The best business relationships act as referrals that result in sales - even if they never spend a dime with you themselves.
We can all benefit from building our network, but many of us tend to focus too much on adding to our network and not enough on developing trusted relationships with existing connections. Our recent article on how to get value from your network generated a lot of responses from Inc. 5000 CEOs who built their businesses on the backs of successful relationship building.
A common theme arose from the comments: The best business relationships are not those who are "sold" to, but those who act as referral points or credibility references that result in sales, far beyond what these individuals could have "bought" on their own.
Bob Carzoli, CEO of Program Productions, one of the largest suppliers of labor services to the broadcast television and live event industries, and a five-time Inc. 500|5000 alumnus, put it this way:
One of the most important tips I can provide is to utilize your existing key contacts to develop additional ones. Don't be afraid to ask for introductions to their contacts. Many of them can be invaluable resources for advice, strategies and other networking opportunities.
I have a personal relationship with a senior manager at a major sports network. We've never done one inch of direct business with one another. Yet, he has referred me into his network of relationships, many of whom are now customers. I routinely follow-up with him, either with a quick email, a ten-minute face-to-face when I am in New York or a phone call to commiserate about our favorite baseball team. He is a friend, a trusted advisor and someone I respect enormously who has THE Rolodex in the industry.
Bob built sales by building a trusted, personal relationship with a recommender who has never paid him a single cent. Imagine if Bob was entering a meeting with a potential customer he had never met before. There are two ways this meeting could start:
Bob says, "Hi my name is Bob, CEO of Program Productions. I'd like to talk to you today about how we can work together." The customer thinks, "OK, great. I want to understand why should I work with him instead of the five other companies I already know."
"Hi, my name is Bob, I'm a friend of your friend Susan who recommended that we find a way to work together." The customer thinks, "Susan's one of my most trusted friends. If she recommended that we have this meeting, I'm sure Bob is the one I should be working with. She would never knowingly steer me in the wrong direction."
I'm sure most of you have experience in both scenarios. If your business is anything like ours, the likelihood of success in scenario 1 is close to zero. The customer probably has another company that they've worked with and trusts. Even if they are unhappy with their current provider, they often go by the rule, "The devil I know is better than the devil I don't."
Each of us can benefit from building trusted relationships rather than simply focusing on "networking." We challenge you to go through your business relationships and identify five individuals who you've under-invested in due to their lack of "sales potential," but could provide huge dividends through their referrals and recommendations.
Share your thoughts on using trusted relationships to build your businesses. Send us an email at email@example.com.
KARL STARK AND BILL STEWART are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark