Ask then Ask Again

I teach a series of Networking Classes to beginning Networkers here in Indiana.  As we were summing up the class I asked each student, what is the most important thing that you have learned in this program?  Shane Helvie, EyeDesign Graphics & Advertising Co., summed it up beautifully.  He said, “What I learned is to build a great network you have to learn to ask twice.”  “Ask, how can I help them, then ask for what I need.”  Right on target.

Asking others how you can help them and finding ways to do it, is how you will build credibility with potential referral sources.  Many times when you ask someone the famous question, “How can I help you?” they often have no answer at all, and if they do have an answer then it is the usual “send me leads” statement.  They have not really given much thought to what others can do for them.  In this case, you may want to make some suggestions on how you might be able to help them.  Remember to use the 18 tactics; here are a couple of easy ones that you can always put to use.

            Invite them to an event with you

Ask them to guest write an article in your newsletter

Send their information in your next client mailing

Introduce them to a possible referral source

Quote them in one of your articles as an expert

 There are a great many things that you can do beyond, giving a referral or a lead.  Be creative, look outside the box.  Once you have helped someone else, then you will be ready to ask the second question.

Tracking Income by Referral Marketing

Q: How do I accurately track my referral income?

A:  We at the Referral Institute know that chances are, since a professional is asking this question, that they aren’t completely satisfied with the results of their referral marketing.  If this sounds like you, don’t feel alone.  Most business professionals stress the importance of referrals, yet, have reactive (if at all) strategies for finding, asking and receiving the referrals they value so highly.  First, look back at a recent period of sales revenues from referrals and all other sources. Then project what you expect revenue to be as a result of your referral marketing campaign.

For an individual business person, as well as for an organization, an essential part of any marketing plan is measuring the results.  Your Referral Marketing Campaign is no exception.  To use your sources wisely and efficiently, you’ve got to know whether and how well the Execution of your Referral Marketing Campaign is working, how you can change it to improve current and future results, and how much your investment of time and money is earning you.

It's critical to track your income sources, whether from referrals, advertising, walk-in or drive-by traffic, or elsewhere. But before attempting to track the results of something, you must first set goals to shoot for.

·                          How many referrals do you expect to get?

·                          How much income do you expect to realize from these referrals?

·                          How many referral sources will you need to achieve these projections?

You could guess at the answers to these questions, but there's a better way-a systematic method of setting your goals using your experience as a base.   

Your forecast should be based on four factors: the number of referrals you expect to receive, the dollar value of the referrals you expect to get, the percentage of your business you expect to result from referrals, and the number of sources you'll need to achieve the expected number and dollar value of referrals.

At the Referral Institute we do this by emphasizing ‘proactive’ referral systems that you can measure, customize and predict the outcomes for.

First, what if referrals never had to be a surprise again?  What if you knew everyone who was going to be referring to you, who they would be referring, how they would be referred, and when you would receive the referral?  Would that substantially impact your bottom line and save you time, money, and effort?

Second, we need to understand how different behavioral styles will impact your ability to meet the basic business needs you will have defined.  We have an 8 hour program on behavioral styles through our Referral Institute’s “Referrals for Life” program called “Understanding GEMS: From Relationships to Referrals.”

Third, we need to implement a proven and simple system: RISE2.  This proprietary system from the Referral Institute is what these Monday evening calls are based on.   Relationships, Identifying, Strategizing, Executing and Evaluating will provide you with a proven way to proactively generate appointments for you and your referral partners.

Many networking organizations ask members to track the amount of money earned from the referrals exchanged with one another. When tracking revenue from referrals, I often see business owners look at the value of each referral for the dollar amount-in other words, they report the value of each referral based on the cost of the item sold. Obviously, this isn't the net income to their company. They're actually reporting their gross sales as the amount of money referrals bring in to the business. So when you're looking at the dollar value of each referral, remember to calculate the actual net income to your business.

The bottom line is you should measure the income that comes directly to you. With some professions that means gross income, and with others it means gross commission; however, in both cases, it is gross money to the business owner.

Let me say that there's no perfect way to measure. Every variation has a problem with it. But based on years of experience, I've found this approach has the most level playing field, and it's the measure we use in all official referral numbers in BNI, the referral organization I founded almost 20 years ago.

Measuring the value of your referrals is important because it helps you determine your return on investment in a group. One thing that you should consider is the critical-mass point for your networking group. In BNI, we have found that to be roughly 20 people.

There's an interesting dynamic relating to net income that happens in networking groups. In one region of our networking organization we studied, for example, chapters over 20 members produced an average net income of 289 percent more than chapters of 20 members or less. If you're in a networking organization, it's clear that the size of the group is going to impact the bottom line of your business! During the time your networking group is between 10 and 20 members, you're in the growth stage. Between 20 and 30 members, you're in the profitability stage. My friend Mike Garrison of the

Roanoke

,

VA

calls this the "Power of 20." The more sources for referrals you have at your ready, the more referrals you are going to get and the higher your income from referrals will be.

With the results of that survey in mind, you can see that building your business through referrals is systematic. Too many people approach this concept socially. While developing your business by referral is about relationship-building, it's not social! It's based on numbers. You have to measure what word-of-mouth is doing for you. It's the only way to tangibly see what impact referrals are having on your income. An essential part of any marketing plan is measuring the results, and referral marketing is no different. To use your sources wisely and efficiently, you've got to know how well your plan is working, how you can change it to improve current and future results, and how much your investment of time and money is earning you. When we go back to the beginning of my answer, you can now see how your projections are inextricably linked to tracking your results. In his book Business by Referral, Dr Ivan Misner and his co-author Robert Davis have outlined some projection and tracking methods which are very helpful for those wishing to have some really hard numbers on the effectiveness of their networking efforts.

With a thorough tracking and evaluation system, you'll know whether the execution of your plan is working and whether it's cost-effective. You'll be able to demonstrate to managers, investors, bankers and employees that you're a focused and capable marketing professional. Be patient, persistent, flexible and imaginative, and you'll eventually find yourself running a successful referral-based business, one that will be the envy of other business owners.

Networking/Word of Mouth/Referrals

The Word of Mouth Marketing Association talks about "common types of word of mouth marketing."  I've included their list below.

I'd like to add BUSINESS NETWORKING to their list and have some dialog on the similarities and dissimilarities of these subjects. 

In your opinion, how does business networking and the subjects below relate to one another?

· Buzz Marketing: Using high-profile entertainment or news to get people to talk about your brand.

· Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by email.

· Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums); providing tools, content, and information to support those communities.

· Grassroots Marketing: Organizing and motivating volunteers to engage in personal or local outreach.

· Evangelist Marketing: Cultivating evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf.

· Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals.

· Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others.

· Cause Marketing: Supporting social causes to earn respect and support from people who feel strongly about the cause.

· Conversation Creation: Interesting or fun advertising, emails, catch phrases, entertainment, or promotions designed to start word of mouth activity.

· Brand Blogging: Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about.

· Referral Programs: Creating tools that enable satisfied customers to refer their friends.

Welcome

Welcome to the Referrals For Life weblog.

I am currently in Malaysia at the first ever World-Wide Conference for BNI.  It was amazing to see so much business done with people from 10 different countries in the world. 

I'm off to Singapore next for their regional conference.

Dr. Ivan Misner

Referral Marketing

When you become a regular reader of Referrals for Life, you will learn a lot about networking and referral marketing.  We will cover the powerful yet easy referral process. How the importance of networking is incessantly increasing.  Not only is referral marketing becoming more important, but it has always been and always will be a very effective way to market your company.  A recent study by the Bristol Business School found that 70 percent of the revenues generated by small business owners come from their network.

The key concept in referral marketing is relationships.  The system of information, support, and referrals that you assemble will be based on your relationships with other individuals and businesses.  Referral marketing works because these relationships work both ways: they benefit both parties.

A referral-marketing plan involves relationships of many kinds.  Among the most important are those with your referral sources, with prospects these referral sources bring you, and with customers you recruit from the prospects.  These relationships don’t just spring up full-blown – they must be nurtured.  As they grow, fed by mutual trust and shared benefits, they evolve through three phases: visibility, credibility, and profitability.  We call this the VCP model.

The VCP model describes the process of creation, growth, and strengthening of business, professional, and personal relationships; it is useful for assessing the status of a relationship and where it fits in the process of getting referrals.  It can be used to nurture the growth of effective and rewarding relationship with a prospective friend, client, co-worker, vendor, colleague, or family member.

Pro-active referral marketing is the systematic, planned and prepared process of managing your existing network and establishing relationships with people you are introduced to through the referral process.  The outcome: each professional can tap into their data base to reach their stated goals.