Sales and Sales Management Blog

October 24, 2011

How to Make Word of Mouth Marketing Really Work

Filed under: business,marketing,sales,selling,small business,Word of Mouth Marketing — Paul McCord @ 12:51 pm
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Last week while I was teaching a group of CPA’s in Newark how to work with their clients to generate a large number of direct introductions to high quality prospects, one participant mentioned that he would often hear from a client that they had given his name and number to another business owner but he would seldom hear from that prospect.  His question was how he could use the introduction generation process I was teaching to capture that word of mouth prospect.

Great question—and one that most sellers are faced with.

Everyone would love to have their clients out talking about them.  They encourage their clients to tell their friends and acquaintances about them; they hope and pray that people are talking about them; they try to use social media as a springboard to get even more word of mouth marketing.

Unfortunately, even though you want word of mouth marketing and do whatever you can to encourage it, it has one primary disadvantage that is hard to overcome—you have no control over whether the person your client spoke to will take the initiative to pick up the phone and give you a call.

How much business are you losing because you never hear from the people your clients mention you to?

Right, you don’t know because you have no idea how often your clients mention you.

That’s the intrinsic problem with a passive marketing method—no control means no accountability, no way of knowing how effective or ineffective it is.  If you get prospects calling because clients mentioned you, you think that word of mouth is working.  If you don’t get calls you think your clients aren’t talking about you.  The problem is that those calls you get might be just a fraction of the people who are hearing about you from your client, and those no calls might not be an indication that your clients aren’t talking about you but instead might be an indication that their message isn’t resonating with those they are speaking to.

So is there a way to turn word of mouth encouragements into real connections?

Although you’ll never be able to track and connect with every word of mouth mention your clients give you, you can significantly increase the number of connections you have with those your clients have mentioned you to by simply becoming more proactive in the way you work with your clients regarding their word of mouth mentions.

In the case of the CPA above, he mentioned that he often received emails or verbal statements from clients saying something to the effect, “Just wanted to let you know that I mentioned you to Joe Blow the other day.”  Sometimes the client will mention the name of the person they spoke to, other times they won’t.  In both cases, however, the CPA knows that a client has spoken to someone about him and recommended they give him a call.

Like most sellers in that position, the gentleman at the presentation simply hopes that he’ll get a call.  Way too often the call doesn’t come—just another wasted mention by a client.

Fortunately this CPA and everyone else who has a client or anyone else mention that they’ve spoken to someone about them can easily turn that weak word of mouth mention into a direct introduction by simply ASKING for the introduction.  It’s really as simple as asking:

Client: “Hey, Joe, just wanted to give you a head’s up that I recommended you to Nancy Drew and encouraged her to give you a call.  I hope you hear from her.”

Seller: “Bill, that’s great; I really appreciate it.  I haven’t heard from her yet but I’d love to.  Come to think of it, would you be comfortable introducing me to her?”

Couldn’t be simpler. 

What are the chances your client will introduce you to the prospect?  Very high indeed since they obviously like your work and think that you can help the prospect—and they obviously have some type of relationship with the prospect. 

Before asking for the introduction find out what the relationship is between your client and the prospect and why they suggested the prospect call you. 

All the pieces are in place for a direct introduction.  And what happens if your client says no?  You’ve lost—nothing.

But what about all those suggestions they make to prospects to give you a call that you never know about?  How can you learn of them in order to try to turn them into an introduction?

These are certainly more difficult—but not completely impossible.

First, once you let your client know that you would love for them to mention you to anyone who might be in need of your expertise and services, let them know that you’d appreciate it if they’d let you know through a call or email when they mention you to someone.  Once they do, thank them and then ask for the direct introduction.  Don’t expect everyone to let you know when they speak to someone about you—but many will and that will give you the opportunity to ask for the introduction.

Knowing that many won’t inform you when they mention you, you can also take the initiative and ask your clients if they have mentioned you to anyone.  When speaking with a client simply ask in passing if they’ve had an opportunity to mention to anyone lately.  Asking will let you uncover any unmentioned recommendations they’ve made to prospects to call you and will also remind them that you seek word of mouth recommendations.  Again, you won’t uncover a mountain of unknown mentions, but you’ll uncover some which will give you the opportunity to convert them into introductions and it will allow you to gently remind your client to mention you whenever they have a chance.

Word of Mouth Marketing is hardly a marketing format to hang your business on.  That being said, by all means encourage your clients to mention you to those they come into contact with that might be able to use your products or services.  But at the same time seek to move those word of mouth recommendations into something far more concrete—a direct introduction. 

Don’t settle for being passive.  You can turn word of mouth into far more effective introductions without being obnoxious or overly aggressive—all you have to do is ask your client for an introduction once you know they’ve recommended you.  The key is learning how to uncover the recommendation.

December 27, 2010

Is Confusing Word of Mouth Marketing with Referral Marketing Costing You Business?

Filed under: marketing,prospecting,Referral Selling,small business,Word of Mouth Marketing — Paul McCord @ 12:30 pm
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Log on to almost any site that has a large and varied library of sales articles or head over to Amazon and scan the books that come up from a keyword search of “referrals” and you’ll find one of the most common—and innocently destructive—confusions in the discussion of prospecting methodologies: discussing word of mouth marketing in the same context as referral marketing.

From sellers to business owners to sales leaders to some of the biggest names in sales training and coaching, word of mouth marketing and referral selling are discussed as though that are just two aspects of the same prospecting methodology.  They aren’t.  They are very, very different, and understanding the difference is important if you want to maximize your word of mouth and/or referral marketing effectiveness.

Word of Mouth Marketing is PASSIVE.  In word of mouth marketing the object is to have someone, usually a client, recommend people they know call you if they have a need for your product or service.  Your recommender may or may not give the person they speak to one of your cards or your phone number, but at a minimum they will tell the other person your name and give them a brief idea of why they should speak with you—usually an idea of what you accomplished for them, how great your service was, or how competitive your price.

Other than possibly encouraging them to pass along your information—and maybe giving them a few of your business cards—you have no control.  You are relying on other people to create business for you.  You have to rely on your client to mention you to those they speak to who might need your products or service.  You then have to hope that the person they spoke to about you picks up the phone and gives you a call or to walks into your office.  Seldom do you even know that your client spoke to someone about you.

Word of mouth marketing works.  It certainly isn’t the most effective prospecting strategy, but it has its place in the prospecting toolkit of many sellers.

Referral Marketing is PROACTIVE.  Referral marketing is the exact opposite of word of mouth marketing.  Instead of waiting for someone else to generate prospects for you, referral marketing demands that you take control of the process, including doing the referral work for your client.

Traditionally referral marketing has been taught as a semi-proactive process; one where you were taught to ask a weak referral question such as, “Ms. Client, do you know anyone else that I might help?”  Or, “Mr. Client, who do you know that might benefit from my products or services?”

When you ask a weak referral question such as one of these, you’re still relying on your client to do your prospecting for you.  Although more proactive than word of mouth marketing, you still have little control over the result—you may or may not get a positive response to your question, and even when you get a positive response, it may not be a referral to a quality prospect.

However, if you’ll do the work for your client by doing some detective work to figure out who your client knows that you know you want to be referred to, and then instead of asking a general referral question, asking for the specific introduction to the person you know you want to be referred to that you know your client knows, you’ve taken total control of the referral process.  You’re no longer relying on your client to come up with a quality referral for you, nor are you relying on them maybe mentioning you to someone who might need your products or services.  Instead, you’re asking for a direct introduction to someone you KNOW you want to be referred to.  You know you’re getting a high quality referral.

It isn’t a possible.  It isn’t a maybe.  It isn’t a might. 

It isn’t a maybe they’ll take my phone call.  It isn’t a maybe I’ll get to talk to them.

It is a direct introduction to someone you know you want to be referred to.  You know it is a good referral.  You know it is a quality prospect.  You know you’ll get to talk to them. 

You’ve taken all the maybe’s out of the equation and have taken total control of the process.

Referral marketing is not only far more effective than word of mouth marketing, it is also a far more predictable prospect generation strategy.

OK, so there’s a difference.  What’s the big deal?

It’s a big deal to understand the difference because it means you can substantially increase your business by thoroughly understanding how each strategy works and then employing both in your sales business.

I’ve had a great many sellers and sales leaders tell me that they either currently use referral marketing aggressively or they tried referral marketing and it was a total flop.  Yet when I question them about what they’re doing or what they did that didn’t work I discover that they were using word of mouth marketing, not referral marketing. 

Lumping word of mouth marketing in with referral marketing is an innocent mistake–but one that is costing sellers business.  And although they are very different strategies, by engaging your clients and others in both a proactive and a passive prospect generation strategy, you can quickly and substantially increase your pipeline.  It simply takes understanding the difference between the two strategies than then learning how to maximize their utilization.

June 19, 2009

Boost Your Sales series: “Your Connections Are Your Key to Sales Success,” by Paul McCord

Filed under: marketing,prospecting,Referral Selling,sales,selling,Word of Mouth Marketing — Paul McCord @ 6:24 am
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Show Your Support for the People of Iran 

My friend Jonthan Farrington was contacted by one of his friends who asked him to add a widget to his blog in support of democracy and free elections in Iran. 

Although my government here in the US has neither the moral courage nor political will to do so, I and many millions of others do.  I’ve installed the widget on the righthand sidebar (yep, it isn’t working as it should, so I’ve got some work to try to get it to work correctly on wordpress).  You can get a widget to show your support by going here.

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Your Connections Are Your Key to Sales Success
by Paul McCord

I hear many sellers complain that directly asking for referrals is too uncomfortable so they would much rather generate referrals by asking their clients to recommend them when the opportunity occurs. 

Bad mistake.

Not only do they misunderstand how to generate referrals, they’re confusing referrals with Word of Mouth Marketing. 

They’re not the same. 

Both can be highly valuable in building and maintaining a solid and growing sales business.

Neither can be done successfully if left to chance as most sellers do.

Unless you are selling a highly specialized product or service in a narrow market, your connections can be the foundation of a business that puts you in the top earnings category of your industry.

But to do so, you must learn how to turn both referral generation and word of mouth marketing into a disciplined process rather than a chance happening.

Referral Generation

First, let’s clear up some language issues.  We’re not talking about “asking for referrals.”  Asking for referrals traditionally has entailed asking a lame question such as “do you know of anyone who might be able to use my products or services?”  The goal of such a question is garnering the name and phone number—if you’re lucky, two– of someone your customer knows.  Over the decades this method has been taught, most sellers have discovered it isn’t very effective and a great many sellers simply quit asking.

Instead of “asking for referrals” we’re going to talk about “referral generation.”  Referral generation isn’t a question, it’s a proactive, disciplined process that begins the moment you meet a prospect and continues throughout your relationship with the person or company that generates a consistent flow of high quality referrals.

The traditional method of seeking referrals, the “do a good job and ask for referrals” method that is taught by the vast majority of sales trainers and training programs that address referrals, creates so many issues that failure is almost inevitable.

By simply “doing a good job” and then “asking for referrals,” you create these issues for your client:

  • This question is normally thrown at a client at the very end of the sales process and without any forewarning what-so-ever.  It’s a question that comes out of the clear blue catching an unsuspecting client by surprise and often making them feel that they’ve been ambushed by the salesperson. 
  • Most often, upon asking for referrals, the seller stands in front of the client waiting for an answer.  Is it any wonder that many clients are uncomfortable and feel that they’ve been cornered by the seller?
  • If the client gives a “referral,” it is most likely nothing more than a name and phone number that is no more qualified than if the seller had opened the phonebook and pointed at a name and number at random.  The seller has given the client no time to become comfortable with the idea of giving referrals and only about 10 or 15 seconds to go through their mental file cabinet to find a quality prospect to give; nor has the seller defined for the customer what constitutes a good referral for them.
  • Not only has the seller put their client in an uncomfortable position, they haven’t given their client a reason to give referrals.  Despite the common assertion by sales trainers to the contrary, most clients don’t want to give referrals.  Certainly, there is a small percentage that gladly give referrals, but most need a good reason to give quality referrals and with the traditional method of asking for referrals, the seller hasn’t given the client a reason to give them.
  • Although we may think of a referral as nothing more than our client giving us the opportunity to talk to someone who might need our product or service, our client thinks of giving a referral as telling the referred prospect that they wholeheartedly endorse us and that the prospect should trust the client and work with us based on their endorsement.  For most clients, that’s a big step and a great many are reluctant to take it.  Many clients believe that the people they refer us to will be more critical and more demanding than they have been and, therefore, they need to be sure that we aren’t going to embarrass them by disappointing the prospects they refer.  Consequently, we must let the client know that they aren’t going to give referrals but rather we’re going to earn them.  Therefore we must give them an objective way of evaluating whether or not we’ve done that.  Like the issues above, the traditional method taught by most trainers and training methods ignores this issue.
  • Finally, the traditional method of asking for referrals makes the client do all of the work.

Is it any wonder sellers feel uncomfortable asking for referrals?  If I was going to do this to my client, I’d be pretty uncomfortable too.  In fact, I’d probably not even ask.

Fortunately, there is a process that allows you to work with your client, eliminates all of the above issues, and will consistently generate a large number of high quality referrals.

Although I could write the book about the process and how to implement it in your sales business (actually, I did write the book, Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals, Wiley, 2007), for brevity’s sake, I’ll simply lay out the process:

Let Your Prospect Know You’re Referral-based: From the moment you meet a prospect, begin planting the referral seeds by letting them know that you are a referral-based seller.

Consistently Drop Referral Seeds:  You don’t have to beat your prospect over the head about referrals, simply gently mention that you’re referral-based when the opportunity arises.  Prospects and clients aren’t stupid and if they hear it enough, they’ll put two and two together and figure you’ll eventually be asking them for referrals.

Have a Direct Referral Conversation with Your New Client:  Once your prospect has converted from prospect to client, you need to have a direct conversation about referrals with them.  The conversation is to let them know why your clients give you referrals, that is, why it is in your client’s own interest to give you referrals; what a quality referral for you is; that your client doesn’t just give you referrals, you earn them, and set the standards by which your client will judge whether or not you’ve earned them; and get your client’s verbal agreement to give referrals if you’ve earned them.

Continue the Referral Seeds:  After your referral conversation, go back to just dropping referral seeds.  Again, there’s no need to beat your client about the head, just gentle, conversational reminders is all that’s needed.

Set the Referral Acquisition Meeting:  Once the sale has been completed, set a meeting with your client to get your referrals.  Set the meeting for a date a few days in the future—remind your client of their agreement to give referrals if you’ve earned them; confirm that you have earned them; review what a good referral for you is; give them a bit of time to think of whom to refer.

Don’t Make Your Client Do All The Work:  While you were working with your client you should have been paying attention and learning whom your client knows.  At the referral acquisition meeting, after your client has given you their referrals, ask them to refer you to the people you’ve learned they know—or you think they may know—that you know you want to be referred to.  By paying attention and asking for specific referrals, you’ll double, triple, quadruple or more the number of quality referrals you receive.

Don’t Get Names and Numbers, Get Introduced:  Instead of just getting a name and number like everyone else, get a direct introduction from your client to the referred prospect.  Get a letter of introduction, arrange for a conference call between the three of you, or set a lunch meeting with your client and the referred prospect.  An introduction turns a name and phone number into a real referral.  A name and phone is nothing but a name and phone number.

Keep Your Client Fully Informed:  Thank your client for every referral and make sure you keep them fully informed of what is going on with each referral they give you.  Not only do they want to know that they’ve helped you, they want to know that you’re not giving them reason to regret having given you referrals.

Word of Mouth Marketing

Word of mouth marketing is a very different animal than generating referrals. 

Word of mouth marketing is the verbal (most often) recommendation of a good, service, or provider of a good or service.  Where a referral is the direct introduction of you to a prospect by a client (or other referral source), word of mouth marketing is having someone suggest a prospect contact you.

These are two radically different forms of prospecting and personal marketing–with very different result expectations.

You control what happens with a referral.  You work with your client to generate the referral.  You get a direct introduction to the prospect.  You’re in control.

With word of mouth marketing you hope your client (or other source) recommends you to a prospect, then you hope the prospect contacts you.  You are almost totally dependent on the effort of someone else to generate prospects for you.

Because they are diametrically opposite in approach, they complement one another well.

Although you have little control over word of mouth marketing, you need a process that will give you as much control and allow you to capture as many word of mouth recommendations as possible.

What process works to help capture as many word of mouth recommendations as possible?  Here’s what works for me.  Again, as above, in abbreviated form:

Earn Recommendations Before Asking for Recommendations:  Although your family and friends may recommend you no matter whether they think you’re the best at what you do, few customers and acquaintances will.  Make every contact’s experience with you exceptional.  Earn their word of mouth recommendation before you ever bring the subject up—and if you’ve failed to make their experience exceptional, don’t ask for recommendations.

Let Your Recommendation Sources Know You Appreciate Their Recommendations:  Let everyone know that you sincerely appreciate their efforts.  Thank them before you get a recommendation from them.  Thank them after every recommendation you receive from them.

Let Your Recommendation Sources Know You Would Like to be Notified When They Recommend You:  You need to know who your sources have recommended you to so you can contact them if you don’t hear from them.  Studies have shown that only about 40% of the people whom you are recommended to will ever contact you.  If, however, you can follow up with them, the number you talk to increases to about 65%, increasing by over 50% the number of recommendations that you have the opportunity to sell.

Give Your Sources a Reason to Take the Time to Recommend You:  Offering your sources a small incentive for making a recommendation is a tangible ‘thank you’ that most clients and recommendation sources will appreciate.  Your incentive need not be particularly large, but it does need to be valuable in the sense that it has value to your source.

Keep Your Recommendation Source Informed:  Just as with a referral, you need to make sure you keep your recommendation source informed of what is happening with the person they recommended you to.  Seeing that their recommendation has proven beneficial for both you and the person they recommended you to will encourage them to make additional recommendations.

To make referral generation and word of mouth marketing effective, you can’t leave them to chance.  If you are willing to invest the time, effort, and dollars to learn how to turn referral generation and word of mouth marketing into effective processes, they can take your sales business to new levels quickly. 

 

Paul McCord, a leading Business Development Strategist and president of McCord Training, works with companies and sales leaders to help them increase sales and profits by finding and connecting with high quality prospects in ways prospects respect and respond to.  An internationally recognized author, speaker, trainer and consultant, Paul’s clients range from giants such as Chase, New York Life, Siemens, and GE, to small and mid-size firms, as well as individual sales leaders.  He is the author of the popular Sales and Sales Management Blog (http://salesandmanagementblog.com). 

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Then you’ll love my POWER SELLING newsletter.  Twice each month you’ll get my newsletter that focuses on real solutions to real sales and sales leadership issues with ACTIONABLE guidance, not grand but worthless theory.

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June 18, 2009

Boost Your Sales series: “Marketing Is What You Do When Your Product Is No Good,” by Dr. Martin Russell

Filed under: marketing,prospecting,Referral Selling,sales,selling,Word of Mouth Marketing — Paul McCord @ 5:31 am
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It’s Referrals and Word of Mouth week at the Boost Your Sales blog series. 

Although we have several doctors contributing to the Boost Your Sales series, Dr Martin Russell is our only medical doctor contributor,
and tomorrow I’m up with “Your Connections are Your Key to Your Success”

Stay tuned in next week as a great list of experts—Jeb Blount, Nigel Edelshain, Cindy King and Ardath Albee give great guidance on “Prospecting and Social Media”

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Marketing Is What You Do When Your Product Is No Good
by Dr. Martin Russell

My background is as a medical doctor, and this quote, “Marketing is what you do when your product is no good”, was handed to me by one of my patients who knows of my marketing work.

She is one of those people who thinks that marketing should be a four-letter word.

My first reaction was to be insulted.

But then I stopped, and I said to her that this quote was either from someone who had never been successful in sales, or it was from a ‘natural’ salesman who just didn’t call what they did marketing.

Turns out this quote is from Edwin Land (http://en.wikipedia.org/wiki/Edwin_Land) chief executive of the Polaroid Corporation for almost 50 years, scientist, and inventor of the film for the Polaroid instant camera.

The Polaroid camera was such a brilliant invention that the story goes that when…

“fifty-seven (cameras) were put up for sale at Boston’s Jordan Marsh department store before the 1948 Christmas holiday … all fifty-seven cameras and all of the film were sold on the first day of demonstrations.”

Was the product good?

Certainly.

But was there any marketing?

Well someone chose to put them in that store, chose the timing just before Christmas, and created the demonstrations.

Heck yes there was marketing!

And that’s the point.

There was lots of marketing. It was just that the marketing matched the product so well that Edwin Land could claim it wasn’t there.

If you want to be a great salesman I hope you have read and devoured Paul McCord’s books on referral selling. They will teach you to walk and talk referrals as an intrinsic part of your service. Million-dollar sales people are always overlapping the marketing and the service.

Many people in small/micro businesses don’t want to think of themselves as marketers.

They reluctantly place their Yellow Pages ad, or put up a website, or quiver in their shoes at the thought of asking for referrals.

That’s why I like to start with word of mouth referrals. No matter how much a business owner is against marketing, they want people talking about them and giving them word of mouth referrals.

Word of mouth can seem haphazard, but done properly, it can be on-demand, consistent, and best of all, a win for everyone concerned.

It comes down to this.

You can have a separate mental category called ‘marketing’ – or you can realize it is all part and parcel of providing your product or service.

Consider these four aspects…

1. Clients want to have better lives. This means they want your great products and services!

2. Clients want to be able to rely on you to be there for them, no matter what the economy does. This means they want you to stay in business!

3. Clients want to continue adding value to their lives. This means they want you to follow-up!

4. And finally, clients care about people they know, and they don’t want them ripped off, or given poor advice, or let down. This means, if you will take care of people properly, they want to give you referrals!

So rather than be cynical (scared?) of ‘marketing’ like my patient who brought me the quote, it is up to you to as a business owner to help people over that problem.

But first, are YOU over that problem of thinking of marketing as separate from your business?

Remember, you don’t have to be a ‘natural’ like Edwin Land, because marketing – yes even plain old word of mouth referrals – has a specific set of skills that can be learned.

Dr Martin Russell is a medical doctor with his own solo by-referral counseling practice, as well as being co-author of “Word of Mouth Magic” – www.WordofMouthMagicEbook.com and having his marketing blog at www.WordofMouthMagic.com

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Do You Like the Sales and Sales Management Blog?

Then you’ll love my POWER SELLING newsletter.  Twice each month you’ll get my newsletter that focuses on real solutions to real sales and sales leadership issues with ACTIONABLE guidance, not grand but worthless theory.

Simply shoot an email to me at pmccord@mccordandassociates.com with “Subscribe” in the subject line and your name and email address and I’ll get you subscribed.

And by the way, we hate SPAM also, so we’ll never sell, lease, rent or give your information to anyone—EVER!

Or, if you prefer, just save the Sales and Sales Managemenet Blog to you RSS Reader here.

December 3, 2008

A Lost Cell Phone=New Business

Filed under: business,Customer Service,sales,selling,Word of Mouth Marketing — Paul McCord @ 11:28 am
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How often have we all heard that service sells?  We’ve been preached that old truism so often we take it for granted; we lose the real impact of what outstanding service really has-not to mention what outstanding service really means.

Well, I was reminded of that last night-and saw the results this morning.

I was visiting with a client yesterday and left his office at about 7:20 last evening.  About 30 minutes later I noticed I didn’t have my cell phone.  I began to mentally retrace my steps, trying to determine where and when I last had it in my hand.  I was fairly sure I had left it in my client’s office, but I wasn’t positive since I could have dropped it in the parking lot, the elevator, or of several other places.  I was debating whether to wait until morning to call and see if the client had the phone, or to call the cell phone company and have the phone shut off.

Then, I got a call on my other cell phone.  It was my wife.  She had just received a call from an employee of the company that cleans my client’s office.  The lady explained that she had found a phone and the number she called was the last number dialed from the phone, which had been my wife’s phone.  She wanted to know if my wife knew whom the phone belonged to.  Debbie figured out it was my phone and informed the lady that it belonged to me and that I had been visiting with the gentleman in whose office the lady had found the phone lying on the carpet.  The cleaning lady then told Debbie that the phone was safe and that she was putting it in the middle drawer of the gentleman’s office.

That’s service way above and beyond what one would expect from a cleaning company.  The phone could easily have been stolen or the cleaning lady could have just picked it up and put it on the desk and forgotten about it.  Instead, she took the time to see if she could track down the owner and assure them that the phone was safe and where they could reclaim it.  How many cleaning crews would have taken the time-or cared enough-to do that?

Not only was I impressed enough to call the owner of the cleaning company and praise his employee, my client was impressed enough to give the cleaning company the cleaning contract on another office building he owns and to recommend the company to two of his clients-and it isn’t noon yet!

Such a simple thing.  It took no more than a few minutes of the lady’s time, yet the act was so unexpected and unusual, it had an immediate impact that has resulted in additional business from the cleaning company’s current customer, as well as very probably additional contracts from the word of mouth the act generated.

How you treat customers gets around-and sometimes it’s the little things that make the difference.

May 26, 2008

Asking for Referrals–Don’t be Mislead by Misguided Trainers

Filed under: marketing,Personal Marketing,prospecting,Referral Selling,sales,selling,Word of Mouth Marketing — Paul McCord @ 8:46 am
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Take a look at some of the current literature and training on referrals and you’re bound to walk away confused and frustrated. One trainer tells you not to ask for referrals because it signals to your client that you’re weak and can’t find business on your own. Another tells you that referrals are your ‘right’ and your clients have no right to withhold them from you. Another says that when you ask for referrals you’re offending your client and that instead of asking clients for referrals, you should be exchanging referrals with other salespeople like trading cards. Another one tells you that in order to get referrals you must give the client a reward, the bigger, the better. Many others say the ‘secret’ to getting referrals is just to ask.

So, who’s right? Are referrals a sign of weakness? Are your relationships with your clients commodities to be traded on the open market? Are referrals your God given right? Do you really have to bribe a client to get referrals? Or is simply asking the magic formula?

Misguided Referral Training
In a sense they’re all right. If one doesn’t know how to initiate and develop a relationship with clients that result in the client willingly giving a large number of high quality referrals then maybe you are offending the client when you ask; maybe you do have to bribe them in order to get referrals; maybe your relationship is nothing but a commodity; maybe you do feel you have to go in with the attitude that it’s “my right and by gosh you’re going to give me referrals.”

According to one trainer, asking for referrals can kill your credibility by making you “just like every other salesperson.” Instead of asking for referrals, one should be different and professional, giving great service and waiting for your clients to spread the word for you. Talk about having no clue as to how to generate referrals.

First, this trainer has left the realm of referrals and has gone into the realm of word of mouth marketing—a not uncommon confusion of the two very different marketing formats. Secondly, no matter how great you are at providing superior service, how often have you gotten unsolicited referrals? The dozens and dozens of top producers I’ve worked with believe they can reasonably rely on maybe a half dozen unsolicited referrals a year. Now that puts a real dent in their production.

According to another training company, you should be asking for referrals virtually every time you speak with your prospects and clients–and you should be asking because referrals are your right. They advise you begin asking for referrals from your first meeting with the prospect and ask for them before you make any presentation. You have a right to ask for referrals and your prospect has no right to withhold them, so ask for them right up front, ask forcefully–and insist they give them. As with the advice above, they seem have no clue as to the psychology of referrals. They appear to believe that salespeople are God’s gift to consumers and therefore have extraordinary rights simply because they have a business card that says they’re a salesperson.

Referrals are NOT a right. Referrals are EARNED and you cannot earn a referral the second you meet a prospect. The client has the right to give or not give referrals; you have no right to expect them. Referrals are earned by doing exactly what you have promised your client, not by demanding them, not by expecting them, not by simply existing and standing in front of a prospect or client.

Many advocate using incentives to get referrals, but often the incentives they speak of aren’t really incentives but are instead bribes. The theory is that people ‘love to give referrals’ and that giving an incentive simply makes giving referrals that much easier and ‘fun.’ Some advocate gift cards of anywhere from $25 to $100 or more, others a percentage of the sales price, and others free merchandise and/or service, often the incentive is outlandish—and the bigger the incentive, the more referrals you’ll get and if you get enough referrals, the incentive will have been worth it.

The first problem with this advice is that people don’t ‘love giving referrals.’ Most clients hate giving referrals—unless they fully understand why they are giving the referral, why giving referrals are in their own best interest, and that the person they give the referral to has objectively earned the referral. Clients don’t give referrals because they like you, respect you, or even because you did a good job. They give referrals because giving referrals is in their best interest—and if you have to bribe them to give referrals, you haven’t earned them. And if you haven’t earned them, no matter the size of the bribe you give, you won’t get high quality referrals.

Secondly, clients may well question your professionalism and your ethics if you must result to bribing them for referrals. Clients make a number of assumptions about salespeople. One is that a successful salesperson doesn’t have to bribe people for business. If they believe that is what you are trying to do, you lose their respect and once you lose their respect, they won’t be referring you to the best prospects they know.

If you use an incentive, it must be small in price, highly personal in the sense that it is something just for them, and it must not appear in any way, shape, or form to be a bribe.

There are sites on the internet that try to turn referrals into trading commodities between salespeople. These of course aren’t referrals; they’re simply exchanging information between salespeople about who to contact within a company. These commodity trades can certainly be valuable, but they are a far cry from a referral. According to the blog on one company’s website, customers don’t have the proper ‘DNA’ to give referrals. A client’s only value is in being a reference, not in giving referrals.

As with the others, it simply demonstrates a lack of understanding of what a referral is and how to generate a quality referral. Again, I think the service these companies provide is valuable for the right salespeople, but confusing a referral with a name trade is a disservice to the salespeople engaging in their service. Salespeople can use both quite successfully. No matter how hard I try, I simply cannot get referred into every company that I would like to speak to. A service such as this can help me do that—but having a direct referral into the company is a far better alternative, if I can get it.

Finally, there are the hundreds of sales trainers giving the worn out advice to simply “do a good job and ask for referrals.” This is the way referral generation has been taught for decades simply because the trainers didn’t know a better way of referral generation. Unfortunately, it has been demonstrated that just doing a good job and asking doesn’t work. Thousands upon thousands of salespeople have tried the do a good job and ask for referrals method and have met with dismal results—very often to the point they simply give up asking. In fact, the failure of this method is a major contributor to the misunderstanding of referrals that has resulted in the unfortunate advice given by the trainers above.

Why These Training Methods Fail
To understand how to get referrals, you must first understand why the typical referral training doesn’t work. Understanding what doesn’t work will lead you to understand what does work.

Most referral training is nothing more than a variation of ‘do a good job and ask for referrals.’ Referrals are still an afterthought, a last second question often asked as the salesperson is literally walking out the door. There may be a little twist to it such as offer an ‘incentive’ (read bribe), or ask every time you see a prospect or client because they owe you referrals, or help your client by defining for them who a good prospect is.

The standard referral training creates more problems than it solves. It does solve one problem—it has you ask for referrals. But it creates these problems:
• Asking without first introducing the topic of referrals and allowing the client to become comfortable with the concept takes the client by surprise—it’s an unexpected and unwelcome request.
• It puts your client on the spot. The client is expected to come up with quality referrals in the course of 10 or 15 seconds—an unreasonable expectation
• It doesn’t define for the client who a good referral is (although as we’ve seen, at least a few trainers understand this is an issue)
• It ignores the psychology of the client—that client’s are human and humans typically do things because they see doing them to be in their best interests, and simply asking for referrals doesn’t give the client a reason to give them
• It further ignores the psychology of referrals by ignoring the fact that when a client gives a referral they are putting their credibility on the line with the prospect they refer. Consequently, they won’t give quality referrals unless they KNOW they will not be embarrassed in front of the prospect. They must have an objective way to determine if you’ve earned the referrals.
• It doesn’t make giving referrals easy for the client—it makes them do all the work.

Is it any wonder most salespeople don’t get many quality referrals? The process they’ve been taught actually discourages clients and prospects from giving referrals. If one wanted to develop a system designed to NOT get referrals, they couldn’t come up with a better system than the one most salespeople have been taught.

Almost every one of the training mistakes above can be traced to the standard referral selling process’ failures:
• Losing credibility? Of course, asking unexpected and unwelcome questions that put your client on the spot doesn’t do you any favors with your client.
• Needing a bribe? Certainly, what other reason does the process give for the client to give referrals? None.
• Clients are only good as references? Naturally, when you can’t get a decent referral from them, what else are they good for other than a reference?
• Demand they give referrals because referrals are your right? When the process fails, browbeat your client into giving referrals. That sounds like a winning attitude.

Turn Referrals into a Real Process
If the above advice is wrong, which it is, then how do you get referrals?

If you want to turn your business into a referral-based business, or even if you just want to significantly increase the number and quality of referrals you get from your clients and your prospects, you have to make referrals a real part of your sales process, not just a last second question, a bribe, or a hope for word of mouth marketing.

You have to have a process that:
• Lets your client get comfortable with idea of giving referrals
• Gives the client ample time to think of quality referrals to give
• Defines for the client exactly who a quality prospect for you is
• Gives the client a real reason as to why giving you referrals is in their own best interests
• Gives the client an objective way to determine if you’ve really earned the referrals
• Makes giving a large number of high quality referrals easy

Referrals are not a last minute, off the cuff question to ambush your client with as you’re walking out the door. Instead, true referral selling involves taking the time to work with your client to get them comfortable, to get them educated, to show them why giving referrals is in their best interests, and to allow them to objectively determine if you have earned their trust and their referrals—and then to make it so easy for the them that they freely give 5, 6, 7 or more high quality referrals.

A referral process introduces you to the client as a referral-based salesperson. It leads them though the process, step-by-step to prepare them to give high quality referrals. It gets their verbal agreement to give you a large number of high quality referrals. It defines for them exactly how you will earn their referrals. And then you do the work for them, making it easy for them to give you a large number of high quality referrals.

Like anything else in sales, learning to generate a large number of high quality referrals isn’t magic; it’s learning and perfecting a real process. It takes time, energy, and honing of skills.

Excerpts from Creating a Million Dollar a Year Sales Income: Sales Success Through Client Referrals (John Wiley and Sons, 2007). Available at Amazon, Barnes and Noble, Books a Million, Borders and all fine bookstores.

April 6, 2008

Guest Article: “The Secret Weapon Every Savvy Exhibitor Should Use,” by Susan Friedmann

Filed under: marketing,sales,selling,Trade Shows,Word of Mouth Marketing — Paul McCord @ 7:52 am
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The Secret Weapon Every Savvy Exhibitor Should Use
by Susan Friedmann

It’s time for a visualization exercise. Are you ready?

Picture this:

You’re standing, with your booth staff, in your exhibit at a large tradeshow. This is one of the best shows you regularly participate in as it attracts a sizeable number of your target audience. Your team is prepared. Your display looks terrific. You’ve got interactive demonstrations, you’ve sponsored a speaker, and your giveaway items convey your marketing message, appeal to your target audience, and are in plentiful supply.

Looks good, right?

There’s something in this scene, something I haven’t mentioned yet, that could make it all even better. Something that will not only boost your ROI, but will create that most vital of marketing tools.

What is it?

It’s a secret weapon that’s more than come of age. In fact, it’s been around since the beginning of time but only now is it realizing its full potential. This build up and suspense is all about “word of mouth marketing” and how you can use it to your advantage on the tradeshow floor.

I’ve recently read Seth Godin’s Flipping the Funnel, and it really brought home the concept of how underutilized tradeshow attendees are as a marketing tool. Attendees are more than prospects and contacts: they’re a potential sales force, just waiting to be tapped on your behalf.

According to Godin, we should:

Turn strangers into friends.
Turn friends into customers.
Turn then … do the most important job
Turn your customers into sales people.

Why?
Why would you want to recruit a whole bunch of amateur salespeople, you might ask, when you already have a perfectly competent, fully trained professional sales team? After all, you’ve spent considerable resources recruiting, training, and retaining your current team. Isn’t that enough?

Frankly, no. Regardless of how big your sales force is, there’s no way they’re going to be able to connect with every person who might be interested in your products and services. Even working flat out, as Godin suggests, they’re not selling as much as you’d like.

This is where your friends and customers enter the picture. If you view them as assets, as allies in the world of sales, you’ve already expanded your potential marketplace. When more people are working on your behalf, you’ll reach more customers. It’s simple mathematics.

There’s another benefit as well. When your friends and customers recommend your products and services, their words carry far more weight than anything your sales team can say. People value the opinions of colleagues, peers and relatives far more than they do the assurances of a salesperson. It’s the difference between editorial speech and advertising, played out in a face-to-face setting.

So Now What?
Being convinced that recruiting tradeshow attendees to act on your behalf is one thing, convincing them to do it is another. According to Godin, we continually spend a tremendous amount of time and energy attempting to spread our marketing message to more and more people. This particularly holds true at tradeshows, where the focus is often on how to attract more people to your exhibit. As well as talk several people at once.

A slight shift in the priorities might be in order. While starting new business relationships will always be important, a new emphasis has been placed on strengthening and maintaining existing relationships.

Consider your current customers. Ask yourself — or even better, ask them, how they feel about your products and services. How about your customer service? What makes doing business with your organization unique, enjoyable, and/or remarkable?

Whatever the answers, what are you doing to help your customers spread the word? Godin offers a number of technical solutions in his free e-book which I highly recommend that you read, but here are a few more hands-on tools to implement at your next tradeshow:

Be Honest
Tell your best customers how much you appreciate them and how much you would value having more customers like them. It’s no secret that you’re in business to make money. No one thinks you’re at the show as a philanthropic endeavor. Appealing to your customers to spread the word carries with it an implied compliment: You’re reinforcing the fact that you think they’re important, by extension, that other people think they’re important, and that their opinion of you matters.

Encourage Referrals
Do you know how often your customer thinks about your company? It’s probably less than 1% of their daily life — after all, they have their own companies to worry about, and their own customer base, not to mention their own personal lives and world events. Sometimes people need a little prompting to spread the word — otherwise, it might never, ever occur to them.

Offer Incentives
If you want your customers to do something for you, you need to do something for them. Godin’s idea is that by offering superior products and services, in a remarkable fashion, you’ll transform customers into fans.

Having strong advocates and supporters never hurts. Offering incentives for spreading the word can be a simple thing – an attractive discount on their next order, for example — or something more elaborate. Remember, as tradeshow attendees skew younger, they may be motivated by more than financial savings or benefits to their company. Consider offering something more personal: a gift that would appeal to your target audience.

In Conclusion
Transforming customers into fans may not have been the top priority on your exhibiting list — but it should be. Recruiting an all-volunteer sales force to augment your existing efforts is one of the most cost effective ways to get your marketing message out there.

Remember: people like to share stories about what they find good, interesting, or unique. By offering that at your next tradeshow, you’re giving yourself a vital leg up on the competition — those who are concentrating on the next new thing miss out on the value of what they might already have.

Written by Susan A. Friedmann,CSP, The Tradeshow Coach, Lake Placid, NY, author: “Meeting & Event Planning for Dummies,” working with companies to improve their meeting and event success through coaching, consulting and tradeshow training. For a free copy of “10 Common Mistakes Exhibitors Make”, e-mail: article4@thetradeshowcoach.com; website: www.thetradeshowcoach.com

January 5, 2008

Update to The False Promise of Word of Mouth Marketing

Filed under: marketing,Referral Selling,Word of Mouth Marketing — Paul McCord @ 7:05 pm
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Seth Godin has an interesting comment in his post from yesterday.  You can read his whole post here.

But what I thought was interesting was his comment that less than 1% of your customers will be willing to spread your word through word of mouth marketing.  Now, that’s a lower number than I’ve seen in the past and if true, means the typical salesperson or small business owner trying to build their business with word of mouth marketing as one of their primary marketing methods is destined to fail.

The report Seth cites is regarding on-line marketing–but it isn’t that difficult, knowing human nature, to extrapolate that into the ‘real’ world.  However, even if we assume that customers in the real world are 10 times more likely to spread your word for you than on-line customers (probably a bad assumption in itself), you still only have 10% of your client base working to help you build your business.

Nevertheless, as I pointed out in my post, by converting from word of mouth marketing to referrals, you can build a business through your database of clients and customers.

December 26, 2007

The False Promise of Word of Mouth Marketing

Filed under: Personal Marketing,prospecting,Referral Selling,Word of Mouth Marketing — Paul McCord @ 7:32 am
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We’ve all heard the advice: turn your clients into your mini ‘sales force’ by encouraging them to tell others about you and your business.  Word of Mouth Marketing is touted as being the easiest and best marketing any salesperson, professional, or business can hope to get.  Not only does it get your word out, but nothing is more powerful than a customer telling others about how great you are.  Customers will flock to your door if your clients create a buzz about you.

There is some truth to those statements.  If you can get your customers to create enough ‘buzz,’ you will see an increase in your business.  Customers will come.  Sales will increase.  Nevertheless, for most small businesses and salespeople, the hype about word of mouth marketing is a false promise of easier, less stressful marketing and increased business. 

The problem isn’t with the concept.  A broad, expansive word of mouth marketing campaign can work wonders for a business.  If you can get enough people talking about your product or service—or you, the method can be one of the most effective marketing formats there is.  A spontaneous recommendation from a very satisfied customer is a powerful thing that few other marketing methods can match.

The problem with word of mouth marketing is the breadth of buzz needed in order to see an increase in business–and the passive nature of the method itself. 

True word of mouth marketing seeks to create a substantial level of general discussion and awareness within the community of a product, service or individual business.  This awareness isn’t spontaneous but is rather generated and directed by the company who is seeking the promotional benefit of the marketing.  True word of mouth marketing is typically engaged in by large companies who commit millions of dollars to creating the ‘spontaneous’ viral marketing by ‘customers.’  Often the ‘customers’ who are spreading the word about the product or service are not actually customers but are hired to appear as satisfied customers or are receiving some type of incentive for talking up the product or service.

On a much more modest level, small companies, professionals, and individual salespeople try to create word of mouth marketing by asking their legitimate customers to tell others about their services.  Unlike the major word of mouth campaigns above, these are simply a handful of truly satisfied clients whom the salesperson or company encourages to spread their word for them by telling family, friends and acquaintances about their experience and then encouraging the prospective customer to call the salesperson or company. 

Of course, this mini word of mouth campaign can never begin to reach the magnitude of buzz of that created by the major corporate campaigns, but the hope is the same—increased business through the transmission of the company or salesperson’s message to potential new customers through their existing client base.

Unfortunately, for the typical individual salesperson or small company, the numbers simply don’t work.  Despite their effort to encourage each client to tell others about them, in reality only a small percentage of customers will actually tell anyone else about the salesperson or the company.  Recommendations generally only come when the client happens to hear someone say they are currently looking for the salesperson or company’s products or services, and these occasions of happenstance occur very seldom for any one customer.  Consequently, for the word of mouth marketing campaign to generate a substantial increase in business, the salesperson needs hundreds or even thousands of customers spreading the word for them.

To compound the issue, once the customer has made the recommendation to a potential customer, the prospect must then take the initiative to contact the recommended salesperson or company.  All the salesperson can do is hope the client passes the word along and that the recipient of the recommendation decides to act upon the recommendation and contact the salesperson.

Word of mouth marketing is a passive activity where the salesperson has no control over any aspect of the process once they have encouraged their client to tell others about them and their products.  Either the customer chooses to tell others or they don’t.  Once a client has encouraged a prospect to seek the company or salesperson’s services, the prospect chooses to contact the recommended company or salesperson or not. 

For a small company, professional, or salesperson to rely on word of mouth marketing as their primary method of generating new business is dangerous.  Asking others, no matter how much you trust them or how sincere they are, who do not have a stake in the success of your business is to risk your success and future on chance. 

This is not to say that word of mouth marketing should not be a small portion of your marketing plan.  Word of mouth marketing certainly has its place in the marketing lexicon of most businesses.  It is simply to say that it should play only a minor part in the marketing strategy of your business. 

Nor is it to say that some small businesses haven’t used word of mouth marketing successfully.  For some certainly have.  Most of those who have found word of mouth marketing to be highly successful have tended to be retail stores and others who rely heavily on walk-in traffic. 

Moreover, it isn’t to say that a salesperson or company’s client base can’t be the primary source of new business, for it certainly can, and for most businesses and salespeople, it should be.  However, it shouldn’t be through word of mouth marketing but rather through referral selling. 

Although often used as synonyms, word of mouth marketing and referral selling are distinctly different marketing methods.  As mentioned, word of mouth marketing is a passive activity.  On the other hand, referral selling is a highly proactive marketing format.

Whereas with word of mouth marketing, you have no control of the process; with referral selling, the you retain complete control of the process. 

Referral selling is a process where you work with your client to acquire direct introductions to others your client knows who may need or want your products or services. 

True referral selling is a disciplined process that establishes a relationship with your client that has a predictable outcome—receiving a large number of high quality referrals from the client.

Unlike the referral method most salespeople, professionals, and business owners have been taught, true referral selling isn’t just “doing a good job and asking for referrals.”  That method, like word of mouth marketing is more chance than process.  The most typical result of ‘asking’ for referrals as most have been taught to ask, simply results in the client claiming they have no referrals to give or if they do give a name and phone number, it is most often little better than taking out the phonebook and simply pointing at a name at random.

In order to turn referral selling from being little better than a warm call to a suspect rather than a true prospect, you must develop a referral generation process that:
•  Gives your client an opportunity to get comfortable with giving referrals
•  Lets the client know exactly what a quality referral is
•  Gives the client a reason to give referrals
•  Gives the client ample opportunity to think of quality referrals to give
•  Helps the client come up with several quality referrals to give
•  Turns contacting the referred prospect from a warm call to a direct introduction

A referral process that meets the above criteria turns referrals into a disciplined process where you retain complete control.  You know exactly where the process will end—with several high quality referrals to people you know you want to be referred to and with a direct introduction to them from your client.

Word of mouth marketing is dangerous for the typical salesperson or company if relied upon as their primary marketing method.  It is easy.  It is safe in the sense that the salesperson seldom hears rejection.  But for most salespeople and companies, it cannot produce enough new customers to sustain the business.  The promise of easy marketing and increased business is false because the premise of word of mouth marketing on a small scale is false.

Yet, taking the time and effort to learn how to generate high quality referrals from each of your clients will expand your business many times over by eliminating chance and replacing it with a predictable process to generate new customers.

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