Attracting new customers is at the heart of every business. Active participation in a community can make you more visible and allows you to demonstrate expertise.
Excerpts that I found thought provoking and useful from an interview with Jeff Bezos in the October 20017 Harvard Business Review.
A lot of is written these days about how to conserve cash in a downturn. In particular the need to cut expenses by cutting headcount and unnecessary fill-in-the-blank spending. But conserving trust is equally important. If you have been bootstrapping and only increasing expenses in response to revenue (versus in anticipation of revenue) then your next question might be “What else can I do?”
Ridge Evers wrote “Guiding Your Business Through the Recession” in March of this year. For me it stands out as the best “top ten” list for surviving this downturn. It starts off with two good suggestions for protecting your current revenue by making sure you stay intimate with your best customers.
1. Focus on your existing customers – Figure out how to keep them. Remember, they’re under the same pressures you are. Make sure you’re the one they want to do business with when things get tough. But don’t make the mistake of becoming their bank by extending too much credit.
2. Make sure you know your best customers, and that they know you care about them – Who, specifically, is your buyer? There’s an old expression in sales: “know your customer’s shoe size.” It’s always a good idea, but especially in an uncertain economy. If you sell to other companies, you need to understand them at the individual level. Communicate frequently, but take the time to make your communication relevant and interesting.
His list is the only one I have read that also addresses the need to remain trustworthy–and therefore creditworthy (hyperlinks added):
5. Conserve creditworthiness – Just like you don’t want to be your customers’ banker, don’t get into the position of being overextended with vendors, especially the ones you really depend on. This is often the opposite of what your instincts are – we all think our key vendors need us, which is true right up until they decide they can’t afford you as a customer. If you have to stretch payments, do it with ancillary vendors, and don’t wait for them to call you – tell them that you’re going to pay them later than you think you can, so you then pay them sooner than you said you would.
6. If things are tight, pay off all the little bills first – You’ll spend as much time and energy answering calls from the little guys as you do from the big ones. And remember the old adage: “If you borrow $1,000 and can’t pay it back, you have a problem. But if you borrow $100,000 and can’t pay it back, the lender has a problem.” Your bigger vendors will work with you – they don’t want to lose you if they can help it. So pay off the little guys, and then communicate with the big ones openly and frequently. And pay something – it shows good faith, and makes it harder to cut you off.
Evers wrote an earlier post in December of 2007 “Should You Raise the Ceiling or Lower the Floor” which used a great visual metaphor for business planning: headroom.
Essentially, a business has “made it” when you can stand up inside the “room” that you’ve created. Obviously, there are two different ways to create more headroom: you can raise the ceiling (revenues), or you can lower the floor (expenses). It’s a physical analogy, but one that I’ve found is really useful in both understanding what’s going on, and in figuring out what to do.
Many owners spend a lot of their time focused on controlling costs (lowering the floor). Some degree of this is healthy, especially when it comes to building a culture within your company that encourages thrift. It’s also the easiest thing to do when you hit a bump, generally, because expenses are something you can control. But it is exceedingly rare that cost control – in any size of business – paves a path to success. The best you can hope for is to buy time.
Most bootstrappers tend to be risk averse: they have all of their eggs in one basket so they have to guard the basket. Given that, attacking an existing expense stream makes a lot of sense, it’s much more tangible than identifying and attempting to exploit an opportunity. Cost management and accounting tools are more mature, especially for small businesses, than marketing and opportunity identification tools. What’s the marketing equivalent to QuickBooks for a small business or a VSB (very small business with less than 15 people, less than four million on revenue)? Please contact us if you know of or are using a good one.
I think for the most part cost saving requires less change in behavior (obviously there are exceptions like the lean model, which requires a fundamental re-think, and some well constructed re-engineering efforts) than going after new customers and so requires less “social cost” inside the business to implement. The negative side effects from a cost savings effort typically take a while to manifest, where the costs savings themselves are normally quickly available.
The place where the most successful business owners focus their energies is on raising the ceiling: growing revenues to the point where the business can stand up comfortably, and keeping it there. And, paradoxically, in many cases the path to a higher ceiling involves increasing expenses – for example, adding a new salesperson, upgrading equipment, or investing in marketing – so as to be able to attract more customers or increase sales to your existing customer base. (More about this in a later posting, but as the old saw goes, “You have to spend money to make money.”)
“What else can I do?” Give us a call.
Our promise is “early customers and early revenue” and our focus is on “raising the ceiling.” We work as virtual members of your team to build on your strengths: your current customers and current products. We help you to sell better what you have. We use low cost methods to explore current and potential markets for new customers. We gather feedback from your current customers, prospects, and lost opportunities, looking for ways to improve your offering to meet their needs more completely.
And we teach founders how to do all these things for themselves over time because we believe that this is the best way to build trust and a long term relationship. We started this firm in 2003, some of our early clients had barely survived the dotcom bust of 2001-2 and were concerned about how to add new customers: we’ve “seen this movie before” and understand how to help you spot the opportunities that are available.
Startups survive because they can live on the scraps of a market (a niche) that larger competitors ignore or would be unable to pursue profitably. This is doing less with less.
The last six weeks or so I have encountered a number of folks who have decided to use the downturn to launch their consulting career. Typically they have been encouraged in this by their former employer who has given them a large check a lot of free time. But some have chafed at cubicle life and left without monetary encouragement.
Most are “consulting until they find a full time job.” Or consulting to make a little money until they get their next job. Or they wanted to take it easy for a while because they have been working hard and just consult.
My approach is to be helpful but not encouraging until they have shed a few key but crippling illusions.
- It’s easy to move between consulting and a full time job
- It’s easy to establish a practice
- It’s quickly lucrative
Unless a job is “temp to perm” it’s normally not a useful interview strategy to inquire if you can become full time if you do a good job. If you want a full time job you are better served to focus on finding a job and associating with other job seekers, who have a fundamentally mindset from consulting associations.
It’s a lot of work to establish a new practice. Some consultants are lured into believing that it’s easier than it really is because a friend or former co-worker gives them an opportunity very quickly. This ultimately causes them several problems. They stop prospecting and marketing their services because they are approaching their consulting career in the same way that they approached regular employment. When their assignment ends, unless they convert to perm–and let’s face it if your friend was going to hire you full time they would do that initially instead of hiring you as a consultant, they are back at ground zero.
If you’ve been laid off and believe that you want to consult here are six things you can do that will stand you in good stead.
- Cut your personal spending to the bare minimum right away. The vagaries of private practice are such that you will always want a cushion for lean times and you will need to invest in marketing and other practice building activities.
- Assume it will take between two and five years to get established. If you are not entrepreneurial (and at least a little crazy) then look for full time work. In a downturn take a job that’s “beneath you” and continue to look for a full time job that you want.
- If you do get hired as a consultant don’t the assignment full time unless it’s just two to three weeks and requires full time. Always take a least fours hours a week to look for more clients and continue to observe rule #1 (keep personal spending to a bare minimum). Work assignments at one third or half time so you can find another client and work both in parallel.
- Whenever you ask someone else for help, be clear on how you can help them. Go beyond quid pro quo to help folks when you can, even if the immediate payback to you is not clear. But never just take.
- Don’t confuse a professional consulting organization with a job search group. Folks in a job search group expect to be a member for perhaps three to six months. Professional consultants expect to be at it for a long time.
- Put your free time to good use. Too many folks think because they aren’t getting paid they shouldn’t work at something. Volunteer or offer to help someone else at little or no cost. Make commitments and honor them even if you get busy. Idleness and a loss of structure are extremely corrosive to work habits and a sense of self-worth.
Some related posts:
- Oct-27-2008 “Customer Development For Consultants in a Downturn“
- Aug-8-2008 “Understand, Believe, Act“
- Jul-17-2008 “What Can I do to Build Referrals?”
Many start-up founders believe that the sales process should be this straightforward:
- Get the phone to ring (or e-mail inbox or skype or web contact form)
- Tell your prospect about your offering
- Take the order
Alas it is normally not this simple, especially if you are selling to businesses. We do encounter some startups that are looking for “smarter prospects” who will buy after they explain their offering but the typical business customer has a more complex buying process. At a minimum the prospect needs to understand your offer, to believe you can deliver the benefits that you promise, and to act based on an important if not critical business need.
It will normally take multiple interactions with a prospect to turn them into a customer. For business customers this may take weeks to months. This means that you will need to keep track of more than one prospect and more than one contact with each of them. Even for those readers blessed with a powerful memory this will require a system and a systematic approach. There are number of software tools available to track contacts/prospects:
- E-mail based such as Outlook
- PC centric such as Act!, Goldmine, or an Excel spreadsheet
- SaaS based such as Salesforce.com or SugarCRM On Demand
Any of these are acceptable provided that you enter a minimum amount of information for every prospect and every contact with them. To be able to determine if a particular lead generation approach is working you will need to track the source of each prospect’s call and whether or not you ultimately won their business. This allows you to reinforce methods that are working with more time and budget, and to adjust or discontinue methods that fail generate calls that lead to revenue.
We believe that you need to be tracking the following:
- Opportunity (Contact Name, Company, E-Mail, and Phone): If you are selling to a business you may need to group several different contact names under one company or opportunity name.
- Source (e.g. Person, Event, Ad, URL): Be sure to track the path that each prospect followed to find you. Ask if it was a referral (if so from whom), a search engine query, an advertisement, a paper or blog post, or a speaking engagement.
- Status in sales process (e.g. Initial Contact, Percolate, Pitch/Demo, In Evaluation or Benchmark, Quoted/Proposal)
- Next Action Date: Always get clarity with a prospect on when you will contact them next, even if they plan to contact you (e.g. “If I don’t hear from you by Wednesday I will call you Monday of the following week). This should be less than six weeks and is normally one or two weeks for an active prospect.
- Quoted – Proposal Expiration Date. Never put a quote or proposal in front of a prospect without an expiration date. This sets up two natural follow up points: before it’s due and after it’s expired. This also allows you to have a discussion about their decision time frame (e.g. “How long would you like the quote good for?”).
- Win/Loss: Always follow through and determine if they ultimately selected another vendor and if they did buy, why did they buy.
Startup founders with an engineering background tend to focus much more on the tool, and selecting a tool, and less on the daily follow through needed to track essential information for each contact with every prospect. For most of the firms that we work with, until they are really scaling up, Excel or an on-line spreadsheet will work just fine. If you have less than 100 leads–not suspects but firms that have actually contacted you and demonstrated interest and a business need–just use Excel and bake the update process into your daily practice.
The third form of happiness, which is meaning, is again knowing what your highest strengths are and deploying those in the service of something you believe is larger than you are.
There’s no shortcut to that. That’s what life is about.
Martin Seligman interview in Edge “Eudaemonia, The Good Life“
Here are three activities to cut back or stop altogether:
I was fortunate–although I didn’t realize it a the time–when our television screen gave out with a blue flash and a loud pop late last year. We took it into the shop and there were several weeks of diagnosis trying to determine which part to order and then realizing that the part would cost as much as a new set. We went shopping for a new one and couldn’t decide. At that point something funny happened. We stopped shopping because we realized we were getting more done and the boys were much better about chores and finishing homework. In the end we hooked up a projector to the DVD player and stuck with Netflix but have yet to replace the television.
OK, on those last two do as I say not as I do. That’s the problem with proverbs and rules of thumb. For challenges in the realms of idealized problem solving like mathematics or chess (anywhere there are child prodigies), you can learn a lot from a proverb. But many insights in life can’t be reduced to writing, especially those involving either self-mastery or other people (and startups, alas, involve both).
If you read the history of an event how does that compare to living through it? Can you learn to ride a bike from a book? The challenge with a startup–like many other things in life–is that you need to integrate many different inputs, your own hopes and fears among them, and negotiate a working consensus with your co-founders.
Things to do in your newfound time
- walks or other exercise: obligatory, again do as I say not as I do
- reading books: an excellent way of visiting another world or appreciating another perspective. They help to pull me out of a rut and give me access to information that’s not part of casual conversation or the daily news cycle.
- more time with your family: things change. At this point I find myself listening to Rush‘s “Time Stand Still” more frequently, I just want to savor things as they are.
- reconnect with old friends and co-workers: they are your tribe. Not that you can’t make new friends.
- visiting nature, a museum, or other thin places where you can appreciate beauty: I was “home base” tonight for the Trick-Or-Treaters and I spent the early evening feeling a storm moving in and looking up at the clouds gliding across the sky. It reminded me of my boyhood: some days I miss St. Louis.
“Time Stand Still” lyrics excerpt:
I’m not looking back
But I want to look around me now
Time stand still
See more of the people and the places that surround me now
Freeze this moment a little bit longer
Make each sensation a little bit stronger
Make each impression, a little bit stronger
Freeze this motion a little bit longer
The innocence slips away
Entrepreneurial focus means answering three questions: what are we good at, how can we tell and how do we measure it, who wants it and how do they value it?
There is a risk of complacency for start-ups (and even larger firms) who have achieved a level of security in their first niche. Markets change, consumer needs change, and you need to continue to explore opportunities to sell your offering to new customers–non-customers–even though it’s a much harder sales process than a renewal, upgrade, or follow on sale to an existing customer. Peter Drucker warns about this in an interview in February 2002 issue of Information Outlook (hat tip to Pauline Harris “Peter Drucker’s at it Again!“)
Companies may know a good deal about their customers. They know nothing, as a rule, about their non-customers — the people who should be our customers but buy from someone else. Why do they do that? And yet it is the non-customer where important changes always start first.
It’s consistent with a 1994 article he wrote for Harvard Business Review entitled “The Theory of the Business.” He offers department stores as a cautionary example of a set of firms who had high customer satisfaction but didn’t realize that they were losing share. There were not talking to any non-customers, assuming that they weren’t customers because they couldn’t afford to be when in fact tastes were changing.
I was reminded of the value of talking to non-customers by a September 16 blog post by Brian Bailey entitled “Bye Bye Cadence.” Recent events may have rendered the title unintentionally ironic but the article relates a conversation Brian had with some Cadence employees after he gave a talk at CDNLive! (the exclamation point is part of the name).
Afterwards I was talking with a group of Cadence employees. They said that the total cost to put on such a show was significantly less than what they usually had spent on DAC. In addition they did not have to constantly look over their shoulders to see if someone was listening in to their conversations and the quality of the people who attended was so much higher than the leads they got from DAC. One person asked if they thought Cadence would ever go back to DAC. The consensus answer was – I don’t see why we would ever want to return to DAC.
I left a comment on September 25 (I only mention this to be clear that I am not “piling on” after the recent executive exodus at Cadence) that I wanted to end here with as well.
There is always strong value in a user group and communicating privately with your current customers. Not enough EDA vendors do enough to actually have a conversation with their customers. Full points for Cadence in doing so at CDNLive!
A trade show like DAC allows you to interact with prospects–potential new customers. It’s also a bigger draw than a single vendor (or even single vendor ecosystem) show. To the extent that Cadence wants to launch new products that carry them beyond their current customers they will need to do more than CDNLive! style events.
Clearly Cadence is already shrinking on a revenue basis, I would suspect that avoiding trade shows and other forums that would allow them to interact with non-customers will only allow them to continue to shrink more cost effectively.
Update June 15: What a difference a few months make. Thanks to a comment by Grant Martin on Daniel Payne‘s recent blog post “DAC Transitions Over Time” I learned that Cadence has converted 2009 CDNLive into a series of webinars and is back at DAC with a much bigger footprint than 2008. In fact they are vectoring their customers to DAC for face to face meetings. See http://www.cadence.com/cdnlive/na/2009/pages/default.aspx
CDNLive! conferences give Cadence technology users around the world an opportunity to exchange ideas with their peers as well as with Cadence technologists. However, the current global financial environment is impacting everyone in the electronics industry, including many of our customers. Fewer resources are available to dedicate to critical projects. And travel budgets are limited.
To better accommodate our customers, who have expressed concerns over their ability to travel and take time away from their desks, we have decided to host this year’s CDNLive! Silicon Valley event as a series of webinars. These webinars will be an excellent opportunity for users to share their work and present their papers to an even larger audience—and a wider range of their peers—than what was anticipated at the face-to-face conference.
Our presence at DAC in San Francisco in July will provide an opportunity to meet face-to-face with customers. And this year’s CDNLive! events in Japan, Taiwan, Israel, and India will proceed as planned. We feel the decision to deliver this year’s CDNLive! Silicon Valley as a series of webinars is the right way to help our customers achieve productivity, predictability, and reliability.
Further details on the Webinar Series schedule will be posted as available.
I sent the following E-Mail after a series of conversations and E-Mail exchanges with a founder struggling with entrepreneurial burnout. I thought it was apropos the current angst in Silicon Valley.
Sent: Tuesday, July 03, 2007 3:32 PM
Subject: Please be healthy
It’s a challenge to maintain work life balance, whether it’s the driven by the demands of success or the need to make changes that will make your business work. Please take it easy and make one or two changes that stick (whether it’s walking or diet or meditation or spending more time reading). For me it takes months to change habits, so pick just one thing and make it stick: then a second might be easier.
Just a thought.
We work with a lot of folks who are restructuring or rethinking their business. The stress you feel is not at all uncommon. I have a quote from Gerald Weinberg that I keep handy “What looks like a crisis is only the end of an illusion.” I don’t pass this along to demean or diminish what you have accomplished, but to stress the need to see things clearly as they are.
One other thought: traction is the ability to set and hit targets reliably.
If you find that you are setting goals for things that are under you control (e.g. closing business is not under your control, placing calls or sending e-mails is) that you are not hitting, scale back until you are able to get traction. Free advice from someone who has been there (and returns periodically).
I leave you with a quote from J. R. R. Tolkien that I have found to be an inspiration when I am wandering, worried that I am lost:
“All that is gold does not glitter,
not all those who wander are lost;
the old that is strong does not wither,
deep roots are not reached by the frost.
I have followed Herb Reiter‘s consulting career over the last five years or so: there aren’t very many business development consultants who work with EDA firms, fewer who have the mix of semiconductor and design background that Herb accumulated on the way to honing his business development expertise. He is personable, methodical, and always interested in talking with new start-ups. He gives good advice informed by a perspective on both industry and technology trends. When he met with PicoCraft a while back he mentioned that he had been part of the team at Synopsys that helped to establish PrimeTime as a de facto standard for STA (Static Timing Analysis), building on experience he had gained doing the same for Motive at Viewlogic before they were acquired by Synopsys. I caught up with him recently and asked him to tell the story of PrimeTime’s early customer development and lessons it may hold for other EDA companies, especially start-ups. What follows is an edited (and hyperlinked, good blogging is good linking) transcript of our conversation.
Q: Can you give me a brief bio and some background on the events that allowed you to establish static timing analysis as a viable new tool in the ASIC design flow and PrimeTime as a key player in that market?
I spent almost 20 year in semiconductors, I have seen the consequences of insufficient design tools. For example, in the early to mid 80’s I was part of National Semiconductor‘s plan to bring their impressive portfolio of micro controllers, communication chips, and other ASSPs as mega-cells into the rapidly growing ASIC world. A lack of good tools was the primary reason for this failed attempt.
When I joined VLSI Technology in 1989, VLSI had the best cell-based tools and flows. Their design centers were world-class, working with leading edge IC design teams at very successful companies. I got a close up view of the challenges the development of ASIC core technology represented. As VLSI’s lead in cell-based design methodologies waned, revenues and profits declined and eventually Philips acquired VLSI. After VLSI I joined Viewlogic. After I had been working there for a year, successfully encouraging many ASIC vendors to qualify Motive STA and VCS gate-level simulation as sign-off methodologies. Then Synopsys offered around $400M to Viewlogic’s shareholders and we merged with our former competitor.
Q: It’s rare that a larger EDA firm is able to develop and launch a new product in a new area. As you said, you were part of the Viewlogic acquisition at Synopsys. How did you build internal support to enable PrimeTime to achieve not just traction in the market, but ultimately dominant market share?
At Viewlogic we had been winning accounts with Motive against Synopsys/PrimeTime at Viewlogic. When I “changed sides” many members of the PrimeTime team were interested in our approach. The first thing that I did for Motive and then for PrimeTime, was to narrow our focus from dozens of potential partners to the top dozen technology leaders. Both at Viewlogic and Synopsys my team used the same basic formula: We worked hard to understand our partners’ requirements, developed trust relationships with a dozen ASIC semiconductor vendors. This allowed us to make Motive and then PrimeTime an integral part of their ASIC design flows and the key to timing sign-off.
Just like my semiconductor partners, I had engineering sites all over the world, I wanted my people to be as close to these partners as possible. One of my engineering experts even worked at TSMC in Taiwan, and was instrumental in implementing Dr. Ping Yang’s vision of TSMC’s reference flow number one.
We also waived the PrimeTime training fees for the ASIC Design Centers of our partners. Synopsys’ product group gladly covered the training department’s exploding expenses and was rewarded with a flood of PrimeTime bookings from these Design Centers and their many ASIC customers. Just like TSMC‘s first and second reference flows–which were dominated by Synopsys tools–increased Synopsys revenues at fabless IC vendors, these ASIC Design Center seminars did the same at our big partners and their ASIC customers. Most of the smaller ASIC vendors adopted PrimeTime quickly, after seeing its benefits giving their larger rivals a competitive advantage, and a de-facto Timing sign-off standard was established in about two years.
Q: What were a couple of lessons learned?
Introducing new EDA design tools is a lengthy and difficult process. Gate-level timing simulation was the proven and trusted methodology for timing verification through the 0.35 micron process node. But at 0.25 micron chip complexities and clock speeds increased the challenge of chip level timing closure, 0.18 micron was even more difficult, such that simulation run times approached eternity. Mask and re-spins costs, coupled with the economic impact of being late to market meant that an exhaustive method that guaranteed timing closure was urgently needed. PrimeTime’s static timing analysis offered a comparatively very fast way to do exhaustive timing verification and the product group as well as my team offered excellent support during this transition.
It’s important to note that static timing analysis had been around for more than a decade, Motive had originally been used for board level design. When my ASIC Vendor team at Viewlogic together with the Motive developers introduced it to the semiconductor vendors, we learned a key lesson: People were not willing to abandon a methodology that is working until it seriously hit their pocket book. Eternal runtimes of 0.18 micron chips and expensive re-spins because dynamic simulation is not exhaustive, helped us win STA converts.
Q: How big an issue was library management for the ASIC vendors?
Huge, ASIC vendors were at first reluctant to take on creating and supporting yet another library. One common complaint that I heard many times from ASIC vendors: supporting different libraries for different process technologies was a never ending effort. This huge effort got multiplied by the number of tools that relied on accurate libraries and, to make matters even worse, required a complete update and re-verification, whenever a new tool revision was introduced. I knew that we had to make it much easier for our customers to manage these libraries.
Q: When you talk about AEware (scripts written by Applications Engineers to supplement and extend the base product?
Already at VLSI I have seen our design centers developing a lot of what you call AEware, primarily to overcome tools deficiencies or extend the life of a proven tool. My Silicon Vendor Program team at Synopsys worked very closely with the strong corporate CAD groups at our partners to temporarily give Synopsys tools important capabilities for chip design within existing flows and to demonstrate to the Synopsys product groups the importance of such features–with remarkable success. The product groups, especially the PrimeTime team, adopted many of these scripts and made them integral and professionally supported parts of the next tools releases.
Q: Can you talk about how this experience led you to form EDA 2 ASIC Consulting and what your business is today?
In my role managing the Synopsys Silicon Vendor Program team I really enjoyed being a bridge between the powerful ASIC industry and the innovative EDA industry. I saw PrimeTime, VCS, TetraMax, Physical Compiler and other Synopsys tools getting accepted widely and really making a big difference for our highly interdependent industries. When I started my own firm in 2002 I wanted to replicate my dream-job: Being a bridge between these two industries and bringing to my friends in the semiconductor industry innovative EDA solutions, now primarily from smaller EDA vendors. In the 7 years of managing my own firm I have been able to make a number of contributions to the semiconductor industry. But I still look back at the work I did at Synopsys. Together with the product group and the training department, we laid the groundwork for PrimeTime’s market dominance as a lasting contribution. PrimeTime is still at 87% market share today, almost ten years later, according to Gary Smith EDA.
Networking and Referrals
Networking and referrals continue to be the primary marketing strategy for many community-based small businesses (especially those with limited budgets). In contrast, many technology-oriented small businesses rely more upon on-line forums, social networking sites, user groups, etc. to reach potential customers. I sometimes wonder if more old-fashioned ‘schmoozing’ skills can help these companies get more customers–especially here in Silicon Valley?
Two Different Things
First, we need to remember that networking and referrals are really two different things:
- Networking is the act of putting yourself in an environment to meet and interact with others.
- Referrals happen when someone introduces you to a third party who might benefit from what you have to offer.
I guess it’s a little like dating. You go to a dance to socialize with others (i.e. networking) and hope to get introduced to someone with similar interests (i.e. a referral).Getting a referral from someone is very special. They are sharing their credibility by referring you to someone you may not even know. They are essentially validating that you are real, credible and can do what you say you can do. This short-circuits the sales cycle considerably. While some referrals are nothing more than warm leads others can be considerably hotter!
So how can we all do a better job of getting referrals?
- The first step is to get out there and show up where everyone else in your industry goes. Sure there are a lot of referrals made using emails and over-the-phone but many more are made during face-to-face meetings.
- The second step is to give more referrals! The old adage that ‘givers gain’ is so appropriate. Go out of your way to refer your customers, partners and associates to others who could benefit from their services. After awhile you’ll notice them reciprocating and everyone wins.
- The third step is to simply ask for them. It is amazing how many business owners shy away from ever reminding their satisfied customers that their referrals would be much appreciated. I would also take things further and make referrals a strategic goal instead of a casual thing that either happens or it doesn’t.
Certainly referrals should not be your only marketing strategy to get more clients but it sure seems like every other strategy takes more time, costs more money and rarely gets the results that a dedicated networking/referrals strategy does.
Consulting is a referral-driven business. Here are four things you can do today to build referrals.