Top 10 Dos and Donts for an Effective Business Referral Network!
Every business - particularly small, entrepreneurial or professional businesses - must have a powerful referral network. It is very unlikely (and terribly expensive) to "advertise your way to success". Without tons of capital, it can't be done. It is far more effective, and more fun, to create an effective network that sends you clients, supports your business, and makes you money. Unfortunately, most professionals confuse effective networking with passing out business cards and schmoozing. They are NOT the same. Here are my Top 10 Tips for a network that will help you build your business. 1. DO: Be visible and well-liked! Know lots of people and be sure they know you. 2. DON'T: Inappropriately use acquaintances or membership lists to build your practice. People hate being put on the spot! 3. DO: Join and contribute to worth-while groups and causes. You have to put in before you can take out. Be known as a generous person with lots to give. 4. DON'T: Grab the spotlight or Chair every committee. Don't turn down positions of leadership or responsibility, but don't be pushy. Let people discover you! 5. DO: Show up! Whatever your current circle of friends and relationships, this week go someplace else! Keep adding new circles of influence and expand the range of your interests and involvements. Keep growing the circle! 6. DON'T: Expect colleagues with similar expertise to be referral sources. They have their own businesses and are unlikely to share clients with you. Be realistic. 7. DO: Reach beyond your profession for business connections. Look to business owners, salespeople, educators, and managers. Anyone who connects with lots of people and who does not compete with you is a potential partner. 8. DON'T: Rush into business relationships. Have lunch, get acquainted, but never push a business card or brochure on anyone. Conveniently "forget" them at the office, and send a thoughtful follow-up letter with the material a couple days later. 9. DO: Make sure your business connections run both ways. Referring clients must make business sense to both sides. Make sure your work provides increased income, more convenience, better outcomes, or other benefits for your referral sources. This is only fair. 10. DON'T: Panic or try to rush. Most successful practices only need 3-10 great referral sources. Select and cultivate them wisely and patiently. It pays huge dividends! © Copyright 2003 by Philip E. Humbert. All Rights Reserved. This article may be copied and used in your own newsletter or on your website as long as you include the following information: "Written by Dr. Philip E. Humbert, writer, speaker and success coach. Dr. Humbert has over 300 free articles, tools and resources for your success, including a great newsletter! It's all on his website at: http://www.philiphumbert.com
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If you've taken the trouble to establish the real of your product or service, you ? and your prospect ? already know that the value far exceeds the price you are asking. (If not, you better go back and rethink the math.)
So if they are saying "no," or simply not saying "yes," it either means they are experienced buyers waiting for you to spontaneously cut your price, or it means they just do not see a sufficiently compelling value?yet.
Cutting your prices will almost never lead to new sales if they didn't plan on buying in the first place, and the effect on your profits can be devastating. Follow these numbers:
Let's say you sell a product for $100. Your cost is $70. That means it carries a thirty percent margin-your profit is $30. Now, to make a sale, you are "forced" to cut your price by twenty percent. Your new selling price is $80. All things being equal, your profit is now $10-instead of $30. That means a 20% price reduction cost you 66% of your profits.
TWO-THIRDS OF YOUR PROFITS for a 20% price reduction!
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Plus, my client locked in that customer for four full years, during which time they rightly expect to sell them additional products and services.
Price cutting is the "lazy man's" response when it's hard to make sales. Unfortunately, it may not boost total revenues, and results in drastically lowered profits on the sales that do get made. Often the outcome includes permanently reduced prices and margins, and even a price war, which has disastrous consequences for all players, except very deep-pocketed ones.
Sell the value instead. Spend the time to discover what your prospect is trying to accomplish, and make sure your product or service helps them do that. Then establish the quantifiable financial impact, and sell them that. Or package, bundle or go for the long-term, multi-year commitment.
There are other approaches that not only maintain price levels, but even support higher ones. To get an overview of those approaches, visit http://www.lemberg.com/tipsandtools.html and download "5 tactics to avoid price cutting."
--PL
© Paul Lemberg. All rights reserved
Reprint rights freely given. Please click here for details.
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