CHAPTER 3
EXPANDED BUSINESS

WHY MORE, NOT LESS, IS BETTER FOR THE CLIENT

WHY NO GOOD DEED (PROJECT) SHOULD GO UNREWARDED (EXPANDED)

A hugely important route for referrals is internal in those organizations that are large enough to support multiple projects (which is why, for example, the small business market is so difficult—you have to continually bring new clients on board). This route is the Interstate Highway of referral travel.

One of the methods I’ve used successfully to make seven figures as a solo practitioner is to work with large organizations that can support continual (and often concurrent) projects. The reasons that this is such fertile ground for referrals include

• Internal buyers can observe the results and value of your work firsthand within their culture.

• The referral system is “hard wired”—that is, buyers are spending time with one another in company meetings, at meals, on trips, and so on.

• You develop an “insider” knowledge of the company and its culture that provides an instant understanding of its needs and challenges.

• There is an intrinsic (and often extrinsic) belief that the investment in your services should be leveraged in future engagements.

• It would require a Herculean effort by another consultant or consulting firm to dislodge you or to introduce a competitive offering because of your entrenched position.

This latter point is crucial. In the military, it’s a basic belief that three times the numbers of an entrenched force are required if an attacker is to have any chance of success in dislodging that force. You have a big advantage being behind the stone wall or inside the gates.

My dictum “think of the fourth sale first” means that you should be continually searching for referrals within your own clients and within your own immediate buyer’s purview.

As you can see in Figure 3.1, there is a “ring” of expected and unexpected referral sources around most buyers. You should diligently list and pursue these sources, since they will vary somewhat from client to client. In setting priorities, I would always pursue the buyer’s peers first if there are any who are in a position to purchase your services.

Not all routes in all clients make sense, of course. Here’s a quick way to determine whom to pursue with the most energy, assuming you’re convinced that the person is a true economic buyer.

1. Trusting relationship. Can you develop (or have you already developed) a trusting relationship with the prospect? Has the existing buyer made inroads for you? Is the person accessible (as opposed to traveling 85 percent of the time)?

Figure 3.1 Internal Referral Routes

Figure 3.2 Setting Priorities for Internal Referrals

2. Fit. Are your services appropriate for the needs and issues facing the prospect? Does the prospect require special expertise (financial, technical, and so on) that you don’t possess and/or in which you have no interest?

3. Credibility. Is the prospect aware of or amenable to understanding your expertise in his or her context? Although you may be quite adept in strategy formulation, for example, if what you’ve done for your current buyer is sales development, the prospect might not understand your further capabilities.

If you have a trusting relationship and a good fit, but no credibility, then you don’t have the “guarantee” and assurance that the prospect requires; if you have a trusting relationship and credibility, but not the fit, then you lack the right tool kit; and if you have credibility and fit, but not a trusting relationship, then you’re no better positioned than an external consultant who has never worked within that organization. In other words, you’ve forfeited your internal referral advantage (see Figure 3.2).

The bottom line is that successful projects in high-potential organizations should always carry the additional value to you of an inside track on future (or concurrent) work. But you have to analyze the situation, establish priorities, and take the appropriate steps.

My estimate is that for most solo practitioners and boutique firms, total client relationships range from two months to nine months. Most of these practices are forced to create at least 50 percent or more in new business annually. But consultants who appreciate and follow this referral advice average between a year and five years with a single client, and need to bring in only about 20 percent of new (unreferred) business a year (which is a healthy combination in any case).

I’ve had six-, ten-, and twelve-year relationships with quite a few clients, and two- to four-year relationships with most. That is a huge difference in terms of lowered cost of acquisition, higher annual revenues, and still further referral business outside of the organization.

“IF YOU THINK THIS IS GOOD”: DEMONSTRATING LEVERAGE

There is a particular mindset that you need if you are to gain referrals and dramatically expand your business. I would describe it like this: You have tremendous value to deliver to your clients. You would be remiss if you didn’t take every opportunity to inform them of, demonstrate, and expand that value so that you are benefiting the client as much as possible.

I’m not talking about revenue or quotas or sales or “closing.” This mindset is a very different starting point. If you’re absolutely convinced of your value and your impact on clients, then you’ll want to assertively seek opportunities to provide it. You’ll never be reluctant or reserved.

Once the client appreciates your work, you will have that much more of an opportunity to expand it. That’s not a risk, not “pushy,” not inappropriate. It’s the natural thing to do.

This is the central point of leveraging your existing business for referrals to gain more business—to spread your value. When I began in this business, I honestly thought that consultants were failing because they were undercapitalized. I even wrote about this.

I’m always surprised by how stupid I was two weeks ago.

I was completely wrong. The main reason for consultants failing is lack of self-esteem. They (yes, you) often believe that they are not good enough, that they don’t belong, or that they’ll be “found out.” But I learned long ago that common sense is in short supply and highly valuable. (About 90 percent of the time, I validate what the client already knows. Only 10 percent of the time do I introduce new and unprecedented approaches.)

Here is a test of your self-esteem. Be honest; no one is scoring you other than you:

1. Do you talk, dress, and behave as a peer of the buyer, or do you take the role of a subordinate, a vendor, or a mendicant?

2. Will you boldly suggest courses of action that involve more work for you on the grounds that the client’s improvement is so strong?

3. Do you vacillate and review your written communications to the client repeatedly so as to strike “just the right tone”?

4. Will you honestly and readily critique the buyer when he is not meeting his goals?

5. Do you speak up at meetings even if your point of view isn’t shared by the majority?

6. Can you separate principle from taste, and will you fight to preserve the former while going along with others on the latter?

7. Do you take prudent risks in order to move things along?

8. Do you allow the client to dictate how you should consult or coach?

9. Are you resilient when you undergo a setback or defeat?

High self-esteem key:

1. Yes.

2. Yes.

3. No.

4. Yes.

5. Yes.

6. Yes.

7. Yes.

8. No.

9. Yes.

For high self-esteem, you need a perfect score!

There’s a difference between high self-esteem and high efficacy. The latter is the condition of being good at something. The former is the condition of having high self-worth, whether you perform well or not.

In Figure 3.3, high efficacy and high self-esteem are ideal. If you simply have high efficacy, but you don’t feel worthy (upper right), you feel like an imposter. And those people who have huge self-esteem but don’t perform well we often call “empty suits” or “big hats, no cattle.” If you have neither, then you’re alienated.

I’ve actually had consultants ask me why a key buyer would ever listen to them! I can’t give them an answer, because at that point I don’t feel like listening to them. That’s why the mindset I first described is so vital.

Figure 3.3 Self-Esteem and Efficacy

Thus, those who are in the upper left quadrant have no qualms about saying to the buyer, “If you think this project went well, wait until you hear about the next one I’m going to propose!” After all, that’s the least you can do for a key client—improve her condition still further.

Here are some situations (we’ll discuss the exact language later in the chapter) in which you should exploit the value you bring to the client:

• You hear of someone who is interested in the current results, and you ask your buyer to introduce you and validate the results.

• You observe or learn of a situation that you can demonstrably improve, even though it doesn’t relate to your current project.

• You develop ideas that can be of tremendous benefit to this client, based on your growing knowledge and familiarity.

• You introduce “best practices” from other clients that can also serve this client well.

• You see logical extensions and expansions of the current project.

How many of these are you routinely searching for? Are they a part of the diagnostics that you apply during client engagements? To what extent are you allowing the client to take advantage of still more value?!

None of us is successful because we correct weaknesses. We are successful largely because we build on strengths. There is no greater accelerator than a positive, visible, dramatic result that you can then leverage to create more such high-potential situations. But you have to be willing to acknowledge your own value, actively engage the buyer in the evaluation, and blow your own horn.

Finally, always keep in mind that the people you are dealing with have professional colleagues in other organizations, vendor relationships, trade and professional association memberships, community connections, extended family, and other connections who may be superb referrals for you.

I hope you’re beginning to appreciate that the sheer number of potential referrals is vast, diverse, and omnipresent. You have to make a point of hunting them down and seeking them out. In other words, you have to be willing to move in many directions simultaneously.

MOVING UP, DOWN, INSIDE, OUTSIDE, AND ALL AROUND

Seeking referrals is more sophisticated than a scavenger hunt but less scientific than GPS. Visualize yourself as being on an intelligent exploration of familiar territory, sort of like moving on and off known trails with a good map.

You can still get lost, but if you pay attention, you should arrive at your intended destination. Figure 3.4 shows you a sample.

Figure 3.4 puts you in the middle, working internally for a client, with a variety of paths to choose for finding people and/or creating exposure for your value.

I was introduced once to the members of a top client team by their boss, who had hired me, who had used my help in a prior company, and who, himself, had once been a consultant in a former life. He opened with, “Alan is a consultant who, like any good consultant, will work closely with us until, like some incurable disease, he has taken root in our systems and we will not be able to get rid of him.”

Figure 3.4 Moving in Many Directions

That brought some nervous laughter (including my own), but I understood his point. Good consultants want to do such good work and meet so many potential buyers that they spread their tentacles throughout the organization seeking sustenance. This is because my mindset is that the organization needs my value, as discussed earlier, not because I’m “searching for business” or “trying to reach revenue quotas.”

In your calendar, or diary, or Filofax^®, or cocktail coaster (whatever you use for critical reminders), you should note the following potential referral sources and check off whether you’ve inquired about them. If you don’t discipline yourself, you’ll tend to overlook sources. Feel free to copy this right out of these pages. Note how many of these sources there are, and that you cannot afford to overlook any of them in any client.

Potential Referral Sources to Be Sought

Buyer peers
Buyer subordinates
People in parent organization
Professional colleagues
Client’s customers
Regulatory groups
Buyer superiors
Client vendors
People in subsidiaries
Acquaintances and friends
Trade associations
Media contacts

My estimation is that it is about 20 times more difficult to bring in new business than it is to develop repeat and referral business. It also costs five or six times more in money and time. Think about it. Asking for a referral or another project within a client takes little time and zero investment. Trying to unearth a new client—to turn a cold lead into a warm prospect and then a hot client—is laborious and expensive in terms of trips, time, and managing the process.

Thus, your hunt for referrals is an excellent investment with a significant ROI.

I like to look at referrals with this kind of stratification:

1. Direct buyer to buyer. No matter which of the previous categories you choose, your buyer provides a direct and personal introduction to a peer who can write a check for your value if you’re convincing. It doesn’t get any better than this.

2. Buyer to nonbuyer. The buyer gives you a powerful reference, but to someone who can’t buy. In this case, you have to work your way up to the new buyer. This can be aided by the fact that a buyer gave you the original reference. As a preventive, it’s helpful to let your current buyer know exactly what kind of person you desire an introduction to.

3. Nonbuyer to buyer. This isn’t all that unusual when you have highly effective staff people who are in the position of finding resources for their own line clients. Enlightened human resource functions can serve this purpose. In large companies, once you prove your worth, many staff people will fall all over themselves to introduce you because you’re a known entity, and the positive fallout will be bestowed on everyone involved.

4. Nonbuyer to nonbuyer. These are tough, and I advise you to put them at the rearmost of your back burner. But they can be useful, since they prevent you from being a complete stranger, and you can rely on some familiar faces. Whatever you do, don’t allow yourself to be trapped in the lower-level strata, because your peers should be at a higher level.

When you’re looking for referrals from nonclient sources—e.g., club members, professional providers, civic connections, family, friends, and social networks—always try to specify who the ideal individual for you to meet is in terms of title, responsibility, and so forth. Otherwise, you’ll be faced with a great many referrals to follow up with, but that might be largely futile.

Before we move on, a few words about social media platforms: with the exception of specific personal services, such as insurance or real estate, the social media are not great places to obtain references (or to pursue them). Of course people have gained referrals and clients there, but it’s not frequent that it’s a good investment of your valuable time. (After all, you could find $100 on the street tomorrow morning, but I doubt that you’ll quit your job and plan to support your family that way in the future.) There are too many people collecting real and virtual business cards these days.

You’re better off with a personal appeal and a personal visit to both solicit a referral and follow up on it. Most people on social media don’t have contacts so much as a “collection” of people who like to develop lists of quantitative names without qualitative impact.

E-mail in one-dimensional, the phone is two-dimensional, and being present is three-dimensional. Referrals are by far best in 3-D.

LANGUAGE TEMPLATE

In the next several pages, I’m hoping to provide some practical language that can revolutionize your ability to gain referrals, expand your business, and extend relationships. First, please consider this sequence:

Language——Discussion——Relationships——Business

Language controls discussion, which controls relationships, which in turn control business. I’m a “purist” on language because I’ve always appreciated its profound impact. Don’t scoff at the difference between “infer” and “imply”¹ or between “denote” and “connote” or between “prone” and “supine”; they have nuanced meanings that increase your ability to communicate.

The discussion that results from your language will create a relationship that, ideally, will establish you as a peer and trusted advisor of the buyer. That relationship will then determine the type, scope, and nature of the business that ensues.

Thus, it all begins with the words you choose.

From what follows, choose the techniques that are most comfortable for you. Modify them as necessary to suit your style and environment. But bear in mind that I’ve developed and captured these from nearly three decades of consulting and coaching work.

Gaining Agreement to Discuss a Topic

You will want to broach the subject of referrals (or anything else, such as an overdue fee or a request for more participation) with a suitable opening. I’ve coined the term rhetorical permission, which looks like this:

• “May I raise an important issue at this point?”

• “May I take just a minute to review something we’ve discussed earlier?”

• “Could we discuss an issue on my agenda at this point?”

• “If we’ve finished on this subject, may I suggest a new one that’s a high priority?”

• “Could I take two minutes to discuss one more issue?”

As you can see, not one of these will result in a “no” or “not now” answer, especially if you are in a peer-to-peer, trusting relationship with the buyer. They are mere rhetorical contrivances to prepare the buyer for the topic. They present a nice segue, and they create an automatic “permission” to proceed.

Citing the Issue

You now want to raise the issue of referrals directly and professionally. If you’ve laid the proper framework, then you’re merely revisiting the subject at this point:

• “Do you recall that at the outset of our work together, I raised the issue of referrals, and you agreed to provide some at an appropriate time during the project?”

• “On occasion, I’ve alluded to the great importance of referrals in my work, and I’d like to pursue them with you at this juncture, given the success we’re seeing with this project.”

• “It’s an appropriate time to discuss referrals, and I have some suggestions for whom some of them might be.”

• “The sixth action point we had agreed upon was to discuss referrals three-quarters of the way through the project, and that day has come!”

• “Referrals are the coinage of my particular realm, and so I am diligent in trying to develop these from outstanding clients such as you.”

Asking

If you don’t ask, you don’t get. (Professional fund-raisers actually call this “the Ask.”) The language should be concise and clear:

• “Can you offer me three names of people who, like you, could greatly benefit from this type of value, and would you be willing to introduce me to them?”

• “At this point, which people in your communities would be most appropriate for introductions for me and the value of my work?”

• “I’ve noted six people who may be strong candidates to consider this type of project for their own operations. I’d love to get your advice about that and, if they are appropriate, your introduction to them.”

• “Who is there outside of the company and beyond those of whom we’ve already spoken who may be ideal beneficiaries of this value and development?”

• “What three names would be the priority contacts to consider this type of project and outcome for their own operations?”

Deflecting

You will see resistance or forgetfulness or procrastination at times (although the stronger your relationship with the buyer, the less you should encounter this). Here are samples of resistance and rebuttals:

• “I wasn’t really prepared to discuss this yet.”

• “I understand. I’ve brought some names to get your reaction, and perhaps we can build upon them.”

• “I’m a bit uncomfortable that others may think I’ve sent a salesperson after them.”

• “That’s not how you see me. If you think there is value in what I can do for them, then you’re doing them a favor, not creating an imposition!”

• “Why don’t I approach them for you? Let me know what you’d like me to say or to give to them.”

• “That’s not fair to anyone. I can’t allow you to do my marketing for me, and they will inevitably have questions about my approaches that you won’t be able to answer.”

• “Let me give you their assistants and human resource support staff.”

• “That’s not going to work, just as it wouldn’t have worked with you! Their assistants, with the best of intentions, will try to shield the boss.”

• “They are probably traveling or extremely busy at the moment.”

• “As are you and I, but we have to start somewhere. I promise to use discretion and would never ‘hound’ anyone whom you recommend.”

You can see that setting up the request, making the request, and deflecting innocent procrastination about the request are easily handled using the proper language. And always give this option:

• “Ideally, I would love a personal introduction at a meeting, or by phone, or by e-mail. But if that’s not possible, I’d like permission to use your name and our work together when I contact this person.”

Try to never accept, “You can have this name, but don’t mention me.” Find out why there is that reluctance to be involved.

Remember, this is a three-way favor, and with that attitude, there should really be no reservation about providing a referral to someone else who would be demonstrably improved by doing business with you. Find the cause of the reluctance when you encounter it, and deal with the reason (for example, the person doesn’t like salespeople to call) so that you can provide the appropriate assurances.

WHEN YOU HIT THE CEILING, AND HOW TO GO THROUGH IT

There are occasions when you seem to have reached the end of the referral chain. The buyers have no more names, you’ve exhausted the various internal and external avenues discussed earlier, and the mine’s ore is seriously depleted.

The smaller the business, the more likely it is that this will happen. But it will also occur when

• Your buyer moves (transfers, retires, is recruited elsewhere, or is fired).

• You’ve been as diligent as you can, but you want to stop short of stalking the buyer.

• Company policy prohibits it.

• The buyer’s personal preferences discourage it (for example, a very timid person who does not like to “impose” on others).

• A referral objected because either the buyer or you calculated incorrectly as to the “fit” and receptivity.

• There are confidentiality issues.

So there will be times when you seem to have hit the “ceiling” and there is no higher place to proceed. Before ending this chapter, I’d like to give you some advice on how to prevent this and/or deal with it contingently, since I think at this point you’ve come to appreciate how much value a client provides for your referral system and future business.

1. Develop a Multitude of Referral Sources

Don’t rely solely on your buyer. Develop these people as well:

• Nonbuyers with whom you implement and interact, who can provide introductions to (or at least names of) true buyers elsewhere

• Prospective buyers in the organization with whom you are not doing business but who are accessible

• Nonclient personnel you meet in the course of your business

Hint: Act as if you’re doing a 360-degree assessment of the buyer. The people you would include in that assessment circle are those who may constitute additional reference sources!

2. Institutionalize Your Work

Document your work thoroughly so that it has permanence beyond the buyer’s memory or your mutual discussions. You can do this by

• Providing interviews for internal client publications

• Providing learning aids and job performance tools that are tangible and enduring

• Creating newsletters, CDs, downloads, videos, and so forth that maintain your contributions very visibly

3. Create and Maintain Ongoing Relationships

You can “stay in the loop” by

• Providing electronic or hard-copy newsletters

• Exchanging holiday cards

• Joining organizations that the client belongs to

• Serving as a reference for the client as appropriate

• Remembering key anniversaries or activities

4. Offer Complimentary Services

Sometimes it’s better to invest in your future with a client than to try to make money immediately. (“Think of the fourth sale first.”) There is nothing wrong with

• Offering to speak at a company conference or event

• Performing an “audit” on progress semiannually

• Acting as a “sounding board” for your buyer if a critical event develops

• Appearing as a guest or observer at company functions, celebrations, and special events

5. Join Appropriate Trade and Professional Organizations

Especially if your client is already a member, you may be able to join as a member, an affiliate, or simply a guest to remain connected with your client and important others in the industry or profession. This might include

• Serving on professional panels

• Writing in the professional literature and on websites

• Learning the present and future “hot buttons” of the industry

• Meeting the “movers and shakers” in the business (typically, any board member is a potentially great referral source)

• Reconnecting with your client in relevant circumstances

During my career, I consulted with dozens of pharmaceutical, newspaper, and banking clients concurrently. That’s because I was receiving referrals within the industry from my clients. The competitive taboos we often hear about are not borne out in reality. I was always careful to alert my clients about who else I was working with (I could hardly claim, as a large firm could, “We have a different team on that!”), and I never once received an objection over 25 years!

In fact, in most cases, these were the suggestions:

• “I used to work at Acme, and they could use you. Contact my old boss, Harry.”

• “My sister-in-law was just promoted over at Universal, and she desperately needs help. I think you’d be perfect. I told her you’d be calling.”

• “I met someone at a trade association meeting, and his internal people are not getting the job done. He needs a good consultant, fast. Mention my name; I may need the favor returned some time.”

• “We’re going to be getting into a joint venture over there, so I want to send you over to our initial contacts now.”

Even when you seem to have hit the ceiling, you can find ways to continue to generate referrals. Most consultants give up too early. They give up when they’re told, “I just can’t think of anyone.” (This is like giving up when a prospect says, “We just don’t have any money.” Of course she has money; she just doesn’t see you as a priority destination for it!) You’ve gone far beyond that here, but I’m telling you not to give up, even when you may believe you’re at the end of the road.

Let’s look now at how to exploit this “platinum standard” for developing new business.