Ecología Práctica

You shouldn’t skip steps in the sales process, even with a recommendation. Here’s how you can make the most of your leads.

By Ivan Misner   |   May 28, 2008

When one of your business relationships passes you a referral, don’t assume that the prospect is ready to hear a presentation on your product or service. When an associate passes you a referral, say thanks . . . then start digging for more information.

You will want to determine if what you offer is a fit for what the prospect needs. Taking the time to do this upfront saves a lot of time and energy–for both you and the prospect. Exactly what does the prospect do? What products or services does he want from you? Will your offerings truly fulfill his needs? What is his behavioral style? What are his business goals? How large is his company?

Even with the referral in hand, don’t skip steps in your sales process. Before you approach the prospect, decide on a strategy based on whatever you can find out about him–the same as you would when preparing for any sale. Although the prospect was referred to you, all you’ve really received is an opportunity to approach the prospect with a favorable introduction. (This is not a bad thing–a single referral can open the door to a prospect it may have taken you weeks, months, or even years to connect with–if you even could at all.) But whether the prospect becomes a client or not depends on how well you convince him that what you offer, at the price and under the conditions that you offer it, will fulfill his needs.

There’s quite a bit of difference between a basic referral and one that’s well developed, and there are many levels in between. Here is a list from least to most valuable, and you should consider which level your referral represents:

•             Name and contact information only. Unfortunately, this is what many of your potential sources probably think the first time you say the word “referral” to them. It does represent a certain level of trust in you, but the networking value of this kind of “referral” is low. It’s better than nothing–but it’s not much. As a matter of fact, I would call this more of a “lead” than a “referral.”

•             Authorization to use name. If he says, “Tell ‘em Joe sent you,” you can be fairly sure you’ve established a good level of credibility with him. This gives you some leverage, but the work of developing the prospect still falls on you.

•             Testimonial or letter of introduction. If your source trusts you enough to say nice things about you, try getting him to go a bit further and write you a letter of introduction or recommendation, including background information on you and some words about your product or service.

•             Introduction call. A personal phone call on your behalf, preparing the prospect to hear from you, takes significant time and effort in preparation.

•             Letter of introduction, call and promotion. A letter that’s followed up by a phone call advocating your business represents a high level of commitment by your referral source and has a great deal of influence on the prospect.

•             Meeting. By arranging and working out the details for a meeting between you and the prospect, your source moves beyond the role of promoter to that of facilitator, or even business agent. This demonstrates to your prospect a deep level of trust in you, and a willingness not only to make an introduction, but also to consider you and your services worth the time it takes to coordinate a meeting.

•             Face-to-face introduction and promotion. Combining an in-person introduction with promotion demonstrates that your source is engaged in selling your product or service, rather than just facilitating your sales effort. And this is a pretty great referral, beaten only by the…

•             Closed deal. Your referral source describes the features and benefits of your product or service, then closes the sale before you even contact the prospect. All you have to do is deliver the goods and collect the money. This is obviously the best kind of referral you can get (and, by its very nature, the rarest form of referral). To get to this level of referral, you’ll have to work with your sources and tell them what you’d like from them. This takes time and education.

The better your source knows you and is confident of your character and your business, the more often you’ll get the higher-level referrals. But keep in mind that you need to be making high-level referrals for your sources, too. Make sure you spend your due diligence looking for ways to open doors for your referral sources in the same way as you hope they will open doors for you. What goes around comes around.

Before you can beat your competitors, customers have to be able to tell you apart. Here are 3 steps to becoming the leader of the pack.

By Kim T. Gordon   |   May 28, 2008

Are you guilty of “me too” marketing? If so, you’re not alone. It seems no matter what’s being marketed, you’ll find the majority of competitors have virtually interchangeable messages and offers. Take away the names and logos and it’s hard to tell the companies apart. And that can spell big trouble for sales if your company is buried in the pack.

When comparing similar products and services, potential customers look for companies that offer a difference they value. They want to know why what you do or offer makes your company the best suited for their needs. You can leave “me too” marketing behind by creating a campaign that effectively differentiates your business from its competitors. This point of differentiation helps you stand above the competition and shout out to your prospects, “Here’s why this is for you!”

Take these three steps to pull away from the pack:

1. Scope out the competition.

Before you can effectively differentiate your business, you have to understand your competitors’ marketing messages as well as you do your own. Conduct a simple analysis by gathering the marketing materials from all your competitors–everything from their ads and copies of the main pages of their websites to sales brochures. Identify their key marketing messages and special offers.

Once you know how your competitors attempt to differentiate themselves, you can evaluate your similarities and differences. If there’s overlap between what you promise and what you see offered by your competitors, you may need to retool more than your marketing. Sometimes, an overhaul of the way a product is offered or the addition of new services is essential to make a formerly ho-hum company stand out.

2. Take the customer’s point of view.

Put yourself in your customer’s shoes after you’ve gathered the marketing materials from your competitors. If you were trying to make a choice between their products or services, which would you go for? Why? Often, the primary deciding factor is value. That’s the little bit extra that one purchase yields over another. Value is relatively subjective, and it can be tangible or intangible. For example, superior customer service can add intangible value by giving customers peace of mind that post-purchase problems will be handled better than if they were to buy from anyone else.

To find the right point of differentiation, learn what you can provide that your target audience will value the most. This may take research with members of your target audience, such as a telephone survey or roundtable discussions, to guide your message development.

3. Introduce your new message.

To be effective, your new core message–with a unique point of differentiation–must be communicated throughout your marketing campaign and sales support materials. But you don’t want to roll out the wrong message. So a preliminary, short-term test using one form of media, such as a group of magazines or websites, may be the best way to determine if you’re on the right track.

After you’re confident your target audience is responding effectively to your new message, expand it into all media. If it represents a radical departure for your business, kick off your new advertising and sales support messaging with the support of a PR campaign. And add any interviews or coverage you get to your website. Be sure to communicate your new messaging to current customers in a way that is reassuring and helps you upsell or resell this important group.

Depending on your budget and the media you use to communicate with your prospects and current customers or clients, allow six months or more for your new message to penetrate and for your company to pull away from the pack.

More entrepreneurs are embracing a simple metric that measures referrals - and helps boost profits.

By Justin Martin

May 27, 2008: 2:47 PM EDT  (Fortune Small Business)

63 is the number for Quickparts.

It appears in the annual report, gets discussed at meetings, and lest any employee forget, 63 periodically flashes on the flat screens that appear throughout the Atlanta headquarters of this fast-growing maker of custom parts for clients such as Intel (INTC, Fortune 500) and Whirlpool (WHC).Back in 2006, Quickparts’ number was 48, which is none too shabby. But here’s the difference between 48 and 63, according to co-founder Ronald Hollis: a 25% increase in customer referrals. That helped drive record profits in 2007 on $23 million of revenues, up from $17.5 million in 2006. This year Quickparts is aiming for 65.“We want to just keep driving the number up,” says Hollis, 41.What exactly is this magical metric?

It’s called a Net Promoter Score, and essentially it measures customer satisfaction and referrals. The score represents the proportion of customers who are promoters - those so delighted that they praise a product or service to all within earshot - minus the detractors.Posting the score to employees, and encouraging them to boost it, can help a business owner focus her staff on customer service. And inquiring into the sources of customer enthusiasm and anger can help the owner and her staff identify and bolster their strengths, while addressing their shortcomings.

Hollis, for example, learned from his NPS follow-up that customers seeking price quotes online wanted more customized quotes, which he now provides.NPS has been adopted and praised by large corporations such as Allianz Group, Pitney Bowes (PBI, Fortune 500), and Intuit (INTU). Dan Henson, the newly appointed CEO of GE (GE, Fortune 500) Capital Solutions, describes NPS as “one of the most powerful tools we’ve ever employed at GE.” Now, facing a weak economy and intensified competition from larger companies, many entrepreneurs are smartly tapping in.“NPS is really taking off with small businesses,” says John Jantsch, who writes a popular blog called Duct Tape Marketing. “I can’t tell you how many e-mails I’m getting from NPS adopters or those looking to get started.”Devotees - including the owner of a chain of Texas tanning salons, a Colorado franchiser of memory-improvement centers, and the head of a Delaware answering service and call center - laud NPS for its simplicity, contribution to revenue growth, and ability to identify exactly what is exciting customers or exasperating them.

To be sure, some detractors say that NPS is simple to a fault, and we will hear more from them in a moment. But first, let’s examine what NPS is and how it works.NPS is the brainchild of Fred Reichheld, a partner at the Boston consulting firm Bain & Co. and a pioneer in the study of customer loyalty. He spent a decade searching for a simple way to measure those customers so gaga about a product or service that they’ll praise it to anyone who will listen. According to Bain’s research, a company’s promoters are responsible for 80% or more of new customer referrals, making this group a key to revenue growth.Here’s how NPS is implemented.

First, ask your customers to rate you on a scale of 0 to 10 based on the question, How likely is it that you would recommend this company to a friend or colleague? Then sort the responses into three groups: promoters (9’s and 10’s), passives (7’s and 8’s), and detractors (0’s through 6’s). The percentage of promoters minus the percentage of detractors equals your score. A company with 75% promoters and 15% detractors, for example, would have an NPS of 60.What do you do with this number? Drive it up, of course. Relentlessly up. That is achieved by asking a couple of additional questions, beginning with: May I follow up with you at a later date?The permission clause is a key to NPS, according to Reichheld. The goal is to get constructive criticism from willing customers. You then contact those who agree to talk and ask one final question: Why did you give us this rating? Some of the most useful feedback comes from detractors.

The idea: Unhappy customers will give you an earful, perhaps revealing some serious shortcomings of your business. Cure what ails this tough crowd and convert detractors into promoters, and up climbs your NPS. But some companies also seek feedback from passives (the 7’s and 8’s, who can take you … or leave you) and promoters (the 9’s and 10’s, who love you almost as much as your mother does).According to Reichheld, the average U.S. company has an NPS of about 15. This varies by industry, with some, such as the makers of consumer packaged goods (score 24), faring pretty well, while others, like telecom/cable (- 4), are real dogs. No matter what the industry, each tends to have some companies with NPS scores well above 15. As a rule of thumb, score above 50 and you’re a star.

Not everyone, however, believes in the predictive power of Reichheld’s numbers. His detractors contend that the metric’s simplicity is, well, simplistic. One such naysayer, Claes Fornell, a marketing professor at the University of Michigan’s business school, did a comparison of NPS and the American Customer Satisfaction Index, a highly regarded survey that he developed using multiple variables. Fornell’s finding: The ACSI has a margin of error of +/- 3.3%, while NPS has a margin of error of +/- 10%, meaning that an improvement of five points in your NPS, to 55, could in reality be no improvement at all.“It’s pretty clear that the person who put this together has no statistical background,” he says dismissively.For his part, Reichheld contends that he simply touched a nerve when he created a demystified metric that put all the complex-modeling guys on notice, threatening their livelihoods. But guess what? Reichheld also quietly gives ground on that issue of statistical accuracy. In The Ultimate Question, his 2006 book on NPS, he claimed that a 12-point increase in the metric leads, on average, to a doubling of a company’s rate of revenue growth. Reichheld and his colleagues at Bain have backed off that claim, now saying only that increases in NPS can lead to increases in revenue.