You Never Know Whom They Know
Don't think a gardener can be a referral source to the rich? Think again. Discounting even one potential networking opportunity can be disastrous.
By Dr Ivan Misner, Founder & Chairman of BNI.
We don't walk around wearing signs displaying the names of everyone we know. It would probably shock you to learn about some of the influential people your best friend knows but hasn't told you about. You can't assume that your friend, acquaintance or referral partner doesn't have powerful contacts that can help you--or your business--in important ways.
Never underestimate the depth of the contact pool your fellow networkers are swimming in. There's a well-known story among referral networkers about a project management consultant who did business with large manufacturers and was asking for referrals. He was talking with a woman who owned a small gift-basket business, and she expressed interest in helping him. The consultant loftily informed her that he didn't see any possible way she could help him.
"Well, tell me what you do," she said.
"I go to manufacturers and help them with their processes. I'm sure you've never heard of any of the people I need to meet." He turned and walked away.
The gift-basket woman smiled and said nothing. She had a secret. Among her clients were several large manufacturing companies. She knew personally many executives at higher levels in these companies. Moreover, her father-in-law owned the largest manufacturing company in town. She was the best referral source the consultant could ever have, and he had rudely turned his back and walked away without realizing how much money he had left on the table. She smiled, but she wasn't going to be saying good things about him.
The value that you bring to a referral network or to a strategic alliance is directly related to the number of relationships you have and the quality of those relationships. In a typical referral-networking group of 20 to 40 people, the number of referrals that could be created, among all the possible contacts within one or two degrees of separation, is almost incalculable. And it doesn't take a corporate executive to connect you with another corporate executive, or a rich person to introduce you to another rich, influential person. That's not the way the world works anymore--and quite honestly, I'm not sure it ever was.
A friend of mine tells of a high-end property developer who was invited to a networking group's golf tournament as a guest to see what referral networking was all about. He came, but only because he loved golf. As a big-money developer, he "didn't need to network." He came to the awards dinner afterward only because his foursome won.
At the dinner, he happened to be seated next to a financial advisor who had grown wealthy through referral networking and become a property investor. Through conversation, the guest mentioned to the financial advisor that he was having trouble getting a bank loan on a big property deal. Hearing this, the financial advisor told him that he might be interested in investing. Within a few days, the two were negotiating a six-figure deal.
The moral of that story? Always pursue the networking opportunity of an event--you never know whom you're going to sit next to.
An associate of mine tells another great story about a financial advisor who received an enormous amount of business referred to him by a gardener on Cape Cod. Now, how can a gardener be a primary referral source for a financial advisor? Well, not only don't you know who they know, you also don't know how well they know who they know.
The gardener had an upscale clientele: big houses, rich people. He told the investment advisor that he would bring him some referrals. And the investment advisor thought: This person can't possibly help me. He's a digger in the dirt. He's a peon. What leverage, what credibility could this laborer have with his rich bosses?
Well, the gardener worked all summer long at these big houses. And who lived in these houses in the summer? The wives, of course. Who made the decisions about the gardens? That's right, the wives. So all summer long, the gardener was developing good professional relationships with the wives.
At the end of the summer, the gardener approached one of the wives and said, "Mrs. Gottbucks (not her real name, I hope), can I run something by you? You're doing well and I imagine you guys have a financial advisor--you know, an expert to help you with your investments. Can I ask you for some advice? See, I've managed to save up a bit of money, and there's this guy in my referral group who has a really unique way of packaging investments and getting a bigger return, and he says that by using article 32.3(e) in the tax code, I can save a lot on my taxes. He says he's saved dozens of clients thousands of dollars this way. Can you tell me if that sounds right? I suppose your financial advisor's saving you a lot of money that way, right?"
And the wife said, "Gee, I don't know. . .I'll have to check on that. By the way, what did you say your advisor's name is?"
Whether you're talking to a gift basket lady, financial advisor or gardener. . .remember, you never know who they know.
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Called The Father of Modern Networking by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI, the worlds largest business networking organization. His latest book The 29% Solution can be viewed at www.29PercentSolution.com.
Dr. Misner is also the Senior Partner for the Referral Institute, an international referral training company
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5 Ways to Kill a Great Marketing Plan
Are your marketing campaigns too creative? Here's what separates a marketing plan that works from one that doesn't.
By Brad Sugars
A good marketing plan is like a battle plan or a game plan; it should serve as a guide and a blueprint for the actions you need to take to grow your business. It should also have some flexibility because as you start testing and measuring tactics, you'll need to shift strategies from time to time, to capture or gain share in a particular market.
That said, a good plan doesn't need to be complicated. Jay Conrad Levinson (known for his Guerilla Marketing tactics) says you can create a great marketing plan in just seven sentences. Can such a concise document be effective? I would say from personal experience, yes. Levinson's simple approach has formed the basis for business coaches in my firm with great success.
There are some things, however, you should avoid when putting together your own marketing plan for your business. Remember, the best marketing is a synergistic combination of good strategy and tactics, and you can't do either one effectively without the other. Don't be tempted to stray from these fundamentals. Enticing yet highly subjective ideas like "image," "branding" and "creativity" are important marketing tools, but they're not as vital as getting a firm footing in the basics--which ironically start on the accounting end of things.
When putting together your marketing plan for the first (or umpteenth) time, here are some things to avoid:
Filling your plan with fluff: "Fluff" is anything not specifically related to a number, strategy or tactic. Generalities also qualify. Saying your target market is "everybody" or "adults 50-plus" isn't specific enough and will lead to problems down the road. Start to think in terms of a niche. Instead of "everybody," scale down to "young males 16-plus who play video games and ride skateboards." Instead of "adults 50-plus" turn this into "adult women at least 50 years of age who shop online at least three times a week."
Remember, marketing is all about buying customers. Imagine going into a grocery store and buying everything. You may want to, but in reality, your resources would never allow it. In marketing terms, this means buying your ideal customer with the resources you already have. So figure out who your ideal customer is and how much you can budget to buy that customer. Then come up with a plan and stick to it. Know that most of your competition won't have the discipline to do the same thing--or will follow a plan that has been filled with too much fluff.
Not doing the numbers: Marketing is all about math, and math is all about numbers. Taken a step further--business is all about numbers. If you don't know your numbers, you won't succeed in business. Creating any marketing plan without knowing how much it'll cost to acquire your customer, what your average sale needs to be, what your profit margins need to be and how many times your average customer needs to buy over a lifetime will set you up for failure. If you're going to run a $1,000 advertisement, how many leads and sales will you have to make to cover the cost of the ad, let alone make a profit?
Relying too heavily on creativity: Creativity is fine, and in my opinion, there's nothing more creatively fulfilling than succeeding in business. But focusing too much on creativity at the expense of tactics and outcomes can hurt your business.
A great example of this is the difference between the once-famous and now-defunct brand Pets.com and the still famous and thriving brand eBay. While Pets.com relied heavily on its famous sock puppet icon and national TV ad to drive its brand, eBay (under CEO Meg Whitman) took a very tactical approach to its business. By moving from its original model of a collectibles auction site to embrace a number of upscale markets, eBay was able to boost its average sale price, a key metric in determining its transaction fees. While the sock puppet was creative, boosting average sale price produced a tangible outcome. This is why it pays to know the numbers that ultimately drive your business.
Thinking marketing is only advertising: While advertising is part of any marketing plan, marketing is much more than strictly advertising. Marketing is not only how you sell your products or services, but also the way your receptionist answers the phone and how you set up your internal company culture. In addition, it's the strategic and tactical aspects of identifying and segmenting your ideal customer base, discovering your competitive edge and USP (unique selling proposition), setting your pricing strategy, sales strategy and promotional strategy, creating and tracking a system for repeat business, and testing and measuring all of these to leverage effort and maximize ROI.
Note that if your advertising doesn't yield an ROI, you've fallen into the "creative" trap, and that's both expensive and wasteful. You'll know you're in it when your vendors tell you, "Half of your advertising works, and half doesn't--you'll never know which half," or the even more famous, "it takes 17 weeks for people to get name recognition and then they'll start buying from you."
Forgetting to market to existing customers and prospects: For businesses that have moved beyond the startup phase, there's no better or quicker way to massive growth than your current customers and "warm" pool of prospects. Generally, it costs up to six times more to get a new customer than to sell something to an existing customer. So if your plan doesn't include initiatives to tap into your current customers, you're missing out on a huge untapped resource.
Many marketers get so caught up in chasing new markets or customers, they forget the goldmine that exists within their current business. Don't make the same mistake; develop strategies to tap into what could be your most valuable--and profitable--resource.
As the end of the year approaches, take some time to start setting some objectives and clarifying how to make next year your best and most profitable yet. A large part of that success will depend on the actions and decisions you make now in the form of your marketing plan--and avoiding the costly mistakes that cause most businesses to abandon their efforts early and often.
If the metaphor "marketing as warfare" fits, know that wars are won by attrition. If you can out-perform, out-strategize and out-discipline your competition, you'll win more of your own company's marketing battles.
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Brad Sugars is Entrepreneur.com's Startup Basics columnist and the writer of 14 business books including The Business Coach, Instant Cashflow, Successful Franchising and Billionaire in Training. He is the founder of ActionCOACH, a business coaching franchise.
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Book of the Month
Truth or Delusion
Truth or Delusion, Busting Networking's Biggest Myths co-authored by Ivan Misner, Mike Macedonio, and Mike Garrison.
In this book we tackle 49 questions and/or myths about networking and show how they are in fact "truth" or "delusion".
Truth or Delusion? If you provide good customer service, people will refer business to you.
This one's a delusion. Many, many entrepreneurs think that good customer service is the number-one way to cultivate word-of-mouth marketing and referrals. But it's not! It's a good policy and one that's vital to the health of your business, but it's not at the core of building a referral-based business.
People have come to expect good customer service. In fact, they demand it in today's marketplace. When considering customer service and its role in the referral process, it unfortunately works much more effectively in reverse: People are more likely to talk about your business when they're unhappy with you than when they're happy with your service.
So if you want to build your referrals, you must actively cultivate your referral sources and not rely on good customer service alone.
Order your copy now
Copies now available for only $30 plus $5 for postage
BNI Tasmania is embracing the international theme "Raising The Bar" in 2009.
On a local level we can all contribute by getting back to basics.
How can you do this ?
Attend, Refer, Invite -
these are the three key performance indicators of all BNI members. Look at your personal PALMS report and ask yourself.
Are you attending every week or making sure your substitute does ?
Are you finding referrals for your fellow members?
Are you telling your fellow members what you're looking for ?
Are you doing dance cards with other members ?
Are you closing business regularly?
Are you inviting visitors as potential customers, potential members or as people who may know someone who can fill a vacant category in your chapter ?
Do your fellow chapter members know what your goals are for 2009? (Only written goals are ever achieved)
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