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Tom Ogden's Blog

Maximizing Client Referrals--A Lost Opportunity for Most

Referrals are the largest, most reliable and most cost-effective source of new clients for professional service providers. Studies show that referrals account for a phenomenal 88 percent of new-client business. Furthermore, the fastest-growing firms are more likely than average firms to grow through referrals. The results speak for themselves; top performers are growing twice as quickly from client referrals as are average firms.

Moreover, it requires virtually no incremental costs to pursue referrals effectively. Incidental expenses, such as lunches or small gifts to thank clients for their referrals, easily pay for themselves as business grows. Best of all, most clients are happy to help. A survey of more than 6,000 professional service firms revealed that 90 percent are comfortable referring friends, family and colleagues.

I believe that the foundation of a solid marketing and business development strategy needs to begin with a game plan for referrals—especially from exist clients. Whether you choose to directly ask clients for referrals or not, your plan should be a conscious choice that involves tactics, assigning accountability, setting goals and measuring progress. If you ignore client referrals as part of your plan, you are starting with half a plan.

Yet in spite of the clear opportunity, many firms fail to tap the growth potential in referrals because they don’t have a defined process for doing so. Even firms that get a fair amount of referrals leave opportunities for greater growth on the table by not having a systematic method for generating referrals.

Firms that I’ve worked with do not see the opportunity at the outset. Firms that put a strategic process in place and that are open to change, have seen a doubling of the number of referrals from clients in the first year alone. Do the math—a few extra hours, a few extra dollars, concentrating on your main source of revenue and typically the easiest to work with—your clients.

Take a proactive, not reactive approach to client referrals and you will be amazed at the results.

~tom

 

 

 

Time: Use it Well

Imagine a bank that credits your account each morning with $86,400. It carries over no balance from day to day, allows you to keep no cash and every evening cancels whatever part of the amount you had failed to use during the day. What would you do?

My guess is that you would draw out every cent. Well, everyone has such a bank. Its name is time. Every morning it credits you with 86,400 seconds. Every night it writes off whatever you have not invested to good purpose. If you don’t use the daily deposits, the loss is yours. There is no borrowing against tomorrow. So, you must live in the present on today’s deposits. Invest it so as to get from it the utmost in health, happiness and success. The clock is running.

To realize the value of one year, ask a student who has failed a grade; one month, ask a mother who has given birth to a premature baby; one week, ask an editor of a weekly newspaper; one day, ask a daily wage laborer who has kids to feed; one hour, ask the lovers who are waiting to meet; one minute, ask a person who has missed the train; one second, ask a person who has avoided an accident; one millisecond, ask the person who has won a silver medal in the Olympics.

With 8,760 hours in a year, why is it that there are so many times we are looking for just a few extra minutes in order to get things done? How often do you find yourself in a continuous time crunch? I know I do.

There are books, software and other time management systems offering so-called proven strategies that will help us discover our values, organize them, improve our productivity and live with greater satisfaction.

Whatever system you choose, similar to evaluating a budget, one must first know what is being spent and where—only then can one determine what is the proper amount and what needs to be evaluated. Same with our daily time.

I work with a number of professional service firms and the challenge is not to identify where the billable hours are spent, but instead, where did all of that non-billable time go? Putting business development time, prospecting, referral meetings, and similar strategic growth initiatives on your calendar and as a priority on a regular basis, will allow you to identify how much time has been wasted and give you an opportunity to make this productive and rewarding time in your day.

Start small…a couple of hours per week. When you start seeing results, increase it by a few hours and you will really benefit.

~tom

 

It All Goes Back in the Box

This is the time of year when we look forward to the end of an extremely busy and hurried time of the year—the holiday season. Filled with emotion, both good and bad, often at the conclusion of this period, some of us take a moment to reflect on what we are going to do different this year, what we are going to stop, what we are going to start, or maybe how we are going to slow down. And we need to slow down, but our environment wants us to speed up.

Everything around us says quicker, better, faster and hurry up already! U.S. Postal Service, who is in dire straits, is called snail mail, being replaced by much faster e-mail. E-mail is not fast enough for some, so texting is a nanosecond faster. We often value time more than quality and price.

In 1967, expert testimony to a committee of the U.S. Senate stated that due to technological advances and the labor-saving, time-saving technology, that in 25 years, people will work 32 weeks per year, 22 hours per week and retire by age 40. Is this the situation today? I think not.

What I am suggesting is that some of us have what I call Hurry Sickness. For most of us, there is are not enough hours in the day. When you come to a stoplight and there are two lanes, do you find yourself calculating which car you should get behind so you can proceed through the intersection the fastest? You assess the makes of the cars and whether one is a sports car or not. You get behind the sports car if you have this sickness. A similar reaction can be seen in every grocery store check out lane.

We say that things will slow down, or that we’ll do it when we have more time, later. But we don’t have more time later. Some say, “When I finally have enough, when my barn is finally full, when I am financially secure, when I get that ultimate promotion, when I’ve stored up financial security, then I’ll have time for what is really important.”

In the meantime, what do you do with a cold marriage or one that has failed altogether? Or with children that learn early that they are not as important as a briefcase, a meeting, and a garage full of stuff? It is similar to the main objective of the best-selling board game of all times—accumulate everything. In Monopoly, possessions are a matter of survival and hanging on to our money is what it is all about. But, like our lives, “it all goes back in the box.” None of it is really yours—you just hang onto it for a while.

Filled barns and bulging portfolios don’t make a difference. Beauty, money, fame, or power doesn’t do it. So while you can, look around you and decide what is really important, because one day, it will all go back in the box.

~thomas ogden

 

 

 

Maximizing Client Referrals

Client referrals are the largest, most reliable, and most cost-effective source of new clients for many firms, yet most firms still fail to tap the growth potential in client referrals simply because they do not have a defined process for doing so. The fastest growing firms are more likely than the average firm to grow through referrals. Results of recent studies show that top performing firms are growing twice as quickly from client referrals as are average firms.

One of the most important components of a solid marketing and business development strategy needs to begin with a game plan for referrals—especially from existing clients. Whether you choose to directly ask clients for referrals or not, your plan should be a conscious choice that involves tactics, assigning accountability, setting goals and measuring progress.

Without a system and process in place, referrals may trickle in, however, including this important aspect into the strategic marketing and business development plan and the referral process becomes an income generating business strategy.

 

Are You Really Different?

I’m hearing this often and sensing it even more as I speak to those running professional service firms. “We are becoming a commodity. The prospects just seem to buy on price.” And if we know we are good, that is a start, but not the solution. The question is…how can I really separate myself from the crowd?

Asking what makes you different is just the beginning. Matter of fact, it is normally the beginning of a long session. Typical answers revolve around their great staff (I hope so, I hired them). Customer-focused (that’s nice). And some claim that it is the more than 100 years of collective experience that draws the prospect like a magnet to sign the engagement letter.

The problem is that all of these comments come from the service provider’s perspective. So how do you develop a value proposition that offers value and generates leads, meetings and new clients?

  • Think of what client needs you can fill, not what services you can offer
  • Ask your clients. This is the best source for information, good or bad
  • Use words your clients use, not marketing lingo

After this, construct a value proposition and test it with members of your firm, friends and colleagues and adjust based on the feedback. You are now ready to test with actual prospects, at networking events or your next phone call.

By putting yourself in the prospect’s perspective you will be able to place tangible value in your communications.

~thomas ogden

 

New Business by Storytelling

If you have been in a sales presentation and couldn't relate to what was being said, I have a hypothesis. Many times the presenter, especially in a technical field, gets too technical when what they need to do is be more practical. Technical information can be dangerous in developing new business because potential customers fail to understand how you can help them achieve success. So if you want to earn more business, realize that your clients only care about whether you can solve a problem they are experiencing or how your service will make their lives easier.

The next time you feel you are getting too technical, replace your technical jargon with success stories. Storytelling is an effective part of winning new business because it:

  • Allows potential clients to understand what you do;
  • Helps potential clients to understand how you have helped other clients;
  • Enables potential clients to get a glimpse of how working with you can better their lives; and
  • Provides you with a competitive advantage

Check out Whoever Tells the Best Story Wins by Annette Simmons. You will be on you way to better prospect meetings and closing more deals.

~thomas

Call To Action Closes Deals

There are many new philosophies these days about business development and books are published daily that identify new methods for the "new normal." Problem is, people have not changed to the extent that business has--it's still about relationships, and expectations. Going all the way back to Xerox and IBM in the '80s, one method is still 100% applicable to the challenges in today's business world. Call to Action.

You propose a course of action that requires the prospect to do something. The psychological rationale behind this is that if they take affirmative action that reasonably leads them in the direction of becoming your client, there is a higher probability they will eventually complete the journey. If you have a strong, confident style, you might say, "I'll need you to sign an engagement letter. It defines all of the terms and conditions that relate to our relationship."

If that is too direct for you, try, "I think I've answered all of your questions. If your decision is to move forward with us, we can go over the paperwork now with you."

You get the idea? It requires the prospect to respond with something other than yes or no; they are forced to make a decision. What you don't want is for them to shake your hand and say, "I appreciate your time. Let me think about it and get back to you." Don't hold your breath. You are better off knowing now that it is not a good fit as you can move on to a better prospect.

~thomas ogden

The Perception is Reality Principal

Perception is reality and feelings are fact. A common definition of reality is whatever you can perceive clearly. For something to be real to us, we must not only perceive it; we must perceive it clearly. Because people cannot clearly perceive your technical expertise, they must rely on other things to indicate your competence.

The key factor in client satisfaction is not how good you are at your profession, but how your clients perceive you--in other words, your image. The key factor in marketing success is not how good you are at your profession, but how good prospects and referral sources think you are. Good marketing causes a client or referral source to think of your when they have the opportunity to recommend a professional.

Your clients may not be able to tell how well you do research, but they can clearly perceive whether you keep your library neat. They may not know if you are up to date on the latest developments in your specialty, but they notice if your receptionist mispronounces their name.

The perception-is-reality principle holds true because client have no means to judge your internal quality or competence. They need to fall back on the things they do feel competent grading you on. Then their evaluation of these nontechnical areas carries over to your technical performance.

Perception is all there is. There is no reality as such. Reality is only what we perceive. And what we perceive is our reality. Clients and prospects are no different. To them, feelings are facts.

Take time to reflect on what you can do to improve the perception to those you deal with. Little things make a huge impact.

~thomas ogden

Quantify Marketing for Success

So they want you to quantify your marketing? Well, sounds like that's your responsibility right? Well....maybe, but let's take a closer look. The professional services industries are clearly under-marketed, and why is that? Marketing is not easily quantifiable. Expenses go out that are strictly and succinctly defined but the revenues coming in are often difficult, if not impossible, to attribute to a particular marketing initiative. Those that really "get" marketing understand that although it is hard to measure, some things you cannot. That's OK. Many define that as branding. Why did it happen? Probably a number of activities bringing your brand top of mind when the prospect is ready to buy.

But there is more. Marketers can only measure what they can measure, but providing additional opportunities for partners to be face to face with interested and qualified prospects is a no-brainer. CAUTION: Hold them accountable. I just heard from a marketer who had a referral source provide a prospect to his firm, and the partner took two weeks to contact them. The rest of the pursuit of this prospect didn't go any better. A phone call to this prospect provided valuable information. Summing it up, the prospect stated, "I want to do business with someone that truly wants my business. They were arrogant and made me feel like I was lucky to have the opportunity to meet them. This is not the relationship I was looking for."

Marketers, follow up with your partners to the point of being annoying. They need to understand the urgency when a referral source, client or other connection provides you with an opportunity. Oh, and by the way, thank the referral source in a way that is appropriate. A wealth manager I know just closed a deal providing his firm with $10,000 in annual revenue. A gift basket of wine and cheese was greatly appreciated and will be talked about for years. (A $75 investment)

Marketers, create the system and hold them accountable.

~thomas ogden

Business Development Through Strategic Alliances

W. Alton Jones once said, "The man who gets the most satisfactory results is not always the man with the most brilliant single mind, but rather the man who can best coordinate the brains and talents of his associates."

How true this can be even for professional service firms. Prior to about 10 years ago, it was popular to be a generalist, claiming to provide services for every clients' need, whether experience existed or not. Then came the niche-building phase. "If you are going to be successful, you must specialize....," the experts said. Firms marched into board rooms, hired outrageously paid consultants to facilitate brainstorming sessions to identify and define the specialized areas of focus.

Today, successful firms realize the need for relationships called strategic alliances--a way to grow their practices without increasing staff, developing in-house expertise, or assuming unnecessary risk. Alliances allow firms to leverage each other's strengths and expand services in order to improve market position effectively compete for larger and more productive engagements.

Not enough time not enough people, not enough resources? Consider strategic alliances.

~thomas ogden

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