Sunday, March 25, 2007

Week 30 - Not All Customers are Created Equal

Your existing happy customers should be your number one source of high quality referrals. They should be sending new customers to you on a consistent basis but not only that, the right type of customer. You might already have a referral plan in place but let’s have a look at some rules for attracting the best prospects consistently:

Rule 1 – Know exactly which type of customer you would like to serve and therefore attract.
Rule 2 – Be crystal clear about the experience that you provide. Create awesome experiences every time a valued customer deals with your business.
Rule 3 – Always follow up making sure to thank the referrer for their gesture.

Asking for a referral is a bit like asking someone out on a date. Many people find it uncomfortable so the question becomes, “how can you make it a pleasurable experience?” Let’s take the date analogy one step further and assume the person you want to ask out is a friend of a friend. Now just asking is one thing, you certainly won’t get anywhere without that – but what about the role that your immediate friend plays? Their perception of you and your suitability for the person you want to ask out will probably end up being the determining factor about whether the date happens or not. The same goes for referrals in business. If you have a strong relationship with your customer and provide them with awesome experiences every time they walk through your door would they really see the request for referrals as rude or unwarranted? No.

Now let’s get back to the rules. First of all, what will happen if you tell your friends you just want to date anyone? That’s right; they will send you everyone and anyone. What if you said you were looking for a well educated, funny person with blonde hair? You can see that knowing who you are trying to reach is very important – otherwise your referral system will end up driving you mad because the people calling will not be the “customers” that you seek!

Second rule: Generally speaking your friend has to know you or what “experience” you will likely provide – otherwise why would they give you their friend’s contact details? When I say “experience” I am using the business analogy. What I mean is they know you and your personality and they probably know the impact you would have upon meeting the other person. Have you ever asked someone you knew only slightly to list five of their best friends with phone numbers so you can ask them out? I don’t think so! But every day businesses try this cold approach. Tell us who your friends are and we will bug them for you – we will even tell them it was you who gave us their number! Dumb.

Final rule: Let’s assume the date was a screaming success. Would you normally call your friend and thank them for the introduction? Again in business we tend to take this area for granted – we are happy to hear that our new customer came from the same place (again), but often doing little or nothing for that person. Now recognition is a powerful thing. You don’t have to pay the referrers. Unlike business to business referrals, personal customer referrals should be based purely on your customer being so thrilled with your service they are desperate to let others know. Your challenge using the rules above is to guide them so you get the best referrals for your business and then nurture, thank and recognize. Then the cycle begins again.

Sunday, March 11, 2007

Week 29 - One Person Could Help Grow Your Business Overnight

There is amazing power in having your product or service endorsed by someone who already has your prospect’s trust. Put simply, there are many people in your life today that you would trust if they recommended something to you. It might be your local priest, your golf coach, a teacher or your next door neighbor. If you can find one of these “trusted” people that is respected by a large enough group of your potential prospects, then you have identified a very good center of influence.

Most business owners spend all of their marketing dollars trying to reach “cold prospects” that have not been previously conditioned to accept your company. Educating prospects through a trusted third party prior to your arrival will improve your conversion rate rapidly.

A centre of influence is far different to say, a mailing list that you can buy or rent. These lists of names have been compiled from various sources - some trusted, some not, some not even knowing how they ended up on the list! So you will not get the same effect from this method of contact.

Stop now and make a list of all Centers of Influence you can think of? You are looking for a central source that has the trust of a group of people.


  • Your family doctor could write to you endorsing the services of a local personal trainer.
  • A local community leader could write to households with children notifying them of a new child care centre that is built to new standards of excellence and run by trusted professionals.
  • A swimming club president could arrange a letter to all swimming clubs in the district on behalf of a trusted swimwear manufacturer, urging all clubs to purchase through them.
  • An accountant could write to their entire client base introducing an investment product provided by a trusted company.

Make sure you offer real value, not "ME TOO".

Centers of influence need to be used in conjunction with other marketing and advertising initiatives and should not be relied upon as your sole source of prospects. Every time we get onto a plane the airline endorses a rental car company, but because all of the airlines are doing the same thing and there are so many other ways to get a good deal, the program really lacks punch. Plus, in most cases, the relationship with the airline is not an intimate one.

Systematic Referral Programs

Many business owners say that their biggest source of sales or work is referrals, or that their reputation is what gets them all of their business, but how many work this source of leads proactively?

It is great to be proud of your record of providing a high quality service or product, but once again, you should not be relying on “chance” to get referrals. If you do a good job, people will talk and you will get referrals, but we are talking about being proactive, seeing every new customer as 1 new customer + 2 referrals. Put this equation into your employee handbook alongside the information on the lifetime value of customers:

Every customer I speak to or meet is potentially worth $X (insert your lifetime value figure) to our business over five years.

Each time we thrill a new customer, we will ask them to refer two customers of equal quality.

Friday, March 09, 2007

Random Quote - Fresh Thinking

"The only way to change the world is to imagine it different to the way it is today. Apply too much of the wisdom and knowledge that got us here, and you end up right where you started. Take a fresh look from a new perspective and get a new result."

J. Allard - Microsoft, founding team for Xbox, Zune and famous internal Internet memo.

Sunday, March 04, 2007

Week 28 - Endorsements. It's Easy to Create Your First New Income Stream

When setting out to create an endorsement program for your business you need to test and measure. What things could you test? You could test various offers of services. You could test mailing different age groups within the customer base, you could test sending to more females versus males, you could test sending only to customers who reside in the surrounding area, you could even test the paper color when you mail!

Stop at this point and make two lists.

  1. Who already has my customers? (Think about all the possible products or services that go BEFORE yours – example, a tradesman can seek out an on-site manager who looks after 30 apartments in an apartment block or an office furniture company looks for office renovation specialists who need to replace interior fittings).
  2. Whose products and services could I sell to my customers? (Think of all the products or services that could be of use after using your product or service – example, could an in-ground pool business offer a 3 year program of pool maintenance and chemicals with every new installation?

Implementing an endorsement program

Once you have decided what products and services you plan to add to your offering you need to systematically promote them. As has been stated numerous times already, if the program is left to chance it will be a failure. Try to build the extra product selection into your sales questionnaire and ensure that all employees are fully trained on the benefits of the extra offerings. A word of warning, the occasional customer will see your offerings in a cynical light. They might suggest that it is purely the extra profits you make which are motivating you but you can turn this around. For example:

A mechanic arranges an insurance appraisal for any car going through the workshop at no cost or obligation.

Cynical view: they are trying to sell me expensive insurance.

Turn it around: as a valued customer we want to ensure you are getting the absolute best deal possible for that make and model of car. We may even save you money overall, but our motivation is to make your motoring experience a more pleasurable one. No obligation.

A gym offers special pricing on shoes, massage, personal trainers, skin care, surgeon, business coaching, travel, weight control programs, sporting events and organises social clubs.

Cynical view: they are trying to sell me things I don’t need.

Turn it around: as a valued member, we are trying to ensure that you are getting the best value for your membership through the use of appropriate clothing and footwear. Further, being fit and healthy is only part of the story. We help you enjoy the benefits of your training long after you have left the gym! No obligation.

Think complementary services; what else could you offer whilst you have your customer’s attention? Flip it around, could others give your product away as a premium add-on to their product or service? What about a sample of your product and service? For example, if you have a window tinting business can you do a wholesale deal with a car dealership where they market the tinting as a “free” extra (having paid you a wholesale rate of course)?

The power of an endorsement cannot be overstated, especially when compared with other advertising and marketing methods. You will need to seek businesses that have the trust and respect of their customers. In other words, think carefully about the nature of the relationship between the customer and the business serving them, it needs to be strong.