on an easy to understand premise. People listening to the message would think of people they knew in politics and feel comfortable approaching them on the image consultant’s behalf, with a strong message that would be easy to understand.

Unfortunately, when it came to testing the presentation on the group in the workshop, the image consultant succumbed to temptation. She didn’t want to leave any opportunity untapped, and, while asking for introductions to people involved in local politics, also asked for Entrepreneurs, Chief Executives, Sales Directors and any other possible client she could think of.

When tested, no-one in the group remembered anything specific about her presentation, particularly that she wanted to meet people involved in local politics.

Focus in on who you want to meet when you ask people for referrals. If you’re being specific in your request, you can paint a clear picture of the conversation that will follow. What is that person/organisation’s specific problem? How would you approach it? What will happen as a result? Stick to answering those questions, keeping everything very simple.

Have you worked with people with similar issues in the past? If so, share a story that answers the three questions listed above. People love to hear case studies; they bring your business to life and make it so much more understandable to those outside your industry.

As well as being simple, your message needs to stick in people’s minds and be easy for them to repeat to possible clients for you. The more convoluted your message, the harder it is for people to remember and to pass on accurately.


Tracking the results

Once you have the basics of a good referral strategy in place, take it to another level by including it in your business planning.

Set up a spreadsheet of your top introducers and make a note of who they know, how you are inspiring them and referrals they have promised or you have requested. As referrals come in, attribute them to the appropriate champion and track your follow up, make sure you stay on top of the game.

By keeping a note of all activity, you can keep your champions involved, letting them know how you are proceeding with the introductions they have passed and thanking them when they are successful. You should be just as focused on giving them feedback when they don’t work out, both to keep them informed and to help them understand how to pass successful referrals to you.

One advantage of tracking referral activity is the ability to see who your best referral sources are and what inspires them to refer you. You can then both make sure you keep them engaged and also replicate that behaviour with others.

Additionally, when someone stops referring you, it will be clear by looking at your spreadsheet. Where a referrals strategy doesn’t exist it might be months before you realise that you haven’t had a referral from or spoken to someone who had previously introduced you to a lot of new business. It can then often be embarrassing to go back to that person after a long period.

One of the exercises I ran when working with one of the major banks was to ask each delegate to make a list of people who had previously referred them but hadn’t done so for a while. I then asked them to call one person on that list and reignite the relationship.

Several of the delegates found that their previous champion had assumed that the delegate had left the bank or moved onto another job as they hadn’t heard from them for so long, and on more than one occasion they offered a new referral during that telephone call. How much business had been referred elsewhere in the meantime?

Another advantage of tracking your referrals behaviour is that it allows you to forecast the level of business coming in from future referrals. Once you have a system in place that consistently produces good quality referrals, it is easier to predict and guide future behaviour.

It’s all a long way from the manufacturing company I mentioned at the beginning of this series who track every source of new business other than referrals, and who had not seen a genuine referral in at least eighteen months. Having implemented an effective referral system, they can now look forward to a regular, predictable flow of referrals, spend time in meetings with champions rather than cold-calling unproductively, and see the business turn into a profitable concern once more.

When are you going to start?


If you’d like to get started with a free ten question survey to find out how effective your current referral strategy is and a ‘Referral Book’ spreadsheet to track referral activity, please email me at andy@lopata.co.uk

CONNECTING IS NOT ENOUGH: The Anatomy of a Referral (Part Two)

This article originally appeared in The National Networker

Referrals should be the backbone of the development strategy in many businesses, but few approach the key skill of asking for referrals with the necessary understanding of what they are asking for, who to ask and how to track results.

In The Anatomy of a Referral Part One I talked about a client of mine whose lack of the knowledge outlined above has had a severe impact on their bottom line. We looked at what a referral is, in comparison to other types of business information such as recommendations and leads. And we discussed the impact referrals can have on the way you work and the results you get from the activity of your sales team.

We now need to move on and investigate where referrals come from, before next month, moving on to how to educate the people who are going to refer you, to make it as easy as possible for them to make the connections you are looking for.


Who do you ask?

If you are going to build a strong referral strategy, you need to recognise who your Champions or Advocates are going to be.

To do this, you need a firm understanding of the principle of Six Degrees of Separation. This phrase, coined by social psychologist Stanley Milgram in the US in 1967, has caught the imagination of people across the World, leading to films and games with the same title. In short, the theory suggests that we are no more than five steps from anyone in the World.

For example, I recently wanted to source a signed Chicago Cubs jersey as a present for my cousin’s son. One of my contacts in the UK introduced me to his sister, who works in a senior position in the White House. In one simple introduction I was one step from the President of the United States!

You won’t necessarily want such high level connections, but if you have a clear idea of who is in your network and who they are connected to, it becomes much easier to recognise the routes you need to the connections you seek.

In another case, a participant on one of my workshops talked about me and introduced me to the father of one of the boys on the kids’ football team he coached. That father was the Sales Director for one of the World’s leading airlines.

Most companies who do have a referral strategy of any kind tend to focus on their existing clients, which is a sensible place to start. After all, there are two key elements that make people comfortable referring you. They need to have trust in both you and your product, and they need to understand your services and why people would want to talk to you. Who better to ask than your clients, people who hopefully have both of those elements in place?

Interestingly, however, the most popular time to ask a client for a referral is when they have just bought from you. At that stage I would argue that, although they have shown an element of trust by parting with money for your support, that trust is based on what you have told them, not on their personal experiences.

Surely the best time to ask for referrals is later on in your relationship, when they have witnessed the power of what you do and the impact on their business or life?

I discussed this point in a meeting with one company recently. They admitted that they asked new clients for referrals as a matter of course when they signed them up, but couldn’t recall a single instance of going back to those clients to ask again after delivery, or when their relationship had developed. As we discussed this they realised how nonsensical their current approach was.


Break out of narrow thinking

My concern is that most companies who focus on just asking their clients for referrals miss so many opportunities through such narrow thinking. They are not tapping into the support available from the people closest to them and with the greatest vested interest in their success.

During the workshop I ran with the manufacturing company I wrote about last month, the Managing Director suddenly realised that in the eighteen months he had worked for the company he had not recognised that a connection to a dream client was the person closest to him. As we talked about possible referral sources, he thought of his wife, who works in a senior position for a company who has the exact need for his company’s products.

Interestingly enough his wife had recognised the same opportunity at the same time. As he was talking about the possible connection in the workshop, she was talking to her colleagues about inviting him into the company to tell them more about what he could offer!

This wasn’t an unusual outcome from a workshop. On another occasion, a Deputy Regional Director for a major bank went out at the break and called his brother-in-law to ask for referrals. He had never asked before, or even thought of doing so, yet he walked back into the room with three promised introductions and the business relationship developed from there.

Why do we have such an obstacle about asking our family and friends for support? There is a reticence to cross the ‘line’ between personal and business lives. That is understandable but that line is becoming increasingly blurred as people make friends through their networks and realise the power of connecting people.

Besides, who decides where the line should be drawn and how thick it is? It’s absolutely right that you shouldn’t force your business problems on friends or family; I remember sitting stupefied through a friend’s flipchart Amway presentation when I was eighteen. But how would you feel if you found out that a friend’s business had folded and you could have helped; but they never asked?

A friend of mine recently found out what I do for a living, after knowing each other for fifteen years or more. We go to football together and never discussed work. It was only through becoming Facebook Friends that he started to see what my business is. He was mortified to realise that his firm had been working with one of my competitors for five years instead of with me!


The danger of pigeon-holing

In a coaching session last year with a web designer, we talked about the different people who could possibly refer him. One key place to start is with people who understand your business well (remember the importance of trust and understanding discussed above) and who are talking to similar customers about similar issues.
I asked my client if he used a printing company in his business and whether that printer regularly visits his office and chats with the team when he is there. As expected, the answer was yes on all counts.

I then asked where the printer would go when he wasn’t with my client or at his own premises. Of course he wasn’t just visiting one client; he was out and about going to deliver to a number of companies and getting to know their business and their challenges. Not only that but he was surely in a great position to refer a web designer as he would be talking to clients about their marketing and about changes in their business which required new print work. Such changes would often impact on their web strategy too.

So, had the web designer ever asked the printer for help with introductions and referrals? Of course not! Not only had he never had the discussion, the printer had just had a new website done and hadn’t invited my client to tender.

The reason for this was quite simple, the printer saw the designer as a client and the designer saw the printer as a supplier. These pigeon-holed positions dictated the conversations they had and the way they thought of each other. Yet surely the printer had a vested interest in supporting the web designer and helping his business grow. After all, the more successful the designer, the more work the printer would get and, hopefully, the more punctually the printer would pay his bills!

You are surrounded by a network of people who can help you. But if you are like most people, you are pigeon-holing them into particular relationships. Understanding how to develop a network of Champions starts with unraveling those relationships and recognizing that they all potentially have a network which could support you.

Look to friends and family, industry peers, clients, suppliers and social groups for people who could potentially refer you. Identify who has the greatest levels of trust in you, who wants to refer you the most, who understands your business and can recognise opportunities for you and who mixes in the right circles, talking about the right subjects giving them the opportunities to refer.

Make life easy for yourself and draw up a list of five or ten people drawn from all of these groups. People who you think may either be motivated to or positioned to refer you. You can then focus on building the levels of trust and understanding, working out the connections they have in their network and building these people into your team of Champions. Start with this group before adding to it.

In next month’s article we’ll take this group and look at how you educate those people so that they find it easy to make connections for you and become effective sources of new business for you. In the meantime, think about what you need to do to inspire them to want to do so and how you can help them first.

CONNECTING IS NOT ENOUGH: The Anatomy of a Referral (Part One)

This article originally appeared in The National Networker


Growing a business without developing a flow of good quality referrals can be tough. Yet so many companies try to do so.

Last month I was working with a manufacturing company. Owned by a larger US organisation, the chances are that they wouldn’t be in business without external support from the parent company. They have been making a loss for over two years and last year made most of their sales team redundant, losing a number of clients in the process.

Around the same time they brought in a new Managing Director with the remit to turn the fortunes of the business around. That would be a tough enough job for anyone in the circumstances, it’s proven to be even more so in the current economic climate.

The Managing Director asked me to come in and work with his sales team and help them gain an understanding of how networking could help them turn the tide.

Most of their business has come through existing customers re-ordering or purchasing new products. There is very little external business and most of what has come in has been attracted through their website. There has been very little pro-activity from the sales team to bring in new business. Referrals certainly haven’t been on the agenda.

It was very interesting to look at the reports the MD showed me. The company has been meticulous in tracking all sources of business. At a glance you can tell what business came through existing customers, cold calling and from the website. But there was no recognition of referrals in the report. They hadn’t even mentioned them.

I asked the team to share the last time they received a referral. The first person to answer had been with the company for eighteen months. He had received one ‘referral’ in that time, over a year ago. There was a similar story from others in the group.

Clearly, this company needs a change in focus. Referrals quite simply haven’t been on the agenda. In fact, I quickly identified that there is even a lack of understanding of what a referral is. When the sales team talked about ‘referrals’ they had received, they talked about when an existing customer moved companies and invited them to tender in their new role, or when one person told another that they were a company who could help.

Much like people who try to give out two or three business cards to everyone they meet in the hope that they will be passed on, there is a clear misunderstanding of exactly what a referral is. This is a common problem. When I was Managing Director of Business Referral Exchange, I often found myself frustrated with seeing members pass each other phone numbers to cold call under the guise of a ‘referral’.


What is a referral?

If you are going to introduce a strong referrals strategy into your business, take some time to understand exactly what you are looking for. There are various pieces of business information that can help you develop and generate sales, but they are not all referrals.

Tip
A Tip is quite simply a piece of information, nothing more than that. No individual names or contact details are passed; you may not even know there is a need for your services. A commercial estate agent might like to know that a company is moving, a speaker that a conference is imminent, a lawyer that a merger is imminent.

We can all be helped by knowing more information about prospective clients. With a tip, we have to do all of the subsequent leg work ourselves.

Lead
With a lead you have some more information. A name and phone number perhaps. According to Wikepedia, a lead ‘represents the first stage of a sales process’. There is still a lot of work to do but you are a step further ahead.

When someone in your network gives you a name and a number and says ‘you need to speak to this person’, they are giving you a lead. If they invite you to use their name when approaching the prospect, that is simply a warm lead.

Recommendation
Most commonly mistaken for referrals, a recommendation involves someone telling your prospect that they should consider using your services. Wonderful when it happens…..as long as your prospect then follows through and contacts you. Until the telephone rings, recommendations hold little value.


Three Steps to Referral Heaven

There are ‘Three Steps to Referral Heaven’.

STEP ONE – The person referring you identified someone who has a problem you may be able to solve.

STEP TWO – They talk to your prospect, who is interested in speaking with you.

STEP THREE – Your prospect is expecting your call.

Referrals are the best form of business information you can receive. Like a recommendation, they are more powerful than tips or leads because your prospect knows about you in advance of your conversation. Unlike a recommendation, you are in control of the conversation; rather than you waiting for the telephone to ring, your prospect is expecting your call.

Where companies go so wrong is for accepting tips, leads and recommendations when they could improve the quality of information they receive. If someone offers you a tip, try to find out more. If they give you a name and a number, ask if they could introduce you. Similarly, if they tell you they have recommended you, ask if you can be introduced.

After all, if someone likes and trusts you enough to share such information or recommend you, would they be willing to take the next step and make it easier for you?

That third step, that your prospect is expecting your call, makes such a difference. However well meaning an introduction where you can use someone’s name to open the conversation, unsolicited calls are very difficult to make. When someone calls you out of the blue, how receptive are you to what they have to say?

Few of us can honestly admit to being completely open when that happens, particularly if we are busy when the phone rings. We like to know in advance why people are calling us and that it is in our interest to have a discussion with them. Otherwise we tend to be, by nature, defensive.


The Difference a referral can make

One of the salesmen in my client’s company currently spends at least one day a week simply making sales calls. I asked him how many meetings he sets up each week on average as a result of this activity. He is getting three meetings.

I then asked how many of those meetings are converting to new business, he couldn’t answer, the number is so low.

While cold calling has a place in lead generation for many companies, I would argue that there is a much more efficient use of his time. He certainly isn’t boasting an impressive return on the time he is currently investing on the phone.

We discussed the alternative of spending a day a week building relationships with potential referral sources, deepening and strengthening the ties within his network. Surely from such activity, and with the focus on asking for the right introductions, he would be able to generate more than three meetings a week. And the chance of converting those meetings into business and, indeed, further referrals would be much greater.

Why am I so confident about this? It’s simple. Referrals introduce you to people who have recognised they have a problem you could possibly solve. Those people have been told about you by a third party who has recommended your services. That gives them greater confidence in using you, they are not entering the unknown.

I’m not, however, telling you anything you don’t already know. Just like my client, however, you may not be focusing enough on it within your business. With the right approach, how much of a difference could you make to your bottom line?

In Part Two of this article next month, we’ll look at who you can ask for referrals, how to make it as easy as possible for people to refer you and the importance of tracking the results.

When, if ever, is it time to quit building a relationship with a potential referral source?

Vena Ramphal has just asked me this question on Twitter. It's a very interesting question. Referrals come from people with whom you have built relationships over a period of time. In some cases the relationships may take years to develop. So how do you know when to focus your efforts elsewhere?

The first thing to understand is how a referral comes about. People are more likely to refer you, and provide you with quality referrals, the more they trust you and understand what you do. Some businesses need greater levels of trust and understanding before people refer them than others. For example, you will probably be more comfortable referring a printer you have only recently met than an accountant.

Everyone you meet and everyone around you is potentially a referral source. Whether they are clients or colleagues, family or friends, they will have their own network and will potentially come across opportunities to refer you.

A referral strategy, however, requires a degree of focus. While you can make efforts to build stronger relationships with everyone around you and communicate your needs more clearly to them, it makes sense to spend some more time developing specific referral relationships with a small group of people.

In each of these cases, you need to understand how much they want to and are able to refer you. In other words, how much do they trust you and understand what you do? These are the first two areas to focus on, unless they score highly on both these counts you can't start asking them for referrals.

To do so, you have to look at each person individually and ask yourself what will inspire them to want to refer you. How can you get them to trust you more? What do they need to know to understand better what you do and who you do it for?

Each of these steps take time. Some people in your network will be ready and able to refer you straight away. Others need a lot more attention.

It is this attention that provides the answer to Vena's question. In theory as long as a relationship is growing and remains positive, you shouldn't write off anyone as a referral source. However, if a lot of time and effort is required to develop the trust and understanding to a sufficient level for them to refer you, it is time perhaps to consider the return on that investment.

A harsh way to talk about relationships, perhaps, but a necessary evil. If you are investing your business time and resources in cultivating relationships with the intention of generating referrals, you need to have a clear vision of what success will look like.

Think about who people know and the conversations they are likely to have. Once they have reached a sufficient level of trust and understanding to refer you comfortably, are they re in a position to refer you on a regular basis to the people you want to meet? If so, carry on investing the time and effort to get to that stage. If they have a limited network and don't have the type of connections you are looking for, perhaps you should look elsewhere.

Ideal referral sources are in a position to keep introducing you to potential customers and other potential Champions for your business. Your referral strategy will be far more efficient if you develop strong bonds with ten key people who each refer you five or six times a year, than if you try to build relationships with 50 or 60 people who might refer you once.

I don't think you ever need to 'quit building a relationship with a potential referral source', or with anyone with whom you have a rapport. You may, however, choose not to spend as much time developing that particular relationship if the return is outweighed by the investment.

Asking clients for referrals

I've launched a new page on Facebook for people to share links, videos, blogs and ideas on networking and referral strategy. You can find the page at www.facebook.com/networkingstrategy.

One of the features of the new page is a Discussion section, where I have invited members to post questions and tips on networking and referrals.

At the weekend, Nikki Pilkington asked the following question:

Andy, in all the time I've known you, you've taught me that referral networking works - and it's true. But how would I go about asking current clients to pass me referrals without making them feel obliged or hassled? Thanks in advance for any insight.

Hi Nikki

Two bits of simple advice to get you started:

- Don't treat everyone as equal
- Keep it simple, make it easy.

1 - Don't treat everyone as equal

Many businesses institute 'get a referral' schemes targetting their clients as a general body, perhaps by offering an incentive if they refer, or asking for help 'if you are happy with what we do'.

Such impersonal schemes are easy to duck. If you're not asked directly and personally, it's not difficult to press 'delete', and very tempting when you are busy!

In other cases, businesses will ask clients individually, but use a general approach. The most frequent example of this is the set of questions at the end of every meeting. You know the form:

"Are you happy with what we did?"
"Do you know any one else who would benefit from this?"
"Can you give us their names?"

At best this approach provides a list to cold call, but can often make the client uncomfortable. After all, you have been there to help them, not the other way around.

Instead of these general approaches, think of each client individually. Ask yourself how much they would WANT to refer you (in other words, how well do they like and trust you?) and how well they understand HOW to refer you.

Focus first on improving these two areas where necessary. There's no point just asking for referrals from people who don't feel comfortable or able to do so.

When you have done that, you have two more questions to ask yourself. The first one is to ask who they know, which I'll come onto in a moment. The second is what can you do to inspire them?

There are a whole range of answers to the second question, running from simply asking to referring them and, in certain cases, financial incentives. The key is that the response is personal to each potential Champion, not a 'catch all' approach that catches none.

2 - Keep it simple, make it easy

The easier you make it for someone to refer you, the more likely it is that they will. A general request often produces nothing. If I asked you for an introduction to everyone you know who has a telephone, how much work would be involved for you helping me? Too much to justify you doing it!

A specific request that is tailored to that person's network is the best approach, hence 'who do they know?'. Be very clear about who you want to speak to and why and it will be much easier for them to make the connection.

The more personal your approach, and the more focused your requests, the more success you'll see.

I hope this helps.

Are you Referral-Aware or do you have a Referral Strategy?

I was discussing referral strategy yesterday with someone I had, appropriately, been referred to by a client. The company are a sales-focused company with a strong referral awareness, yet it became apparent that despite that awareness there is no strategy. That shortcoming is potentially leaving a lot of business untapped.

What was very interesting was the fact that well over 50% of new leads generated comes from cold-calling and, when asked, he was unable to name the company's top referral sources. While the company is referral-aware, the activity they follow is simply asking for a couple of referrals at the end of the meeting. Every member of their team knows that they need to do this yet, as I have discussed elsewhere, while that approach will produce some results, it is far from the most effective tool available.

Towards the end of our conversation we talked about the best ways and times to inspire our clients to refer us.

"It's interesting", he said. "We only ask our top clients to refer us once, and that's when we first meet."

A good referral has two key elements.

- Someone has to have a high degree of trust in you to refer you with confidence. The more they trust you and want to refer you, the more likely they will and that their referrals will convert and you will retain the ongoing business.

- The person referring you knows who you are looking to meet, why they need your help and how you can help them. In short, they understand how to recognise and convert opportunities to refer you.

When you first start working with a client the levels of trust and understanding are a long way short of where you hope they will be as the relationship between you matures. Asking just once, at the start of the relationship, misses the opportunity in two big ways. They are asking when people are less likely/interested in referring them and they are not asking when people like them enough to help and know how to.

Who in your network, or among your clients, knows, likes and trusts you enough to refer you, yet you never ask them? How many people have you asked for referrals before they've had the chance to build that trust or really understand your business? How successful were you?

It's not enough to be referral-aware. You need a referral strategy, or you'll be leaving business untapped and money on the table.

The Dangers of Promising Too Much

Do you offer people a reward for people who refer you? If it is a financial one, always be very careful how you do so and manage people's expectations. Otherwise, what you planned as an incentive to refer could backfire dramatically.

I'm sure you've heard the term 'under-promise and over-deliver'. This is perhaps never truer than in referral incentives. If you offer a cash incentive, do you know what people understand by that? It may be that you have a token 'thank-you' in mind, while your referrer is expecting a substantial commission. Is the risk of the subsequent disappointment worth the misunderstanding?

Unless you are entering into a formal commission or affiliate agreement where everything is clearly spelt out up front, it's sometimes best not to offer a financial incentive. Where people would refer you anyway, there may be no point.

Understand the motivation for people who refer you and focus on that. If they want to refer based on the fact that they like and trust you, accept that and thank them. It may be that they want to help their contacts and believe you can do that, if that's the case, make sure you treat their referrals in the best possible way and feed back to them.

If they are a business contact, they would probably appreciate you referring them much more than a cheque.

There are so many motivations that are stronger than money, and so few that can potentially harm a relationship more. Bear this in mind next time you offer a financial incentive to refer. If you still do so be very clear about what you are offering and communicate that effectively.

Making more Dough through referrals

During my talk to the Academy for Chief Executives Conference last week I talked about the importance of substantially exceeding clients' expectations if you want them to refer you.

Here's the problem. Most businesses recognise that referrals or recommendations represent their best source of new business. However, few do anything proactive about it. We employ cold calling teams, spend fortunes on pay per click and search engine optimisation, develop marketing strategies and invest in advertising campaigns. Yet we just expect referrals from our clients automatically.

There's nothing wrong with the marketing techniques above, they are all part of the marketing mix. Surely though, there's something wrong when the least resource goes into the most effective marketing channel.

This becomes a major issue when you realise that your customers don't refer you automatically, just because you give them good service. People don't work like that.

Look at the front page of the newspapers on most days and what you'll see is bad news. Bad news travels much more quickly than good, mainly because it gives us a story. Have a good meal in a restaurant and you might compliment the chef, have a lousy one and you'll tell all of your friends.

People will only relate good news if it's exceptional. In other words, if you give them a story.

The Conference last week was held at Warren House in Surrey. On the evening before the Conference Academy CEO Mike Burnage arrived with a guest. They sat in the lounge and asked the waiter for some Scones.

The waiter started to tell Mike that there were no scones available that day but stopped himself. "One moment please sir", he said and disappeared into the kitchen. A few minutes later he came out and said "Chef is making some fresh scones for you now". Twenty minutes later he re-emerged with piping hot freshly made scones.

How do I know this? Because Mike told me.....he had a story where Warren House substantially exceeded his expectations. How often would you expect a hotel that has no scones to make some for you there and then?

Not only did Mike tell me, I then relayed the same story to fellow diners that night, and again I told the audience from the stage the next day.

Give your customers a positive story to tell their friends, colleagues and family if you want referrals. Under promise and over deliver.

Above all, if you want to be referred, substantially exceed their expectations.

How Can I Help You? How to make generating referrals for your business so much easier

If someone asks you how they can help you, how clearly can you let them know how they can best make a difference to your business? If I was to ask you to tell me the ideal introduction for you, how effective would your answer be?

For most people, the response offered is normally ineffective. We all know our business really well but that makes it difficult for us to focus in on one key area when we are offered support. Yet, if you ask someone to do too much for you, the chances are that they will do nothing.

Why do I say that? It’s quite simple, the more vague or more broad your request, the more work there is for someone else to respond to it. Last week someone told me that they want to speak to anyone who owns a house. How many people do you think I know who are homeowners? How about you?

To meet that request, you have two choices. You can whittle down the list of homeowners you know to someone you’re happy to introduce him to; that alone requires a lot of thought and work and how do you make that decision? The other choice is to offer everyone we know as an introduction, probably very valuable to the person asking but a huge task for us and it’s not one, to be fair, that we are likely to complete.

In fact there is a third choice in circumstances like this, and it’s the one that most people will turn to. That choice is to do nothing at all as neither of the previous alternatives are very attractive.

How much easier would it have been if the selection process had been done for me, in the request? If, instead of being asked who I know who owns a home, I had been asked who I know who has just bought a new home? Instead of a long list of people I know, I would instantly have thought of just one or two people. Assuming that I am happy to make a connection, it would be a lot more likely that I would do so in these circumstances….wouldn’t it?

Always be as specific as you can in requests to your network, remembering that, if people find it easier to refer just one person based on a focused, clearly made description, you will gain far more than listing all of your wants and needs.

Whether you ask for people in a certain situation or name individuals or specific companies, this approach tends to produce much better results. Time after time.

Over 4 Million Reasons Not to Ignore People at Networking Events

A recent survey by the Department of Business and Enterprise found that over 99% of the 4.5 million businesses in the UK are classified as 'small', in that they employ fewer that 50 people. In an economy where the 'corporate' business takes the spotlight in the media and in our minds, small businesses are the engine driving us forward.

Yet, still so many of us still avoid speaking to other small businesses when attending networking events. We are looking to sell our services to bigger businesses, because that is where we know we can win good contracts and secure our futures.

If 99% of businesses are small, who do you think is more likely to attend networking events? Trying to find a corporate decision-maker at your local business lunch is likely to be a futile exercise. Take a moment and look at the people around you. They may not be your customers, but who do they know and who do they service? In many cases, it is the exact people you are looking to meet.

On Friday I was invited to open Albans Office Space ,a new serviced office centre for small businesses in St.Albans. The people who attended the event were local small businesses, many of them currently working from home and prospective tenants of the new centre. It would be so easy for someone looking to work with corporates to dismiss the other attendees as irrelevant to their business.

On the contrary, as a result of conversations at the event, I have the chance of introductions to a number of media figures and to a prospective new corporate client. Contacts that would come from a new start-up business.

Networking is not about selling, it is about developing yourself and your business with the help of other people, and doing the same for them. Combining experience, expertise, ideas - and contacts - for the common good.

If over 99% of businesses in the UK are small, it would be an unwise person who ignored their help.

Not Hunting but Farming

You may have heard about how networking is more about farming than hunting. Successful networkers sow the seeds of long-term relationships and reap the benefit over time, while failed networkers spend their time chasing down their prey at networking events, with the business card as their weapon of choice.

Now imagine that you are a graphic designer with a small business. You meet the head of a major local advertising agency at an event, someone who surely has a need for your services. How do you react?

It is lucky for Kelly Molson of Rubber Cheese that she is a natural networker and didn't launch straight into an elevator pitch when she did bump into the local advertising mogul eighteen months ago. For Kelly, it was more important that, despite a short conversation at the event, the two of them had a lot in common and 'clicked'.

Kelly and her new contact stayed in touch for the next year, talking on the telephone, exchanging emails and arranging to meet for coffee. At no point was business high on the agenda, they simply connected.

This week Kelly thought she should get in touch with her advertising contact as they hadn't spoken for a while. Five minutes after sending an email, Kelly received a reply, and one hour later her contact called her asking if they could meet as she wanted to discuss some business.

One of the designers at the agency is going on maternity leave and Kelly has been asked if Rubber Cheese can cover her absence.

Kelly is delighted with the outcome. "It's a completely unexpected result which I am really pleased about, but it wasn’t the reason I wanted to stay in touch.
We had made such a good connection initially and had so much in common; I really wanted to be her friend. After our meeting today I have even more respect for her and cannot wait to work for the agency."

Earning Referrals

Ask businesses how they get most of their new leads and best prospects and most will usually reply 'referrals and recommendations'. Ask them what strategy they have to maximise the flow of this new business and many will look at you blankly.

Over the years I have met many business people who will spend time and money developing marketing strategies incorporating PR, advertising, cold calling, exhibiting and other routes to market, yet leave referral generation to chance. The common response is "I let my customers refer me".

In his recent book, Truth or Delusion, Dr. Ivan Misner, founder of BNI, says,

"On several occasions, my coauthors and I discussed the point that I made in my book, The World's Best Known Marketing Secret, about how people were under the delusion that good customer service alone was enough to enable them to build their business through word of mouth. We shared stories about people we'd met over the years who had gone out of business waiting for good word of mouth to rescue them."

Dr. Misner discusses how good customer service is a prerequisite, we expect it. People are far more inclined to talk about bad news than good. Just look at the front pages of the newspapers most days of the week if you don't believe me.

It is not enough just to provide a good service and expect referrals. How many times do you attend a restaurant, eat good food, enjoy good service and then tell all of your friends about it? Compare that to the amount of times you have a bad experience, with poor food and rude service. You want to tell everyone not to go to that restaurant. Don't you?

Good service is expected when we buy something. That doesn't give us something to talk about. The fact is, if we want people to be our Champions, to advocate us to other people, we need to go that bit further.

This chart, used by the CEO expert Roger Harrop during a recent presentation I attended, illustrates this perfectly:



If you fail to meet people's expectations and they are dissatisfied with your product or service, as you would expect, they will leave you. If you meet their expectations and they are satisfied, that is fine but they are still prey to other people making better offer. To keep people buying from you, they either need to be very satisfied or you have to exceed expectations. But to make them Champions, you need to achieve both. Or as I put it, substantially exceed their expectations.

Give people a story to tell and you will win referrals. Just don't expect people to refer you simply because they are happy to buy from you.