How’s that for a controversial headline. Grabbed your attention, didn’t it? Let me explain. What I’m talking about is cross-pollination, lead sharing, or referral business.
Every entrepreneur I’ve spoken to will tell you that up to 100% of their business is referral or ‘word-of-mouth’. Some firms, like my own, can go 6 years plus on a fast track of growth and success relying upon repeat and referral business. But as every business owner knows, you have to follow the 80-20 rule: you should be spending 80% of your time working ON the business and not IN the business. That means growing the business by making sure the hopper is full.
One great way to expand your network and get more ‘feet on the ground’ is to set up meetings with service providers that offer a skillset or service that compliments your own. In some cases, some of your services may overlap, but your core competency shouldn’t.
We’ve dedicated a good portion of our budget towards membership dues in various business and networking organizations such as the local chamber of commerce and even volunteer in several community service / corporate responsibility organizations. All in an effort to meet new people, specifically to meet other service providers. If you’ve attended a business expo recently, you have experienced the whirlwind of sales calls that bombard you in the week following heavy networking. Don’t brush off a service provider because you may not necessarily need their services at that moment. Instead try and identify if there may be some synergy between the companies. Is there chemistry between the founders or the company philosophy? At the very least, get together for coffee and explore the possibilities.
Recently we met with a company that specialized in video production. They had been around for quite some time, but things had slowed down for them in the last few years so they downsized. They had let go of their full time staff and were down to outsourcing and using freelancers. Over the years they had amassed quite a strong network of clients and had done some very high profile work. We invited them to tour our studios and meet our full-time staff. They got a close-up view of Peralta Design in action. We admired their work, they admired ours. We were on the same page when it came to our attention to detail and cutting edge design solutions. It made total sense for us to work together. We offered to white label some work for them if they needed a team, and we would have them white label for us if we were able to offer their services to one of our clients. In cases where it made the most sense to simply refer the business to each other, we will agree on a commission percentage that works. As far as what ‘wholesale’ rates we’ll offer each other, we’ll remain flexible so we can both ‘eat’. As I like to say, slow money is better than no money.
Some things you might want to consider and require when sharing leads with another company:
• Reciprocal NDA (Non-Disclosure Agreement)
Basically, its an NDA that works both ways. Both parties agree to keep their dealings with clients secret, thus allowing for the white labeling to happen. A white-label product or service is a product or service produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if they made it.
• Trust, Chemistry and Synergy
Go with your gut here. Are you willing to put your company’s reputation on the line for theirs and vice versa? If the client is used to you delivering without any excuses, will this company do the same. Founders should be cut from the same cloth. The same level of dedication to quality, high standards, turnaround time and execution must be on par. You don’t want to partner up with a client who doesn’t feel the need to work as hard as you do. You will be referring clients to each other and the purpose here is to gain business, not lose it.
• Hourly rate, retainer or project by project
Keep it simple. To start off, it is best to begin with a easily manageable project to test the waters. Offer your new strategic partner a rate that is lower than you standard so that they can mark up your time and make money. Additionally, they will be Project Managing the whole thing since they will want to continue to interface with their own client as you would as well.
The best thing about this arrangement is that you have more feet on the ground. You have just doubled the size of your sales team. Your new strategic partnership offers you a whole new set of potential clients (which remain your partner’s clients) and your partner can now offer your company’s services in addition to their own so they can now cast a wider net. It’s a win-win.
Ramon has over 20 years of experience in award-winning, market-proven, print collateral, marketing material, iphone/ipad app and website design specializing in corporate identity and branding. Ramon’s passion for entrepreneurial design was borne out of 10 years as Creative Director for Jay Walker at Walker Digital, the Stamford based idea laboratory and business incubator holding over 300 US Patents. Ramon served as Senior Art Director on the start-up launch team behind Priceline.com, a Walker company and invention. Most recently, Ramon’s logo and identity work was selected to be published in “Typography and Enclosures” the fourth book in the Master Library series by LogoLounge.
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