Sometimes it is good to hear the same thing from someone else.  Such is the case here.  Bill Cates is known as The Referral Coach and does a great job helping his clients get more referrals.  One of the biggest challenges that I have when working with Referral Institute clients is getting them to narrow their focus and understanding how important it is.

In this Blog,  guest Blogger Bill Cates does a great job explaining why it is important to Narrow Your Focus….

Weekly Referral Tip – Bill Cates

This issue of The Referral Minute has been prompted by one of our readers. He asks the question:

“We have started to gain some divorced women and a couple of woman business owners as clients. If we wanted to target this niche (divorcees, widows, and wealthy women in general), would this be a good idea? The ironic thing is that women are not really a niche as they comprise 51% of the population. Your thoughts and comments would be much appreciated.”

Before I address this question directly, let me remind you of why you should be thinking about narrowing your focus with a niche – if you haven’t already.

1. You bring more value to your niche prospects and clients. Niche prospects see the value more quickly and want to work with you. Niche clients experience your value and you become more referable.
2. You can create a reputation more easily in a niche. Most niches/affinity groups have formal and informal ways of communicating with each other. The more referable you are (the value you bring) and the more they know you are targeting their niche, the easier it is to grow your reputation and get your phone ringing with great prospects.
3. You can identify all the players. In many cases, it’s easier to identify potential prospects in a niche. For instance, using today’s internet search tools, you can easily identify all the owners of a business in a specific industry. You can identify all the high-level executives in a specific company.

Now back to the question.

While women in general may not be a very good niche, you can build a great business staying with woman, but being more specific. For instance, I have met several – very successful – financial professionals who have had great success targeting divorcees and widows. This is not ALL women, but a subset that usually have a great need for a good financial professional.

Because there are no associations or clubs (that I know of) for these women (maybe some support groups, however), it’s a bit harder to identify and contact this type of prospect. If you’re lucky enough to have a client of this type who belongs to some sort of organization that is populated by divorcees and/or widows, then you might be able to speak at some meetings, create some seminars, and write for their publications.

Another way to get more focused with this niche is with women business owners. There are many things I like about targeting women business owners. The main reason is that woman, in general, and business owners, in general, usually play the referral game more willingly and more frequently. I know of one successful financial professional in New York who says he averages 2.5 referrals per male client and 27 referrals per female client. Now that’s some pretty good numbers.

Unlike widows and divorcees, it’s much easier to identify your business-women prospects. There are many associations of woman business owners (like NAWBO – National Association of Woman Business Owners – they have local and regional chapters). In addition, they have many types of gatherings, events, publications, causes, etc., that you can leverage to build your reputation.

Many Kinds of Niches

Of course, there are many great niches. I’ve seen what I’d call “micro-niches” that can be great and even a fun way to build a business. Here are a few standard and creative niches:

1. Physicians
2. Surgeons
3. Dentists
4. Small Business Owners within a narrow industry group
5. Owners of Corvettes, Porches, BMWs, etc. (they have clubs)
6. Horse owners (they have clubs and associations)
7. Dentists that ride Harley Davidson Motor Cycles (Yep! They exist! A narrow and fun niche.)
8. Employees (or executives) within a certain large company in your area
9. Retired individuals from a specific company or industry
10. Teachers
11. Salespeople

There are many more. In fact, if you’d like to tell me your niche and why it works for you, I’d love to hear from you. Info@ReferralCoach.com

You can read more from Bill at  ReferralResultsBlog

Below is an article written by Barbara Weaver Smith on Target Filters.  One of the most important things that a business must do it understand who their customers are, who they want as customers and how to identify them.  Barbara’s article is full of excellent information not only for your sales process but also for your referral process.

Ten Tweaks for Your Target Filter

In a turbulent economy, big companies are changing more rapidly than usual.  Some companies are retrenching to preserve cash and weather this storm:  slashing budgets, closing locations, consolidating departments, laying people off, reducing their scope of products and services. Other companies are taking advantage of a slow economy to seize opportunity:  modifying their business strategy, investing in new products or services, acquiring competitors, hiring from an excellent applicant pool, increasing their marketing and R&D budgets.

Regardless of how the whales are responding, they are likely not the same company they were the last time they made it through your target filter and on to your whale chart.  They may have totally new goals, new rules and reasons around their buying decisions, different expectations, different decision-makers, different time-frames to produce ROI.  Your job, as always, is to know everything you can learn about you targeted whales–to know far more than your competitors know.

Quick review:  Your Target Filter is the set of criteria by which you determine an ideal large customer for your company.  It includes a set of categories that are important to you and metrics for each category.  Categories include things like company size, location, industry, brand, corporate structure (e.g. public, private, government, or nonprofit), You can find an example and a sample Target Filter form on The Whale Hunters website.  Once your team has created a Target Filter, you use those criteria to select specific companies that meet your needs.

Here’s a Target Filter Tune-Up Checklist:

1. With your team, brainstorm the characteristics of your best big customers from the past three years.  Do you still want more customers like those?  If so, be sure those characteristics match up with your Target Filter.
2. Have your products or services changed since you last reviewed your Target Filter?  Do you have plans to enter a new market, a new industry vertical or a new geographic location, for example?  You may need a separate target filter for that industry or that product.
3. What’s new in your industry?  What market trends are you observing?  Test your Target Filter to be certain it is up to date.
4. Ask your Scout to update dossiers on your Whale Chart list.  Do those whales still meet your criteria?  If not, remove them and find new ones that now meet your criteria.
5. Have you implemented Whale Signs?  These are signals of a prospect’s potential readiness to buy.  You should subscribe to RSS feeds or set Google alerts to learn anything new that is going on with the whales on your Whale Chart.  Review your Whale Signs to be certain that you have identified the best ones for you.
6. What are you learning during your sales process?  Are you still well-aligned with what prospects want, or are you finding gaps that you didn’t find before?  The target filter needs to lead you to companies that want what you have to sell.
7. Are you consistently getting bigger sales and bigger customers?  If not, or if your sales process has stalled, your target filter is no longer working for you.
8. Have you involved your entire team in the target filter discussion?  The perspectives from operations, customer service, and the key account management team are very important.  Build consensus among sales and operations about the target filter criteria and metrics.
9. Is your target filter realistic?  If your vision of an “ideal client” never materializes in your sales process, you may have a pipe dream rather than a filter.

10.  Do you allow your target filter to remind you when to say no to an opportunity that comes your way, such as an unsolicited RFP or a customer referral?  Unless these unexpected opportunities are consistent with the Target Filter, you should be confident about saying no.

The Target Filter is a critically important tool for whale hunting companies.  By developing a solid filter, reviewing and tuning up regularly, and sticking to the prospects who meet its criteria, you will close more sales, bigger sales, and better sales, routinely.

Learn more about “charting your waters”–using the tools of scouting (Target Filter, Whale Chart, Whale Signs, Dossiers) in Whale Hunting: Land Big Sales and Transform Your Company, available from amazon.com.

Join Whale Hunters Group on Linked IN !

Dancing with the Stars is a very very popular program.  The dancers spend a great deal of time training their dance partners.  When one goes left the other goes right, there are dips and turns, stops and starts and all of it with the rhythm of the music in the background.

How does all of this relate to referrals, it is the same strategy.  If you are going to get valuable referrals from your referral partners it requires that you train them and train them correctly.

Back to the dancers, one is the trainer one is the student.  IF the trainer is suppose to be training the student to do the Cha Cha and they teach just a few wrong step, the dance will not work

The same is true with your Referral Partners, forget to teach them your message, don’t teach them how to recognize your target market and many of the wrong steps and both of you lose.

Practice Does NOT Make Perfect, Perfect Practice Makes Perfect.

IF you are not trained, if you do not know all that you need to know about your target market, your mission statement, your benefits, have your database and many other things you must know, how are you going to train your referral partner?  How are they going to train you?

Know your target market

This is a Question that I got on Linkedin, I thought it was very appropriate for this blog.

 In my coaching practice, clients (especially new entrepreneurs) often tell me they don’t want to nail down a specific target market because “everyone is a potential client” and/or they feel like they are missing out on business opportunities in other markets.

Have you nailed down one target market? If so, how did you go about making your choice? Did your target market choose you? How long after starting your business did it take for you to choose your target market?    Do you target more than one market? How do you balance your marketing?  Do you even believe that choosing a target market is essential to your marketing success? If not, please tell us why.

This is one of the toughest questions that I tackle with my students in the Referral Dynamics Program.  Generally business people think with a scarcity mindset, always afraid that they are going to miss out on some business regardless of the quality of the business.

For instance if I am an Insurance agent who writes insurance on anyone who has a business, then I am always running around trying to find anyone!  From the small one person business who has very little money to the multi-million dollar business.  It’s like shooting in the air and hoping that a bird will fly over.

On the other hand if I am the insurance agent who is an expert in working with Attorney Firms who have one or more partners in the Central Indiana area, I know exactly where to spend my time and my money marketing.  IF a CPA Firm calls my office and ask me to write a policy for them would I say NO?  Heck no, I would do business with them.

Declaring a target market does not mean that you cannot or may not do business with anyone else, it just means that you will have a target to aim your message to and spend your money on.  When the time comes to recruit Referral Partners they will be easy to find and easy to train.

It allows you to develop yourself as an expert so that your target market seeks you out instead of you searching for them.  It allows your customers to create a buzz about you!  Take a moment and ask yourself the following questions……..

1.  Who do I like to work with?

2.  What makes me the most money?

3.  What market do you have the greatest experiece in?

4.  Is there a market less served?

Building yourself a strong target market will allow you to work less and make more money!

Referrals, leads, word of mouth, buzz marketing, viral marketing, networking, seven second introductions, elevator speeches, referral groups, business networking and social networking.  It all blends, causing confusion, misunderstanding and a muddied mess in the business world. 

You see it everyday, one networking event after another, business cards being passed, people shaking hands, and those ever so famous seven-second introductions being pitched.  It’s the same people at every event, giving out the same cards, same pitch hoping for a different outcome. 

We hear about networking as a way to grow our businesses, and everyone calls themselves networking experts. If you put the words “business networking” into Google, you will get 186,000,000 hits  So called experts teach classes and workshops on how to do better seven second pitches, how to hand out their cards, what to do after the event, how to give more, and do more. 

Recently I ask a young man how he got most of his business, “90% by Referral” he stated.  When I ask what kind of system he had to generate and track that level of referrals his answer was; “I have a great yellow page ad that generates a lot of referrals for us.”  While having a Yellow Page ad will create a lot of visibility for you it is not generating referrals.  

What’s missing here?  What is the plan?  Where is the system?  People who are networking have no idea where their business is coming from, who their referral sources are, what target market they are connecting with, or even if they are networking in the right place.  When asked what their ROI is on all of their networking activities they will say things like, “Great” or “I have made a lot of business contacts and friends while networking”.  Rarely if ever do they really know the ROI.   

If business professionals are going to build their business by referral, there has to be a plan that goes beyond, what most networking gurus are teaching. Word of mouth does not mean business by referral, and Networking does not mean you will get referrals. 

If you really want to build your business by referral, you have to develop a plan, a system.  Much the same way as you developed a Marketing Plan.   

Who are your customers, where do they live, what do they do, are they other businesses or are they consumers? Companies spend thousands of dollars every year identifying their target market, their customers.  How much time have you spent, is your customer anybody who needs or wants your product or services:?  What do you offer to your customers, and why do they come to you?  Have you asked them? Who are your Referral Sources and what system do you have for motivating and training them? 

Networking is very valuable, but learning how to develop a system is more important.  Once the system is in place, and you know whom you want to connect with and whom your referral sources are you will then be able to choose the right places to network.   

If you’re going to build a house you need to take some time and do your preparation, lay out the design, build the foundation, then build the building.  Every step must be followed in the proper order.  The same holds true when you are building your business by referral.  Where is your plan, how is the foundation, or did you forget all of that and just start networking, hoping for best.  

Here are 5 Tips for building a foundation before you start networking. 

1.  Narrow your focus, having a clear Target Market is one of the most important aspects to building a business by referral.  Anybody, everybody, and small business does not constitute a target market.  

2.  Who are your potential referral sources?    If your target market is “Any small business that needs health insurance”, you will find that all you are able to generate will be random unpredictable leads from the people that you network with. 

On the other hand, if your target market is; “Family owned businesses, with 3-50 employees, in the manufacturing industry.” You will have a better chance of building strategic referral partnerships with others working in the same target market.  

3.  Know where you want to spend your time and efforts.  Building a business by referral takes time.  You only have time and money to spend, you can make more money but you cannot make more time, spend it wisely.  When you are networking look for those people who would make great referral partners and begin the relationship process with them.  You do not need 2500 people in your database if you have 10-trained referral partners helping you connect with their clients and contacts. 

4.  Clean up your database.  Are there people in there you don’t even know?  When was the last time you contacted them?  Are clients, contacts, prospects, clearly identified?  Do you have other ways of sorting, like support, information, and referrals?   

5. Create a system for tracking your networking activities.  How many calls did you make? How many notes did you send?  How many hours did you spend out networking?  What events did you participate in?  Who did you give referrals or leads to?  What gets measured gets done, tracking is one of the most important things you can do, but often the most neglected. 

Don’t get caught up in the Networking madness until you have a plan.  Do some work first, build your foundation, identify who you want to network with and where you want to network, then get started. 

Hazel M Walker

Referral Strategist