DOING BUSINESS IN CHINA: The Company You Keep

Doing Business in China with Dan Paulson

A recent survey by Healthy Companies International states that three out of every four CEOs working in a Fortune 100 company today have spent at least two years in a senior leadership role. Larger companies understand the importance of having international experience, but it shouldn’t matter what size your business is. In today’s business world, and in the foreseeable future, we will require a better understanding of business from a global perspective. Some of the greatest opportunities for business today may exist outside country and it all starts by the relationships you keep.

In business, relationships are everything. Relationships are your most effective marketing tool. They open up networks. They allow you to connect with new ideas. You can get new business, from a referral, or you can increase your work with a client just through the relationships you keep.

In China, relationships are critical. Without good relationships, you may find it difficult to do business there. China is a country rich in culture and much of that culture is reflected in the way they do business. Your success in China depends on the relationships you build. Here are some things to consider:

Enter the market with a good strategy. Know what you want to achieve. Have a clear vision and an understanding of what you need to do to get there. Many opportunities exist in the world market. Seize these opportunities, but do so with a plan. If you don’t, it could be costly.

Know the connections you need. In China, government connections are just as important as business connections. Rules and regulations change often. Having a connection into different government entities can help you cut through the red tape and get your business going. Other countries have their own rules as well. Find the local resources to guide you. Additional relationships that are good to have are in market research, advertising, logistics, travel, health care and manufacturing. Find the resources necessary to build these connections. It may involve a few trips and several meetings, but it will be well worth it. Find someone who can guide you through the process to help you get the right connections faster.

Connect with other economic development centers. Be sure to check out the US Chamber of Commerce or other economic development groups. In addition, find the local chambers of commerce and seek to build relationships there. In larger cities such as Beijing, Shanghai, and Hong Kong, these Chambers can have a great deal of influence. They can also be another resource to help you start your growth oversees.

Be a capitalist. We can learn so much from other cultures on doing business, both the good and the bad. You want to be associated with reputable business partners so it is necessary to do your research. Have other trusted partners help you as well. Get someone who will look out for your best interests. In China, they are extremely capitalisitic. Poor relationships may help your connection make a buck, but could leave you out in the cold. We often fail to recognize cultural differences and interpret them correctly. Think win-win, but know what’s in your best interest as well as the interests of your client. Understand the cultural differences and how that relates to capitalism for you and for them.

Treat business like a marathon, not a sprint. Learn, learn, learn. Take cautious steps in the beginning. Try not to do too much too fast. The Chinese culture has been around for thousands of years.. It can be a difficult market to break in to. Pace yourself. Take the time to understand how and where to play. Know what you need to do to make in-roads to the market. Find those who can help you grow. Often these people are nationals. They understand the culture the best and can help you maneuver through the business challenges. Seek out loyal partners.

Bring value to your business relationships. In China, business partners, associates, and network connections all seek value in the relationship. Not too different from here, you need to be able to answer the question, “What’s in it for me?” Know what value you bring and use that to start building trust.

Following a few simple steps here can get you on your way to business expansion. Knowing the culture will make a tremendous difference in your success. Whether your expansion plans include China or another part of the world, be prepared to do business a little differently than you have in the past. It’s the little changes that can spell the difference between success and failure.


For more information, please visit Dan's TNNWC Bio.

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DOING BUSINESS IN CHINA: The Company You Keep

CONNECTING IS NOT ENOUGH: The Power that Lies Within

Connecting Is Not Enough with Andy Lopata

I have held my personal account with one major UK High Street Bank for over fifteen years now. My business account is currently with the same bank, but this wasn’t always the case.

It used to be that our business would bank with one of their competitors. Our offices were close to a small town with one main street in which all of the major banks had a branch. Quite often I would go into the main street and visit one or both branches of the two banks I dealt with. I was known by the staff at both.

Occasionally I would be asked by my personal bank to verify my details. One of the questions they would always ask me was to confirm that my occupation was still "Managing Director." They never asked me where my business banked.

The staff in the branch for our business account knew that I would come in to pay in cheques for the business or for other related matters. They never asked me where my personal account was held.

Hundreds of millions of pounds worth of business must be lost every single year by employees not looking out for opportunities for their colleagues elsewhere in the same company.

Go to a referral-focused networking group and listen to the presentation given by the solicitor present. In most groups of this nature they will have locked out any other solicitors from joining. Yet if they are an employment lawyer, it is highly unlikely that you will hear them talk about litigation, mergers and acquisition, or family law. Week after week they will only focus on their own area of speciality, not referring to other divisions within their firm.

I have discussed elsewhere how trust, understanding and opportunity to refer are the key foundations to enable good quality referrals. Then where better to start than within your own firm? Yet, cross-selling is overlooked by many firms whose staff are more likely to compete than look out for each other.


Trust and Understanding

Part of the problem lies in the relationships between different parts of the same company. While team-building and meetings may be in vogue, less effort is spent encouraging different sections of the same company to interact. We talk about trust and understanding between people across your network, how strong are those relationships with people working under the same roof as you?

After I left university, I spent four years working in the Civil Service. The culture of the large departments within which I worked was very much one of silos. Each team worked in a sectioned off area. When lunchtime came my colleagues would put their work to one side, open up a pack of sandwiches and eat in the same seat in which they’d been working all morning. They would spend all of their time not just in the same department but with the same person with whom they’d worked with all day.

I bucked the trend. It’s funny to look back now at my behavior considering what I do for my living now. While all of my colleagues remained in their seats during lunch, I would go out with friends from other departments. I was considered quite odd, yet it was ironic how I would get more support from elsewhere in the department when I needed it!

On Wednesday mornings our offices would open to the public thirty minutes later than normal for "staff training." Traditionally these sessions would see each team in its own silo covering areas of consequence to them. I started visiting other teams and telling them about what we were doing and we invited them to join our meetings to do the same.

In my experience, too little of this happens in business now. Teams are kept apart from each other with people generally socializing with others within their own department. Even in smaller businesses where people from across the company sit close together and are more likely to socialize with each other, it’s not common for people to discuss their jobs and goals.

Companies who focus on building connections between different parts of the business and educating their staff in more than just their own job will be able to tap into a wealth of opportunities.

Social events within the firm are great opportunities to mix. Working with a property development company I asked the participants on my workshop to list the networks they belonged to. A number of them had the company’s "Sports and Social Club" at the top of their list.

Internal networking events, such as women’s networks, also offer great opportunities for staff to mix and learn about each other. If you have the opportunity, go to these and make sure you speak to people from other parts of the business, rather than just those you know. Find out about their role, their challenges, and who they deal with.

Most importantly, find out if there are opportunities for you to learn from each other, share experiences, work on the same projects and whether you are targeting similar clients.

Communal areas such as the staff canteen also offer the opportunity to build your internal network. If you are in the habit of finding the empty table and eating on your own, or sitting with your colleagues all of the time, break that habit and ask others if you can join them. Get to know other people in your own firm and find out how you can help them achieve their goals.


The Trouble with Targets

Another big block on generating referrals internally is the way people are rewarded for new business. Although a number of companies are now changing, in many cases it is just the salesman responsible for the client who gets rewarded for the business.

If the targets and rewards are dependent on just one area of work, why would you focus any time and effort elsewhere? Companies need to recognize and reward efforts to create connections that may impact another department or division if they want to stimulate more referrals internally.

This highlights one of the main reasons why so few referrals come in from clients. In many businesses the roles of new business generation and account management are separated. The person who deals with the client on a day-to -day basis and who is best placed to ask for referrals has no responsibility and receives no reward for asking for those referrals. Meanwhile, the person who does have the focus and stands to benefit has no further influence with that client.

Put simply, personal goals lead to selfish behavior and restrict the flow of referrals internally. This problem gets reinforced in times of economic turbulence, as people become more concerned with protecting their own job and meeting their own targets, perhaps at the expense of the firm’s wider interests.

Personal targets and rewards also reinforce narrow "tunnel" thinking, with people solely focused just on their own sale and bonuses.

Companies need to break out of this narrow thinking and inspire their staff to refer each other. Bonuses and commissions should be in place for introductions to other departments, a share offered in business won to everyone involved irrespective of their job description.

It’s not just the sales team who should be included. PAs (personal assistants), receptionists and customer service representatives all have jobs where they deal with the company’s clients and suppliers. Everyone who works there has their own personal network.

Whenever I work on referral strategy with companies, I try to encourage them to send staff from across the business on workshops, not just the people targeting new business. In one case the Financial Director came on a workshop. He had never passed a referral over to the sales team before that session. In the next two months he passed seven.

Cross-sales and cross-referrals need to be taken seriously and encouraged in any referral strategy. Without it, companies are just throwing money away.

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Are you struggling to put an effective networking or referral strategy into place? Do you want to know more about how to ensure you get the maximum possible return from your networking?

Andy's new Audio programme, "Networking in Ninety Minutes," will give you the tools you need to make the most from your networking. Available in CD or mp3 format here.
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Andy Lopata's LinkedIn profile
Join Connecting is not Enough - Andy Lopata's Facebook Page


For more information, please visit Andy's TNNW Bio.

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CONNECTING IS NOT ENOUGH: The Power that Lies Within

CONNECTING IS NOT ENOUGH: Ten Tips to get your referral message across (Part Two)

Connecting Is Not Enough with Andy Lopata

In last month’s first five tips we looked at the importance of knowing exactly the help you need when asking your network for referrals, and how to make specific requests that people respond to.

The type of information you share, the language you use and your consistency are also key, as we now go on to explore.


Tip Number Six - Keep it simple

People so often succumb to the temptation to load their champions with information to help them refer us. We want them to recognise every possible opportunity and answer every objection we can see coming.

Remember two things. First of all, they are simply our gatekeepers, making the introduction. They are not there to sell for us. Secondly, the more you give people to remember, the more they have to forget

Try using ‘The Twitter Measure’. Put your message into 140 characters. Edit, edit and edit some more. Does it still make sense? Could someone understand who you want to talk to and why?

Be brutal with your information. What do people NEED to know? Ensure you give them just enough to initiate the connection and then pass the rest to you.

Also consider their own background. Champions from your own industry or related areas may well need or be able to deal with more information than a friend who has the right connections but who doesn’t necessarily understand what’s involved.


Tip Number Seven - People love a story

Once you have worked out what your message is and the key information people need to understand, make it easier for them to do so by wrapping it up in a story. Case studies bring ideas to life and also add credibility to your request, proving you've solved similar problems successfully in the past and it’s not just an idea or concept.

Case studies also help people understand how to recognise a prospect and how you work with them to overcome their challenges and put the theory into context. Not only that but they are memorable and more easily recalled and repeated.


Tip Number Eight - Avoid Jargon

This is the trap that we can all easily fall into. It’s all so easy to lapse into words, phrases and references that we understand as part of our everyday language but which make no sense to people from outside our industry.

Do you know what terms you use that are jargon for someone else? Take the ‘Ten Year Old Test’. Tell a ten year old child what you do and then ask them to explain it back to you. Finding out how much they have been able to understand and relate back will give you a good indication of how well you are getting your message across.

The difference between a child and an adult is that the child will ask you if they don’t understand something. Adults are frightened of looking foolish and are more likely to nod politely and then take no action because they’ve missed the point than ask you to explain terms they’ve not understood.

Tailor your message to the person's experience. If it’s someone from your industry you can be far more complex in your explanations than someone who doesn’t have the relevant experience.


Tip Number Nine – Help people learn over time

As we’ve already discussed in a couple of these tips, you don't have to get everything across in one go. If you have someone who wants to refer you and has ample opportunity to do so, you’ll have plenty of time to educate them and help them to see a host of possibilities.

The fear of missing out on opportunities can lead to us trying to get across all of our products, services and prospects at the same time. However, focus on one request at a time and let people build up their understanding of how to help you gradually. Each individual request you make and referral they pass will build their knowledge.


Tip Number Ten - Manage how you are perceived

Help people to refer you by managing your reputation effectively. We often talk about ‘it’s not what you know but who you know.’ But I would argue that it’s far more important to be aware of who knows you and what they say about you.

What do you want people to say about you? We started off by looking at knowing who you would most like to be introduced to. It’s also vital that you understand what your general message and image should be. Focus on who you want people to be talking to about you, what you want them to be saying and how you can build the right public image.

Consistency is the key to ensuring that the right message is repeated. Whether that’s ensuring that your message and conversations are consistent with each other or your appearance and actions are consistent with the image and reputation you crave, you need to make sure everything fits.

Look at how you are getting your message out there at present and consider changes you could make using the ideas outlined above. If you’re not getting sufficient referrals at the moment, find two or three things you can change immediately and put them into place.

Approach people and ask for referrals. Be specific in your requests and keep the information simple and easy to understand. Put these ideas into practice and watch your flow of referrals increase with ease.

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Are you struggling to put an effective networking or referral strategy into place? Do you want to know more about how to ensure you get the maximum possible return from your networking?
Andy's new Audio programme 'Networking in Ninety Minutes' will give you the tools you need to make the most from your networking. Available in CD or mp3 format here.
Andy Lopata's newsletter archive
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Join Connecting is not Enough - Andy Lopata's Facebook Page


For more information, please visit Andy's TNNW Bio.

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CONNECTING IS NOT ENOUGH: Ten Tips to get your referral message across (Part Two)

CONNECTING IS NOT ENOUGH: Ten Tips to get your referral message across (Part One)

Connecting Is Not Enough with Andy Lopata

Building a strong network to help you generate more business is just the first step in an effective referral strategy. Once you have established and developed relationships with those people in your network, you then need to build their understanding of how they can help you so that they can become effective champions for your business.

This is where so many people fall down. They network relentlessly trying to find the referrals they need when they already have all the necessary connections. They’re just not getting their message across well enough to help their network help them.

If you struggle to get the connections you need from your network, read on. Hopefully the following tips will give you some ideas about how you can change your approach and get your message across in a way that will make it easy for others to refer you.


Tip Number One: Know what your message is


It sounds a bit obvious, doesn’t it? Yet I consistently ask audiences at my talks and delegates on my workshops who their ideal referral is and so few actually have a clear idea. But if you don't know, how can anyone else be expected to understand?

Spend some time working out who your ideal referral is and who you’d like to be introduced to. Your thoughts would naturally turn to prospective clients, yet it may be far more valuable to be introduced to someone who can provide links to numbers of prospects, or add other value to your business. Where do you most need support at the moment for example?

Most businesses have a range of products and services they offer. If this describes you, who are the key connections you need for each revenue stream? Develop a ‘referral mix’, and have a clear picture in your mind of each one, in case the opportunity arises to ask for the connection.


Tip Number Two - Ask the right question of the right person


Once you understand your referral mix, you need to ask people for the referrals they are best placed to offer. After all, different people have different networks.

A few years ago I started writing for The Sun newspaper as a result of a referral from a former top newspaper editor. When he asked how he could help me, I targeted my response to an area I knew he was familiar with and where he was well-placed to help. A little bit of thought can make a huge amount of difference if you then know you are asking the right questions.

You can also do your research in advance in some cases, where appropriate. If you are meeting with a prospective champion and you know referrals may be on the agenda, why not look at their LinkedIn network in advance to see who they know and how they might be able to connect you?


Tip Number Three - Be Specific


If you are struggling to get referrals from people who want to help you, it may be that they simply don’t understand who you want to talk to. That may seem strange to you, but you know your business better than anyone else.

Paint a picture in people's minds of the people you want to meet, companies you want to talk to. The clearer the picture in their mind, the fewer the number of people they know (but above zero!), the more chance there is that they will be able to connect you.

We tend to assume that the more examples of potential referrals we give our champions, the more chance that they will know someone and refer us. However, the reverse is true. The greater the number of potential referrals they can pass, the more filtering they have to do. You have to do the filtering for them

For example, if you sell least cost telephone routing you could ask people for connections to anyone who has a telephone. I’ve heard that request made several times! Yet how much time do you think people would take to make those referrals? Will they speak to everyone they know who has a phone?

It’s unlikely that they would, so they’d have to decide who to talk to. It’s more likely that they’d simply pass on the opportunity to help.

Make it easy for people to follow through and make your request specific and focused. If they know one person and can easily have the conversation, it’s much harder to say no.


Tip Number Four - Ask Directly


I would venture that the most common reason people don’t get referrals from their network is quite simple….they don’t ask for them! It’s often said that if you don't ask you don't get, yet we just sit back and expect our network to refer us.

Many businesses will admit that their best source of new business is word of mouth and recommendations, yet their strategy is a passive one, waiting for customers to refer them rather than asking. However, we are far more likely to talk about negative experiences than positive ones. You need to substantially exceed people’s expectations if you want people to refer you on their own initiative.

Don't assume people know how to help you, or even think about doing so. Look at your closest network and best clients and ask yourself who would be happy to help you but who you've never asked. Sit down with them and explain the connections you are looking for and ask for their help. If you’ve selected wisely you should be delighted with the results.


Tip Number Five - Put yourself in others' shoes


The very nature of referrals dictates that, more often than not, you won’t be present when the referral takes place. It’s important for you to anticipate the conversation between your champion and prospect and prepare your champion with the information they’ll need.

After all, you can’t simply expect your champion to ask the other person if they’d like to meet you without the prospect asking why!

A common mistake is for people seeking referrals to explain why they want to meet or work with a prospect. They are only seeing things from their own perspective. The hard truth is that your prospect doesn’t care about what you want. They are interested in their own needs and self-interest.

More specifically, if they are going to want to speak to you, they need to perceive that they have a problem you can solve. After all, we are in business to solve people’s problems.

Help your champion understand how to communicate the problem your prospect is facing, the solution you offer and how they will then benefit from the eradication of that problem. If you can get that right, you won’t need to be there to make the sale.


Next month, in the next five tips, we’ll look at the importance of keeping things simple, telling stories patience and managing your reputation.

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Are you struggling to put an effective networking or referral strategy into place? Do you want to know more about how to ensure you get the maximum possible return from your networking?
Andy's new Audio programme 'Networking in Ninety Minutes' will give you the tools you need to make the most from your networking. Available in CD or mp3 format here.
Andy Lopata's newsletter archive
Andy Lopata's LinkedIn profile
Join Connecting is not Enough - Andy Lopata's Facebook Page


For more information, please visit Andy's TNNW Bio.





Published by THE NATIONAL NETWORKER Newsletter. All rights reserved. Subscribe Free For Your TNNW Newsletter and THE BLUE MONDAY REPORT! - Click HERE.
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CONNECTING IS NOT ENOUGH: Ten Tips to get your referral message across (Part One)

CONNECTING IS NOT ENOUGH: The Anatomy of a Referral, Part 3

Connecting Is Not Enough with Andy Lopata

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

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Are you struggling to put an effective networking or referral strategy into place? Do you want to know more about how to ensure you get the maximum possible return from your networking?
Andy's new Audio programme 'Networking in Ninety Minutes' will give you the tools you need to make the most from your networking. Available in CD or mp3 format here.
Andy Lopata's newsletter archive
Andy Lopata's LinkedIn profile
Join Connecting is not Enough - Andy Lopata's Facebook Page


For more information, please visit Andy's TNNW Bio.





Published by THE NATIONAL NETWORKER Newsletter. All rights reserved. Subscribe Free For Your TNNW Newsletter and THE BLUE MONDAY REPORT! - Click HERE.
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CONNECTING IS NOT ENOUGH: The Anatomy of a Referral, Part 3

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

Connecting Is Not Enough with Andy Lopata

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.

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Are you struggling to put an effective networking or referral strategy into place? Do you want to know more about how to ensure you get the maximum possible return from your networking?
Andy's new Audio programme 'Networking in Ninety Minutes' will give you the tools you need to make the most from your networking. Available in CD or mp3 format here.
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For more information, please visit Andy's TNNW Bio.


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

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

Connecting is Not Enough with Andy Lopata

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, 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.

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Are you struggling to put an effective networking or referral strategy into place? Do you want to know more about how to ensure you get the maximum possible return from your networking?
Andy's new Audio programme 'Networking in Ninety Minutes' will give you the tools you need to make the most from your networking. Available in CD or mp3 format here.
Andy Lopata's newsletter archive
Andy Lopata's LinkedIn profile
Join Connecting is not Enough - Andy Lopata's Facebook Page


For more information, please visit Andy's TNNW Bio.




Published by THE NATIONAL NETWORKER Newsletter. All rights reserved. Subscribe Free - Click HERE.
The National Networker Companies
Forward/Share This Article With Colleagues And Social Media:

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