After 14 years of consulting and relocating my business to Western Pennsylvania, many of you have asked, “What keeps you going, Andy?” In advance of my introducing an “Advanced Consulting Mastermind Group” with Michael Couch and the Pittsburgh Consulting Community on January 31st, here’s a preview of my keys to keeping your consulting business healthy and wealthy.

1. Sustain and nurture your professional passion. Constantly learn about your clients’ challenges and help them succeed on their terms.
a.    Live to learn, but advise with detached passion. Stay devoted to your clients’ success and your market’s evolving needs and challenges. Develop a contagious curiosity for what could be and the unwillingness to accept the status quo. Your clients need this the most from you.
b.    Focus one third of your time on each of the following:
i.    Selling new clients and projects
ii.    Delivering the best work you can
iii.    Developing your own business

2. Focus on Your Best and Highest Use
a.    Refine what you’re good at, like doing and what the market has paid you most for doing.
b.    Repackage, repurpose and reinvent how you provide your Best and Highest Use. Constantly check what’s selling, how content is being is being adapted and what new problems and opportunities are confronting your buyers.

3. Embrace the ups and downs.  No client, methodology, problem or market will sustain you forever
a.    Change is constant in the consulting business. What was once scarce becomes abundant. Clients change and problems ebb and flow. Recognize the differences between business fads and timeless principles.
b.    Accept what you can improve as an outside change agent and what is the client’s responsibility. Your client’s engagement is non-negotiable if you are going to help them.

4. Learn from the best, but do it your way
a.    Surround yourself with the best practitioners as teachers and as peers. Consulting is a business where clients repeatedly paying and referring you is your best measure of success. Beware of those who spend more time teaching than consulting. Longevity in this unforgiving business is the best measure of success.
b.    Do it your way. A most wonderful aspect of consulting is your ability to customize your practice to best support your gifts and preferences. You choose your clients, the problems, how you best work and what goals you set.

5. Above all, do no harm
a.    Your clients are in your hands. Consulting is unregulated, unlicensed and requires no education or certification. You are your only judge of what’s ethical. Always take the high road.
b.    Your business is sacred. Your business is as important as your clients’ businesses and needs equal attention. Invest in it and nurture it so it will be stay healthy and remain state-of-the-art.

Consulting through the years makes for a wonderful life and profession helping clients reach their goals and yours along the way. Cherish, protect and nurture your business, and it will reward you in every way. If learning more about consulting and my insight is of interest to you, check out the Pittsburgh Consulting Community at http://www.mcassociatesinc.com/community/index.php after December 21st and join Founder Michael Couch and me on January 31st when we will introduce two exciting consulting roundtable opportunities for you!

It is standard practice to qualify a prospect on the basis of time, need, authority and money, but why not by corporate culture as well? We all find it easier to work with some companies just as we prefer working with some employees more than others. In fact, as a result of outsourcing, with more and more work going to suppliers instead of employees, perhaps the supplier-customer relationship should (and will) start to mimic the employee-employer relationship.

If this is so, then as suppliers, we should start to assess our prospect’s corporate culture just as we did when deciding to accept a company’s job offer. While I’m not recommending pre-relationship psychological testing, we may need to run a relationship check just as we would a credit check. Since people still buy from people (as opposed to companies) some level of compatibility is essential. After all, customer-supplier relationships fail most often because expectations were not set, agreed upon and then met. Some relationships may be already doomed from the start!

So let’s take a few moments and decide whether we are picking good long-term partners or “one-time sales stands.”

• Does the decision-maker communicate like you do?
• Does he/she share some basic values with you?
• Does his/her company make decisions like yours does?
• How are disputes resolved, if they are resolved?
• Is it a conservative or progressive environment in terms of risk-taking, communications, problem solving, partnering?

While sales goals have to be hit, they are rarely accomplished through the first order. Therefore, developing an ideal customer profile before closing that first deal will help ensure that more will follow. Taking a few minutes when moving qualified prospects through the developed or proposal funnel stage before closing them will only enhance the chances of successful long-term partnerships. This profile can easily be added as part of your qualifying customer or pre-proposal questionnaire. Feel free to contact me if you would like some further thoughts on how to do this.

“When will the Marcellus boom impact my firm?”  Since timing is everything, you need to know when’s the best time for you to invest and gain a12-month return. If you are hearing all about opportunities but seeing few leads, buyers or orders from shale-related business, you’re not alone. Throughout my recent trips to West Virginia and throughout Pennsylvania, I’ve been watching the boom happen in fits and starts.

Last time, I wrote you about which industry sectors to watch first. Now, here are my thoughts on how to time your Marcellus initiative. When will the “Marcellus money” hit your business? For my insights read on:

When is the right time to invest in your Marcellus-related business? The answer will depend on how your region is advancing regarding the following factors:

1. Water regulations need to be “flushed out”

Right now, testing protocols for determining the impact of Marcellus drilling on ground water are being set and revised. This is for everyone’s benefit. And of course, there is a healthy debate. What is the definition of clean water and within what radius?  And if a well, soil or drilled sample isn’t clean, then why and who’s to blame?

Which jurisdictions will prevail in setting the rules? State, local and federal agencies are jockeying for control, but lag behind industry groups like the Marcellus Coalition who are better funded and more sophisticated testers. Once protocols are set, who is liable and who will enforce the rules should follow quickly.

2.    Midstream piping capacity is the current bottleneck

The gas wells that are already built are pumping all the gas they can, and that local facilities can store and, existing pipelines can transport. New pipeline capacity to move the gas downstream is in the works. Until new pipelines are approved, the midstream builders are waiting for orders and the fees that will help accelerate the Marcellus boom. These payments will not just be for the construction of the pipelines, but will also trigger the gas royalties that landowners will receive. Now, most landowner spending is based more on their lump sum windfalls from selling gas rights. When drilling starts in full stream, then royalty payments will start. This will clearly accelerate across-the-board spending.

Downstream businesses, namely those who benefit from the gas businesses are lining up behind several large opportunities. For example, a billion-dollar plastics plant producing pellets and film from gas is being contemplated in West Virginia. The business impact is obvious. And the four sectors previously described in my Lesson 2 — business services, transportation, infrastructure and construction are obvious beneficiaries and will be the first to show the boom is accelerating.

3.    The price of gas must rise and stay over $4 per billion BTU’s.

As dependent as our nation and this region is on Middle Eastern oil, this oil and other gas alternatives can still be cheaper for producing heat and power for many commercial and residential applications. Although I’m not qualified to explain or refute this, the energy community thinks that the $4 benchmark is the tipping point for gas to become the prime choice. So, it’s a matter of time before higher oil prices will increase demand for natural gas, thereby increasing its price.

4.    The Utica Shale opportunity could make Marcellus seem like the tip of the iceberg.

The Utica tract is the next, big opportunity adjacent to and underneath the Marcellus. It is deeper, richer and larger than the Marcellus. Apparently, it contains gas, oil and other minerals. Its simple existence reduces the risk of Marcellus alone to meet business expectations. As there’s more evidence, investors, drillers and their indirect suppliers and beneficiaries will certainly put their money where their confidence is.

5.    Consolidation

Every month, other under financed, smaller drillers are being bought out by the major energy companies, as much to eliminate the risk that their corner-cutting practices pose to safe operations as for their value. Larger producers want clear regulations to comply with. In Pennsylvania, their group, the Marcellus Coalition, is also consolidating as the top-tier.

So when is the timing best for your firm to invest in the shale opportunity? My best advice is to watch your region in terms of the five factors I described above. The boom is coming. Stay tuned as I learn and share more.

“Where is my opportunity in the Marcellus Shale?” I’m hearing that question asked more and more but answered less and less. Where and how do you grow your business if you have neither property to lease, nor services or products to sell to gas drillers? How do you shortcut the 5-10 year’s lead-time it’s supposed to take for Marcellus region’s economy to benefit every business?  Are you willing to take a methodical approach to growing your business through Marcellus?

For property holders, and the fortunate few who can sell gas drillers, products, services, or transportation, the riches of Marcellus are already flowing. If you can’t figure out where your business fits in, the answer may be right under your nose. Curious? Please read on.

In this earliest of phases, Marcellus is only about building gas wells to extract gas. Fortunately, doing so takes people, infrastructure, services, and transportation. Let’s explore each one:

1. People. While residents may resent the big companies importing experienced work crews from Texas and Oklahoma who will work 7 days a week for $40/hour, these workers need services beyond what their employers provide. And thousands of support jobs are going unfilled. Transient workers are experienced at working hard and spoiling themselves. Also, they need support at their worksite, where they bunk and for their families are back home. And local residents will accept training and support jobs and will be joined by immigrants moving in from depressed regions in search of better opportunities. What can your business offer people to improve their lives in Marcellus?
2. Infrastructure.  From roads to subdivisions to shopping to worship to recreation, Marcellus means opportunity. As roads are improved, businesses are coming in to support the support system. What products and services has your business offered to the construction, architectural, engineering and subcontracting industries that will be in demand in the Marcellus region?  As natural resources are consumed, stretched and probably exploited, what products and services can your company offer to leverage, monitor, or protect the infrastructure and the natural resources with which it must coexist?
3. Business services. While lawyers, surveyors and realtors are already making it big in Marcellus, what about your business? If you can sell anything to any business serving the gas drillers’ vendors, your business’ doors are opening. Business to business services are particularly lucrative opportunities since there were few such business services in these areas and outsourcing is the rule as businesses are racing to please their customers ASAP.
4. Transportation. Shippers, logistics and supply chain industries are first coming to Marcellus to transport water and well supplies, but the drillers’ vendors and their suppliers will need all kinds of transport. With the emphasis on environmental safety and monitoring, combined with the fact that most of the Marcellus tract offers wonderful recreational opportunities, transportation services of all kinds will be needed to move supplies, people and information throughout the region. What can your business transport or provide to transporters? 

So how can your business participate in the Marcellus boom? By thinking about what part of the first wave of people, infrastructure, services and transportation you can catch and ride. In the coming months, I will write about the best timing for when your firm should pounce and then, how to understand and predict buyer behavior. Stay tuned!

 And if you just can’t wait, join me next Wednesday the 26^th when I will present my workshop on Growing Your Marcellus Business at California University for the Marcellus Chamber. Learn more here. (To register online click here.)

While financial gamers, schemes and scams have enabled many companies to avoid either profitable growth or a sale for years…

… ultimately one of these options is inevitable.

◦A company that is profitably growing is controlled by passionately committed owners and investors.
Their firm is financially and operationally self-sufficient. There is no need to merge or look for investors.  Its leaders can reduce its credit line and pay down outstanding loans. The company has customers who are happy to pay for its valuable products or services. Over time, the company will build up retained earnings and become a creator of wealth. As long as its owners are confident and passionate they should never think of giving up their independence in running it or cashing out. Life is good!

◦A company that is not growing profitably has flat or declining sales.
Its costs and expenses are fixed or rising and it starts to lose money. The company begins to consume more cash than it generates. Owner, banks or investors have to subsidize the company through credit or by tapping any retained earnings. These leaders lose passion for their business as it is no longer self-sufficient. Clearly, its customers cannot or will not pay enough for the firm to delivery its products and services.  First, the company runs out of cash, then out of credit and finally must be sold.

There are only two buyers for a company that is not profitably growing:

1.New owners and investors with ideas, cash and passion to return the company to profitable growth.
2.Bankruptcy trustees who sell the company for whatever they can to pay creditors pennies on the dollar.

So companies either profitably grow or they are sold.

What’s it going to be for your company? Do you agree or disagree?

If you own a business in Western PA/Eastern Ohio, the more you learn about the trillion-dollar business opportunity called Marcellus Shale, the more you may wonder how you can best profit from it.  But unless you’re selling directly to gas drillers or energy giants, you are probably wondering what to offer, who to approach and how to go to market. As I’m helping my clients and workshop attendees do this, here’s the first in a series of lessons I’ve learned:

First Lessons Learned on Making Money on Marcellus: 

1. Make Marcellus your rising tide; not your tsunami: Find a portion of the overwhelming demand you can profitably supply and make sure you can deliver on any business you close. As tempting as it is, don’t let any one customer become more than 20% of your business. My friend Shaun Seydor’s seminal report ” The Economic Impact of the Value Chain of a Marcellus Shale Well” ^*is a must-read and linked here with his permission and my gratitude. Read it and think about where your can catch the wave.
2. Follow the money and bring your “A” game: My early advice to clients is to avoid the big players (Range Resources, EQT, Chesapeake, Exxon/Mobil etc.) and sell to the companies who sell to these big boys. Stay one step removed from the “tier one” companies, and you can keep more control over how you do business. But it’s still a fast and furious world and strong contracts are imperative.  Put your best foot forward and never forget: with all this opportunity you are competing in the big leagues. Fortunes will be made and lost. This is a great time to Recharge Your Best and Highest Use^® 
3. Stake out your value and place in the food chain.    Learning where and to whom you offer the greatest sustainable value is critical. There are many ways to slice the Marcellus marketplace. Identify your ideal target buyer and know their buying process. Build a selling process that matches their buying process.  Here’s an article to help you think about this http://profitablegrowth.com/shout-out-or-shout-at-your-sales-force-is-it-generating-sales-growth-in-the-new-economy/ Also, decide where your business fits into these two graphs from the Marcellus report: Figure 1 – Types of Economic Impacts (p 4.) and Figure 2 – Phases and Key Steps in Developing a Marcellus Shale Well Site (p.10).
4. Timing is everything. Many business owners I’ve met operating in the Marcellus tract complain that the “out of towners” won’t hire local companies or that “the money is yet to show up.” Make sure what you sell is ready to be purchased. Watching what your customer’s customers are buying is one way not to make your move too soon or too late. Here’s a piece I wrote in a different context but has some good tips on figuring out your best timing http://profitablegrowth.com/is-your-demand-down-or-distribution-dying/
5. Chase transactions or relationships Most companies working in the Marcellus space can be split into transactional firms who do business one sale at a time (e.g. gas stations) and those relationship companies growing over the long term (e.g. cleaning companies.)  Match how your business profits best to the right kind of kind of customers that you should do business with. To help you decide which you should focus on, here’s an article for you http://www.andybirol.com/DisplayContent.aspx?MenuID=626  

 Unlike the great Oklahoma Land Rush where everyone got a fair start at the same huge opportunity, Marcellus is much more complicated and tricky despite the trillion-dollar economic windfall it is. Stay tuned. This is the first in a series of pieces I will write as I learn lessons with my clients and workshop attendees on making money on Marcellus. 

 Do you have questions on how your business or audience can make money on Marcellus? Call or email me and let’s talk about it.

^*By Heffley, Seydor, et al & the Katz Graduate School of Business at the University of Pittsburgh.

As a growth consultant for small businesses, I’ve enjoyed many opportunities to see how various small businesses function, especially those that have operated for a number of years. In an age of understaffed companies and conflicting and competing demands, most of these companies are so busy helping their customers that they don’t take the time to help themselves.

They tend to lose sight of what I call the extraordinary that lies at the heart of the ordinary in their operations–the characteristics that make them special and unique. Two such companies in Butler County are W.K. Thomas and Interstate Pipe and Supply.

The presidents of both companies lacked a formal marketing program and realized that traditional, relationship selling would not get them to where they wanted to be —in the scarce space of marketing and sales in their respective businesses. Now, they are both changing their companies to achieve that.

Thus far in our work together, they’ve focused on expanding their values and defining and honing what I call their individual Best and Highest Use®. Best is what they love to do. Highest is what they do really well. And Use relates to what their customers value and are willing to pay for.

Under the leadership of Brent Thomas, W. K. Thomas & Associates provides pre-engineered steel building and construction services to the commercial, industrial, community, and religious markets throughout Western Pennsylvania.  Brent’s father, Bill, now Vice President, established W.K. Thomas in 1974 as a custom-home builder and general contractor. Since then, the company has remained a privately owned, family company.

Other firms rely heavily on the service offerings of project management and estimating as commodities to drive business forward. They end up competing in a market where bottom dollar pricing and the resulting low-quality construction become the norm.  But Brent Thomas is linking the brand of W.K. Thomas to pre-engineered steel buildings as the company’s big differentiator and is driving revenues up. His company is growing a reputation in Butler County as the go-to company for these types of buildings.

“I’ve stepped outside of being jack of all trades,” says Thomas, “I’m focusing on pre-engineered steel buildings which is our Best and Highest Use, have taken on more responsibility for sales, and I’m reorganizing our team to help energize this new direction.”

Under the leadership of Brian McCarrier, Interstate Pipe and Supply specializes in water, steel, sewer, plastic, gas and culvert pipe and fittings, valves, tanks, and pumps. Brian’s father, William, founded the company in 1968 when he purchased a small, pipe-supply house in 1968 in Clintonville, Pennsylvania and gave the company its present name. He opened a second branch early in the seventies, and started the Butler, Pennsylvania branch early in the eighties. Late in the eighties, he opened a branch in Washington, Pennsylvania.

“I’m relying on our Best and Highest Use to move our business forward,” says McCarrier.
“We’re leveraging the culture of Interstate Pipe & Supply and our moral responsibility and
stewardship to better serve our employees, customers, and the community of Butler County.”

The result: As McCarrier’s competitors rely on cut-throat pricing to sell their commodity products, customers of Interstate Pipe & Supply now see the company’s differentiated
brand as worth more. 
 
When I began working with Brent Thomas and Brian McCarrier they both had strong, well-established businesses with great potential for growth and wanted to take their companies to the next level.  What made sense for them was my ability to find the extraordinary within the ordinary of their companies. My approach has been to find the characteristics that make them special and different from their competitors, and to cultivate these aspects into exciting opportunities to grow their businesses.

Working with them and their customers has led me to understand their product lines, how they add value, and how they develop special relationships with their customers, whose feedback is critical to our endeavor.

The upshot is that now W.K. Thomas and Interstate Pipe and Supply, are becoming more aggressive in proclaiming their value and more consistently educating their customers about what they can do to help them. Thus far, we’ve focused on expanding their values and defining and honing their individual Best and Highest Use®.

Throughout my years of consulting with businesses like W.K. Thomas and Interstate Pipe and Supply, I’ve deployed this approach to help more than 430 businesses owners identify the specific markets that’s right for them and their companies. This has had a $450-million impact on the economy.

Best and Highest Use also immunizes companies against the “Be All Things to All People” disease. This disease is as common as a cold, but it’s as deadly as the plague for small businesses.

When business owners fail to target specific markets in this way, a number of consequences occur, all of which are bad. Their companies aren’t special. They’re mediocre, forgettable, or worse. People can’t refer customers to them. Their companies attract unqualified prospects and waste resources on prospects who could care less about their offers. This, in turn, diminishes their efforts with regard to prospects who do.

What’s more, best use helps business owners to resolve the greatest pain or create the greatest opportunity for a narrow slice of a market. This creates a crucial intersection for them between their companies, their Best and Highest Use, and the needs of their customers.

Over time, I’ve had the privilege of learning, using, and teaching a variety of growth tools for organizations. We’ve used a variety of names for these processes, including strategic planning, management by objectives, sales management, and incentive compensation. Too often, these systems steamroller over the interests of the users. The fact is that old-fashioned, autocratic tools just don’t work anymore.

More than a few times, I’ve had people challenge my concept of Best and Highest Use, saying that it’s just another term for distinctive competence, one of the buzz words that periodically make the rounds of corporations and MBA programs. In one way, they’re right. Best and Highest Use is essentially distinctive competence for business owners. The difference – and it’s a large one –is that although distinctive competence speaks clinically of skill sets and marketplace advantages, Best and Highest Use involves an owner’s emotions, goals, and personality.

One concept I hear kicked around is the term, best practices. But this assumes that all firms start out and grow and stay completely equal. To center your business on best practices is to deny, ignore, and disrespect your Best and Highest Use^®. How can you ever tell if you are better or worse than you should be if you only judge yourself on the basis of the lowest, common denominator of other companies?

Working together, Brent, Brian, and I continue to focus on their individual Best and Highest Use to translate new customer demand into substantial, dramatic growth and confidence in their abilities.

In the short and medium term, we’re tailoring initiatives designed to achieve profitable sales growth. At the same time, both of these company leaders are experiencing a renewed excitement and passion for their businesses. At a time of economic hardships when competitors are pulling back or taking cover, their passion and excitement is giving them confidence to make it work.

As we reinforce the abilities of W.K. Thomas and Interstate Pipe and Supply to deliver higher value at lower cost, we’re decommoditizing both companies.

This is not to say it’s easy. For one thing, Brent and Brian have had to break old habits. That’s difficult. But my goal is to push them out of their comfort zones in a way that causes willingness to raise new behaviors while preventing them from making ultra-risky, bet-the-company decisions like introducing price changes to gain market share, hiring non-producing sales people, or getting rid of a sales force.

As I work with companies like theirs that have enjoyed years of success, I’ve enabled them to make course corrections a step at a time. The end result has been that they’ve sharpened their views on the kinds of businesses they want, the kind of services they deliver, and they’ve stopped trying to be all things to all people. These are hard choices that emerge from recognizing that everything they may be involved in is not a business.

Andy Birol is the Founder and President of Birol Growth Consulting, www.andybirol.com. You can reach him at 412-973-2080 or at abirol@andybirol.com.

As business owners, we know that no one can intimidate us or our firms, right? But if the prime minister of England can be wiretapped while learning of his child’s cystic fibrosis, and his entire government can be bullied by a single media company, what  recourse do we have we when we are intimidated?

How do we “Davids” face the “Goliaths” in our businesses? If you face bullies in the form of customers, investors, vendors, or partners, what can you do? When negotiations with bullies become pointless, here are four logical actions you can take to get out from under their thumbs:

• Create alternatives: No resource (people, money, expertise, or energy) is irreplaceable when you discard your assumptions.
  
• Pay the cost of just walking away: Realize that you can recreate what you have lost and more the sooner you start over.
  
• Expose your bullies: Go public with their malpractice or take it to legal and any other authorities they respect.
  
• Don’t let yourself get screwed in the same way again: Understand how and why you got taken and don’t ever make the same mistake again.

As the News Corp. scandal threatens to spread to U.S. shores and to violate our privacy, it’s clear that power, technology and desperation will further encourage bullies everywhere. If you’ve been wronged, stand up with your integrity, confidence and righteous indignation and then take the right steps to never again put yourself in the same position.

Mention “banker” to business owners or “business owner” to bankers and you are sure to spark a reaction. Having worked with hundreds of each, I marvel at the state of such a critical and ancient relationship in this day and age. While bankers and owners need and value each other, few supplier/customers relationships are so complicated and fraught with angst. Owners vex over the strings, bureaucracy, and inattention that accompany the money they borrow from bankers. To many owners, most loan officers are seen as temporary caretakers who have neither the time nor incentive to understand their customer’s business.

Conversely, every bank president I have met, in spite of his or her regulatory and lending constraints, insists they are the bank for business owners and lead their lenders to do so. They lament over how “over-banked” and rate-driven their market is. And they are right that smaller businesses rarely understand banking, financial management, risk, or working capital.

Because of these disconnects, bankers and smaller business owners rarely
profit from the synergy of their respective positions. The shame is, together
they could become a powerful partnership. In our economy, an emerging business’
credit, deposit, and processing needs make them a bank’s best prospective
customers. And bankers can offer not just fair rates but provide needed counsel
and guidance to smaller businesses that are typically unsophisticated borrowers
and often less rate-sensitive. So why can’t business owners find lenders who
will provide more value? And why can’t lenders convince owners to look beyond
the interest rate and see how much more a bank can provide? With interest rates
still relatively low, rather than shopping for the best rate, smaller business
owners need to find the banker that will give them the time and expertise they
cannot afford to create internally. For their part, bankers need to be capable
and eager to provide far more expertise and understanding of the business
owners’ needs. So as an owner, here are my five key ways for you to bank on your
banker:

1. Accept it is the bank’s money and not yours. A banker’s
   first obligation is to protect and control their depositor’s money that they are
   lending you. Bankers often finance up to 50% of their client’s balance sheets
   but only 10% of the business’ costs. They can feel that they are more concerned
   with protecting a company’s assets than the owners are. So be a good customer
   and when you take their money, understand that much of the “paperwork” and
   record keeping is a critical discipline to internalize. Your loan officer is
   always evaluated first on how he protects his or her bank’s money. And, unlike
   other investors, they won’t try to run your business as long as you do.
2. You are not a bank’s customer you are their supplier. Think
   of yourself as the supplier (of a good credit risk) to your sales rep (the
   lender) who must sell it to his customer (the credit committee) and your
   expectations will be realistic. Furthermore, it is important to understand that
   the decisions of the credit policy committee just as often are based on the
   bank’s overall financial needs as they are on your credit worthiness so don’t
   take it personally when their decision appears to disregard the obvious. No
   aspiring lenders can or will ever jeopardize their career by going against
   credit policies of their employer.
3. Bank on your loan officer, not his or her bank. As all banks quickly copy each other’s products and services, your contact makes all the difference. When deciding on a banker, pick the individual who has substantial tenure in their position and hopefully some business acumen outside of banking. The best lender for your smaller business is rarely the hard charging, most promotable, fast tracker, but rather the tenured expert who loves working with businesses more than his own political bureaucracy and may be perceived as a rebel within their own institution. Unfortunately, the average banker covers over 250 customers so it is harder to keep his eye on your business than to get the lowest interest rate. If your business is so dependent on debt service that even a ¼% can make or break your company, don’t blame this on your banker but rather examine if your Best and Highest Use® is sufficiently valued by your target market.
4. Don’t settle for “service.” Demand expertise and advice. If
   your banker is only a middleman and expediter, he or she may call this “good
   service” but it doesn’t add value to your business. Worse yet, if you call your
   banker after months of no talking, and frantically ask him to increase your line
   of credit so you can make payroll, shame on you both! Your banker should be
   proactively asking open-ended questions, such as how will you make payroll if
   you lose an account or production capacity and follows that up with more
   questions which lead to you and she agreeing on an overall financial strategy
   and contingencies, you have the right person.
5. Buy on price when the value is not out there. If you can’t
   get expertise you need in a lender, then shop for the lowest rate. Think of your
   banking relationship as an outsource-before-you-in-source decision. As you grow
   in financial sophistication and embrace the discipline your lender has taught
   you, hire a treasurer or CFO with the expertise that will also bring your rates
   down.

Over these last few years, credit has been scarce but virtually free in this
low-interest rate environment. While many banks say they are vying for your
business, demand a fair rate and the right banker. Or learn to live with even
less debt! If you can bank on your banker and you and your business will be
better off.  Articles by Birol Growth Consulting are © copyrighted and all rights are
reserved. However, articles may be reprinted with prior written consent if
attribution is included as follows:

© Copyrighted by Andrew J. Birol,
President of Birol Growth Consulting, who helps owners grow their businesses by
growing their Best and Highest Use ®. Andy can be reached at  (412)
973-2080, by email at abirol@andybirol.com,
or on the web at www.andybirol.com.

If you run a company, lead a sales and marketing team, or sell for a living, you know that referrals are your best source of new business.

• Nothing beats an introduction from a peer who knows what you offer to a prospect who needs your value now.
• No matter how strong your sales skills, marketing programs, or products and services, a referral to a qualified prospect most helps you close the sale.
• If most buyers turn to colleagues they trust for recommendations when making a purchase, who do yours turn to?

If referrals are your business’ best way to grow, why don’t we develop our referring skills and seek out more and better referrals? Instead, too many businesses lament the lousy referrals they get from well-meaning business friends. Whose fault is that? Rather than launch a costly and risky lead generation effort, why not improve your advanced referral marketing skills?

The Basics of Getting Referred
To review, there are some critical ingredients to getting a referral. You must:

1. Provide specific value to a defined target prospect. If you do not have a Best and Highest Use® please define yours now or settle for being referred as a commodity.
2. Be excellent. Always grow your track record of quality work and results.
3. Stay in front of those who refer you. Communicate with them regularly and provide new and valuable information.
4. Be trusted. Prove to your referral sources you will treat them and their referrals with respect.

While these fundamentals never go out of style, enough people practice these well enough now, that distinguishing your “refer-ability” takes even more effort.

Five Steps to Advanced Referral Marketing

To grow better and get more referrals, here are five steps you can take now:

1. Determine Your Need for Referrals
2. Understand Your Prospects’ Buying Process and Then Align Your Selling Process and Referrer’s Role
3. Define the Ideal Relationship Your Referral Source Should Have With Your Buyer
4. Give Referrals to Get Referrals
5. Develop Specific Tools and Tactics

Here are the five steps in detail:

1.  Determine your need for referrals. Are you clear on where in your sales and marketing process you need a referral and for what purpose? Do you need help finding, keeping or growing your existing business? Do you need an introduction, validation, or affirmation from your referral sources? At which point in your sales funnel are you most in need of their support? Is it in qualifying prospects or developing prospects? For help in determining this, review the PACER Process.
2.  Understand your prospects’ buying process and then align your selling process and role for your referrer. Understanding your customers’ buying process is not new but applying this knowledge in obtaining referrals might be. Where can your referrers have the most impact?

If your business is a relationship or an anniversary business, your referral sources need to be constantly cultivating your prospects for you, but if your business is more transactional or event-driven, then you want your referees to be far more opportunistic and pounce when they see the chance to recommend you. Here are two articles to help you decide this. Click Events or Anniversaries: What’s Your Business? Or Relationships or Transactions: What’s Your Business?Once you understand the role your referral sources play in your prospect’s buying process, you will of course align your selling process to parallel their behavior. And the role that your referees need to play will be clear.

3.   Define the ideal relationship your referral source should have with your buyer. What are the ideal   referral sources for your business? For example, some businesses enjoy most of their referrals from law or accounting firms while others are best referred by suppliers or even their competitors. To determine who is best for you, understand the role your referral source plays with your prospects and why a prospect would accept their referring you to them. For example, a parts supplier is unlikely to refer a financial planner to a purchasing agent because this is not a likely topic for them to discuss. Consider whether your referral source has the sufficient trust and professional intimacy with your prospect to make such a referral. For example, a specialist can often refer another specialist while another specialist will seldom refer a generalist. Also, your referral sources must see you as a scarce commodity as opposed to being abundant. If every business broker is hounding every banker to refer them their next deal, how can anyone care or remember which one to refer to whom? The 80/20 rule applies just as much as to referees. A few will refer a majority of your leads and most will only refer you once. Understand who falls into which groups and why. Finally, make it as easy as possible to refer you. I provide any referral source with the following description of my target prospect and exactly why when and how they would hire me. Come up with your own example along the following lines as I have in my business.

A  target prospect for Birol Growth Consulting is a majority owner/operator of a business who is:

A.  Dissatisfied with his or her business’ level of profitable growth.
(as good or bad as it may be)
B. Impatient to grow their business to the next level
C. Is a
a. Services Firm
b. Wholesaler/Distributor
c. Manufacturer

D. Willing to take and apply advice by working with an expert who empowers optimism
E. Willing to pay for the value of outside advice that generates ten times the investment

4.   Give referrals to get referrals. Apply the Golden Rule in your referral activities. Generously and freely give away as many referrals as possible. While many will disagree, I urge you not to take  commissions or fees for referring business. The time you put into developing a fair scheme is not worth the loss of trust you face when your peers learn you are making money off of whom you referred to them. Despite many opinions to the contrary, do not enter into tying, exclusive relationships or “Circles of Influence” with only one referral source such as a single law firm. Your power in referring and being referred comes from being able to match the right people with the best skills and style. There is no one size fits all here. But most importantly, remember who did refer you, follow up and keep them posted on how your or their referral faired. There is nothing more disappointing to refer or be referred and never hear what happened. If you do refer someone constantly and there is never any reciprocity, ask yourself if you have fulfilled the basics as outlined above. Before getting annoyed with your non-responder, ensure you have refocused on the basics, if you have, then it is time to find new advocates.

5.   Develop specific referral tools and tactics. Make it easy for your referral sources to refer you. One of the great tools is the reciprocal referral letter. Attached at the bottom of this article is a sample letter you can send, one-for-one, with a mutually referable source. Making it one-for-one is fun, as it challenges both parties to provide great referrals and then to hone their selling skills in obtaining as many appointments, proposals, and closed sales as possible.

Find ways to donate your services to charities so that your referral sources can place you in highly visible venues. Serve as a subject matter expert for their customers where you can showcase your expertise while helping your referral source’s clients.

Summary

Referral marketing can be one of the most enjoyable as well as the most profitable tactics in growing your business. Develop your skills and practices in this area and you will surely enjoy better clients, better relationships not only with those who value you the most, but most of all with people you like whom like you. And after all, isn’t this what business is supposed to be all about? For help in accelerating your referral marketing efforts, to explore how we can refer each other, or simply to learn more, please contact me at (412) 973 2080 or at abirol@andybirol.com.

Here is a sample referral letter you can modify for your business or, (with my gratitude) use to refer Birol Growth Consulting:

Mr. John Smith
President
Smith Products
222 Allegheny Blvd, Suite #4
Wexford, PA 15444

Dear John:

Growing my firm has always been challenging and risky. I often wrestle with questions of what to invest in and when. I wanted to pass on an intro of an exceptional business expert and friend of mine, Andy Birol, of Birol Growth Consulting.  He is a published author (5 times I think), accomplished speaker and advises small to mid-sized operating businesses owners on effectively driving top line profitable growth.

• How has my marketplace changed its buying behavior and how should my firm respond?
• How can I create more profitable growth?
• What new channels for profitable growth can I pursue?

While you may not have heard of Andy, I know him personally and he has an extensive record of working nationally to great reviews. In his short time here in Pittsburgh, he has become a regular columnist for eTEQ Magazine and has been accepted into Leadership Pittsburgh.

I told Andy you were on my short list of must-visits and I’ve suggested he give you a call.  He’s making a positive impact in Pittsburgh’s small business community.  I’m sure meeting with him will be a good use of both your time.  You can learn more about Andy before he calls, checkout his website at www.andybirol.com.  His articles, client list and newsletters are particularly interesting.  No doubt you’ll get an autographed copy of his latest book, The Five Catalysts of Seven Figure Growth, CareerPress, 2006.

If you have any other questions or need anything further please don’t hesitate to give me a call.

Thanks so much and take care,

Sincerely,
You
Your Company
Your Address
Pittsburgh, PA 15232