And, you do want to own a business that makes a difference, earns you great profits and enjoyable, don't you?
Like many new start-ups, when I started my first business in 2002, I had very little idea about where I to find my first customers. Somehow, I landed myself at a breakfast networking meeting in Birmingham with an internationally renowned group. In the years that followed, I realised that there was much more to networking than met the eye.
Having refined my networking prowess through trial and error and by befriending great networkers as my mentors, I realised very little was mentioned about the quality of referrals and leads. Unfortunately, many of the referrals that are handed at networking events are nothing but duds. Needless to say, I had to figure out a simple and easy way to discern between the different qualities of referrals I was receiving and giving out.
It took a little while for it to dawn on me that the success as medical sales professional in the previous decade was almost entirely based on referrals. Given the complexity of the hospital environments I used to visit, it was imperative to be discerning about the quality of the connections I was making. The NHS was and still is the biggest employer in the UK.
In essence, there are four kinds of referrals which may lead to a business relationship and, hopefully, sales:
The Cold Fish
The Warm Referral
Hot Referral
The Sizzler
1. COLD FISH
In an attempt to help their fellow entrepreneurs, some people will recommend any individual from a company as a prospective client. No telephone number or email address is given nor any attempt to contact the referred is made let alone providing a valid reason for contacting them. This is not a referral and any attempt to call a prospective customer will be little more than a cold call.
2. WARM REFERRAL
I am sorry, but it has to be said. Most people offer these kind of referrals out of laziness. Occasionally, your connector may really be too busy to give you any more support than offering a Warm Referral. Here is how it works. Your connector introduces you to one of their contacts via email or text. It is up to you to take the communication from there.
Whilst some connectors have built a reputation so solid that the sheer mention of their name speaks volumes, most networkers overestimate the importance of their own name to the world at large. Humility is a much more attractive characteristic than pretending to be Don Corleone!
3. HOT REFERRAL
Any good networker understands the nature of a quality connection. Hot referrals are the bread and butter of a successful referral-based business. Typically, your connector will telephone their contact to establish there is a need for your product and a willingness to pay for it. Your connector is not their sell your product, but to introduce you as a trusted advisor from their network. People prefer to buy from people they know, like and trust. Your connector is putting their rapport, trust and loyalty on the line when they introduce you to their contact. It is now up to you to honour that help and support.
4. THE SIZZLER
These are my favourite types of referrals by a mile. When a connector arranges a three-way meeting between you, them and your referral contact with the specific aim of acting as a bridge, the prospects of a business relationship being borne are very high. These types of referrals are particularly powerful when dealing with a client or customer that may lead to a high-value lifetime business relationship. The costs involved in gaining a new customer are minimal, yet the potential returns are vast.
I am a big fan of the 80/20 rule in that 80% of your business should come from 20% of your referrals. Therefore, build the kind of relationships that put you in a strong mutually beneficial position. Aim for 20% of the referrals that produce the 80% of the results to come from the Sizzlers. Do your best to inspire and motivate your connectors to give you the next 20% from the Hot Referrals. That leaves 60% of referrals. A wise person would aim to get 80% of the 60% from Warm Referrals. What happens to the remaining 20%, i.e. the Cold Fish? Discard them? Save them for a rainy day? Feed them to the cat? Contact them anyway? You decide. It is your business!
Harun Rabbani