Selling To Small Business

Selling To Small Business - Strategies to help you sell to small business entrepreneurs

Thursday, March 6, 2008

Selling to Small Business: Tips on Building Your Small Business Referral Network

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site

Last month, I wrote about the effectiveness of referral marketing in selling to small business relative to cold calling . I wanted to build on this post by providing some tips on building your small business referral network.

My first tip- read Malcolm Gladwell's "The Tipping Point" if you haven't already. If you have, you may want to read it again. The "tipping point" may be one of the most over-used business terms today but Gladwell asserted an interesting hypothesis on why any phenomenon spreads. I propose that in the business world "phenomenon spreading" (if I may short-hand Gladwell's thesis) and referral marketing are one and the same- you are the phenomenon and it spreads most effectively through referral marketing.

I am not going to do Gladwell justice in the space that I have (and errors in paraphrasing his thesis are my own) but the book focused on three different types of personalities which are fundamental in the spread of any idea (and remember again that for this blog the "idea" is you and the product and service you sell):

1. Connectors- in a nutshell, these are people who know a lot of people and, more importantly, will connect you with their network.

2. Mavens- Yiddish for one who collects knowledge- the trend spotters. The people who tells you about a new trend. Gladwell describes them as "the information brokers"

3. Salespeople- this is pretty self-explanatory, these are the people who persuade everyone else that the idea is worth embracing, exploring and, in the business context, buying. If you are reading this blog, YOU are the salesmen

It is not a huge leap of logic to state that a Salespeople needs to have good relationships with Mavens and Connectors in order to build a good referral network. Mavens tell Salespeople what the small business world is thinking and Connectors put you in touch with your ideal clients. Connectors, Mavens and Salespeople are not mutually exclusive; one can be all three although it is rare.

But did you notice something? Gladwell's trinity of important phenomenon spreaders concentrates on personality types and not functional job descriptions/skill sets. Gladwell doesn't state that lawyers and accountants are more likely to be Connectors. He simply writes that Connectors have certain DNA which inherently makes them Connectors. A few designations or degrees does NOT make one a Connector or Maven or a Salesperson.

Why, then, do some salespeople build or expand a referral networking focusing on job descriptions/skill sets rather than personality types? I am often amazed that salespeople attempt to build a small business referral network by first approaching lawyers, accountants and bankers. From what I am told by some salespeople, in conventional sales thinking, these "Big Three" professions are connectors to small business clients because they have a lot of clients.

However, this belief overlooks two fundamental issues. Firstly, what binds the Big Three together is confidentiality to their clients and their clients' affairs. As a lawyer, I cannot divulge my client's names much less whether their business is "ideal" for a particular good or service; in doing so, I am indirectly telling a salesperson that my client is doing well or poorly. Our post 9/11 and Sarbines Oxley world has made most professionals particularly conscious of the concepts of privacy and regulatory sanctions in breaking such duties. Thus, there are structural barriers to approaching the Big Three to build a small business referral network.

Second, and as I have mentioned above, a strategy to build a small business referral networking using job titles as a defining criteria is misguided. Connectors are connectors because of who they are and not want they do or where they went to school. Certainly, particular professionals come into contact more than others but just because someone knows a lot of people does not necessarily mean they will connect you to them. It is a logical fallacy to think lots of clients = Connector.

In a similar vein, I know of some salespeople who try to get their best clients to refer them to their friends without success. However, it does not stand to reason that being a good client or having a profitable business is going to mean they are Connectors. This is not a function of their purchase orders or profitability but of their personality. Perhaps your client is profitable but a dour personality. Meanwhile, your less profitable client may be a poor business person but a great Connector for you.

The point being that starting or expanding your small business network is not a function of what they teach us at school- job titles, education and pedigree do not matter as much as conventional thinking believes. Instead, focus on the personalities.

The question to be asked should move away from "does this type of person do something that brings them in contact with a lot of my ideal clients?" to "who do I know who knows a lot of people who may be ideal clients regardless of what they do?" As someone once said to me- the next person you meet may not be in business or even need a lawyer but they may have a cousin who does.

Next month, I will provide some tips on finding Connectors.



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