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The first time you hold an advance, you can spend all the time on developing a mission and vision.

Once your vision and the process becomes established, you will spend more of your time on how to achieve specific goals.

Prioritize and Organize
With a solid mission in place, an executive team can select the action steps that are most important to the accomplishment of the firm’s vision.

Otherwise, everyone seems to let the latest “rush job” divert attention from the important actions.

Here’s an example: A business had gotten behind on deliveries. Some customers were complaining and the employees were ducking calls because of the many complaints.

One problem was leading to another. Once the timeliness problem was addressed at the advance, the executive team identified the bottlenecks and prioritized the steps to solving the problem. Within 30 days of the advance, systems for logging, preparing, reviewing, and streamlining delivery were revamped. Within 60 days all deliveries were timely. Had the problem not been prioritized, serious customer losses could have occurred.

Energize
There is something intangible that occurs when a team is focused on a common vision and mission.

When the systems and strategies are in place to accomplish the vision, a powerful belief develops.

Focus and belief can energize your clients’ executive teams and your entire staff. The energy that surrounds an on-purpose staff will spark enormous results.

One of our clients has held strategic marketing advances for the past five years. Their 30% compound growth is a direct result of an executive team being on-purpose, being committed to the same goals, agreeing on systems and strategies, and holding each other accountable for results.

Wrapping up
The process of firm planning sometimes doesn’t look as practical as responding to immediate needs.

Nevertheless, when you run a good advance, it helps you clients avoid “fighting fires” and becomes very practical.

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The value ladder is a way of looking at the value clients receive from our services. Services at the bottom of the ladder are commodities.

Commodities are bought and sold by the pound, at the lowest possible price. You will have many competitors at the bottom of the ladder. As you begin to move up this imaginary ladder, client’s price resistance will diminish.

The Top of the Ladder
Moving to the top of the ladder, clients view our services that have an impact on their organization with almost no price resistance.

Operating at the top of the value ladder requires you to use leverage in your services delivery.

In order to achieve leverage and climb the value ladder, here are some keys to help you be more successful:

1. Select projects that will have a high degree of success. For instance, last year, in working with a partner group to jump-start the firm’s growth, we had a choice to work with two partners who needed a lot of intense help or two who were leaders.

Since this was a newer client, I chose the two leaders because I knew their early success would encourage others that they too could succeed.

2. Focus on working yourself out of a job. When you focus your services on making your client self-sufficient, you empower their employees to perform the commodity-level work, while you focus at the top of the value ladder.

You must work with your client to overcome the myth that only experts can do the job and you must help the client’s personnel to be more effective with their time.

3. Coach your clients to see the value of your working at the top of the value ladder. Explaining the value ladder concept to your clients will help you communicate the power of this formula.

4. Work personally with senior management and in groups with others. Senior management has the most influence within the organization for advancing your services or project.

Rather than work individually with lower-level personnel, you should structure group meetings and workshops to help them progress.

5. Train others within the organization to do your job when you aren’t present. We work with many marketing directors and coordinators to keep the momentum of our work progressing when we aren’t present.

These directors carry on our work after we are gone, and they are able to multiply the client’s return on their consulting investment.

Wrapping up
Working at the top of the value ladder is a good way to improve your client’s profits and your profits from the services you provide. Moving up the ladder will require you to think and act differently.

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One of the best ways for you to become an insider with your clients is for you to help their top management focus on business strategy.

Trends in leadership and management come and go, but the need for an executive team to get away, visualize, strategize, prioritize, organize, and energize is universal.

You can be the catalyst for your best clients when you lead them in a strategic retreat.
Most of our clients have eliminated the term retreat for a more purposeful description like go forward or advance.

The real purpose of an executive getaway is to focus the energy of a business on its mission.

Every business executive team should hold such a meeting at least once a year. Here are some ideas to help you organize a client advance. For practice, you can run an advance for your own firm.

Visualize
Plan some time at the beginning of your meeting to review the vision and mission for you and your business.

Two of our clients spend an entire weekend working on the mission of the individuals on the team as well as the mission of the business.

Managers and employees can operate most productively within an organization that knows where it is going.

Too often, when a firm’s mission ill defined, the needs of key stakeholders are not being met.

When the needs of clients, employees, families, and owners are not all addressed, serious problems undermine the success of your firm.

Only when your mission is defined can you select the appropriate systems and strategies that will lead you to your vision.

Effective business planning is perhaps the single greatest challenge facing the small business owner today.

Whether you call it a “retreat” or a “strategic planning session.” Going away from the business at least once per year to plan for the future is critical to a company’s success.

With the fast-paced environment we operate in today, it is too easy to lose sight of the vision and the goal of balancing the business’ goals with the objectives of the shareholders.

Failure to plan is like starting the Boston Marathon with no idea where the finish line is.

Strategize
During one of our client’s advance, the executive team examined their strategy for developing a technology consulting practice.

The executive team members had a clear vision of the next three years: “to be the dominant financial advisory firm for small (less than $150 million in revenue) manufacturing businesses.”

The firm’s mission is also clear: “to utilize our most-trusted-business-advisor role to help our clients succeed in a challenging world.”

The technology strategy that had been used positioned the firm as a vendor of software.

The executive team decided this strategy did not align with the vision of being an “advisory” firm and that being a vendor of someone’s product threatened the perception of objectivity on which “the most trusted business advisor” role is founded.

A more powerful, technology strategy emerged during the advance that is in alignment with the firm’s vision and mission.

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Want to build the most profitable relationship with your client? Try focusing on their profits first.

When you focus on achieving client profitability, you create business relationships that are synergetic, whereby the whole is greater than the sum of its separate parts.

A true partnership creates an equation where one-plus-one equals more than two. So, you have a choice to go it alone or partner with your clients.

Key to Partnering
How can we build the most effective partnerships with client? Here are five keys to building the most effective partnerships with clients:

1. Show your clients that you care about their success, not just the most recent transaction.

Successful partners never miss an opportunity to build the client’s business, to help with the client’s customers, and to solve the client’s problems.

Profit-focused professionals are more than order takers or transaction sellers. They have a completely different focus on the relationship. You will realize that the client’s success will improve your success.

2. Ask more than you tell. Telling can put clients in a defensive posture quickly. Always be respectful of your client by guiding with good questions to ensure that you and the client are communicating before you give advice.

Of course, the client wants your advice, but you will be more effective if you lead with questions.

Implicit in the idea of asking is the concept of listening to what is said, not just hearing.

You want to listen to the words and the meaning. To get the meaning, you must listen with your eyes and your heart, because the meaning is transmitted from the emotion, not the words.

3. Clearly establish roles and goals. In successful partnerships, each partner fulfills his role with reliability.

If it is possible to be misunderstood, you will be. Therefore, you must clarify who will do what by when.

Put everything you can in writing so each party has a good record. And finally, make no promises you can’t keep.

4. Be flexible. You have a standard approach to your practice, with standard system and contracts.

Nevertheless, your partner may want one that is not cookie cutter. One of the keys to an effective partnership is to fashion a relationship that is, of itself, unique.

5. Communicate regularly and thoroughly. Call your client-partner regularly, not just when you need business.

Call and visit on some periodic basis to communicate the nuances of the business partnership.

If you only communicate around the business transaction, you will be relegated to vendor status. If you want to be a partner, communicate, communicate, and communicate.

Wrapping up
When you focus on client profits, you both get the benefit of advisor status, plus you become more indispensable and obtain more repeat business.

Remember, you must abide by state and federal rules and your code of professional conduct regarding independence.

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Professionals who are involved in attest services cannot afford the appearance of also being an insider with their clients.

It is mandatory that accountants who are involved in attest work never allow their independence to be compromised.

You must abide by the code of ethics of your profession, as well as state and federal rules regarding independence.

The strongest and most profitable relationships with clients are those in which you are considered an insider.

When your and your clients’ interests are assumed to be the same, you are treated as one of the team rather than an outsider who has to prove himself. As I see it, there are three distinct levels of being an insider:

• Level 1 – The advisor can be an insider, if top management of your clients always checks with you prior to making important decisions.

Your clients trust you and rely on your perspective before deciding to act. Being accepted as an advisor may be an indication that your client would be receptive to level 2 insider status for you.

• Level 2 – The counselor is an insider who generally sits in on all key management meetings and participates from start to finish in the decision-making process.

From time to time, the counselor may take the lead in organizing planning meetings, conducting strategic advances, and negotiating contracts with your client’s customers.

• Level 3 – The Partner Leader is an insider who functions as a part-time chief: CEO, CFO, CIO, CAO, or CMO: Many accountants and attorneys function in such a role, sometimes without title.

Operating as a partner leader, you have the ability to inject forward-thinking strategy into the top management of your clients.
Being a Deep Insider
Many companies cannot afford, nor do they need, a full-time CFO. For example, the price tag on a top-level CFO might be $500,000 per year.

What the companies do need is $100,000 worth of a $500,000 talent. Instead, what many companies settle for is a $50,000 talent for which they pay $100,000.

The same concept is true with the CAO. Attorneys who fill the role of part-time CAO provide the high-level talent at a fraction of the cost.

So how does one become a deep insider? Usually, the client makes the decision after some period of relationship building.

You are more likely to be considered a candidate for this role if you are responsive, reliable, and creative for your client.

You also must have your sights set on something more than just a sale. Author Jim Holden believes that sales effectiveness moves through several stages.

The highest stage is insider status. With insider status you focus on helping the client in their markets as if you were an insider or partner with your client.

A great example is an insider status is the IBM and Federal Express alliance developed for service efficiency.

Federal Express stocks IBM parts in the FedEx warehouses for faster fulfillment. FedEx is focused on the IBM customer’s satisfaction with delivery of critical parts.

Wrapping up
When you begin to focus on your client’s strategic direction and customers, you will make yourself a candidate for deep insider status, perhaps as partner-leader.

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If you’ve been looking for ways to encourage staff members to ask for referrals, they might appreciate a few pointers from the clients and professionals they would be approaching.

Information direct from the “horse’s mouth” will always have more impact than what you might tell them.

When you’ve established a solid relationship with another professional firm in your town, you might want to ask them to serve on a panel discussion attended by your staff.

Invite the professionals to tell your staff members how they like to be asked for referrals.

You may even be able to obtain a panelist who is a staff member at another professional firm.

They can provide an ideal role model for your staff. Encourage the panelists to provide specific stories and examples of people who receive their referrals.

Five Keys to Referrals
I recently worked with a panel of attorneys to help CPAs stimulate their referrals. Much of what they said would apply to any professionals.

1. Work from your strengths.
People who are overly cautious will not earn respect. Help your referral source anticipate the future and prevent problems.

As a staff member, your statements about your firm are given more credibility than the partners’. Provide a balanced picture while still plugging your firm’s strengths.

2. Talk results.
Vague statements about quality don’t impress people. Give them clear examples of ways your firm has made a difference for clients.

3. Shoot straight.
Be up front about any problems or limitations of your firm. It builds your credibility.

4. Understand your referral sources’ needs.
Talk to potential referral sources about how to improve their own profits and how to satisfy their goals.

5. Share your professional expertise.
Advise your referral sources on how to use your firm’s services to their benefit. Give away “free samples” when possible.

Asking for Referrals
May professionals and staff, as a group, are timid and fear asking for business. There are ways to ask without being aggressive. When you are meeting professionals or their staff, you must express your personal style.

In general, to build rapport with a referral source, you need to understand their style and approach them in a way that will be comfortable for them.

Wrapping up
Some of your best referrals will come from happy staff. When your staff give you referrals, they have more credibility than when you ask for the business directly. They are seen as relatively objective sources of information.

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Once you’ve prioritized your referral contacts, the next step is to make an effort to build the relationships with low-priority contacts and to directly encourage referrals with your most likely prospects.

Refining Your Follow-up System
One accountant specifically budgeted the follow-up for each type of referral source. His “C” sources received his quarterly newsletter.

The accountant sent his “B” sources the quarterly newsletter plus, once a year, a business book with a personal note explaining why the book is of interest. His “A” sources received the newsletter plus a book every quarter.

“Hot” Referral Possibilities
There is a momentum to relationships. When you meet someone who has “A” referral potential, follow up immediately.

For instance, invite the “A” prospect to your office right away. To convince them that he or she will also benefit from such a meeting, you might say, “Our associates are always looking for excellent people to whom we can send our clients. Could u come by for an informal meeting?”

Prioritizing your potential referral sources is the first step to more efficiently reap referrals. What are the objectives of this second meeting?

First, to communicate how your firm is different – and better – than your competitors. And second, perhaps to ask for a referral.

If during this meeting you discover that the person is in reality a “B,” you might say something like this: “We share many clients with professionals just like you, and we hear they like our service.

If you have an opportunity to refer one of your clients, I assure you they will receive the best personal service I can provide.” Upon saying this, wait for a response.

Many times, the response will be, “We send our clients to Smith & Jones.” Respond by saying, “I’m glad you respect them so much. I hope one day to earn your trust and I’m willing to wait for you to be comfortable with me.”

Time Builds Relationships
For “A” prospects, you can afford to take a more subtle approach. Take the time to get to know their practices better, introduce them to all of your associates, and establish mutual trust and rapport.

Make the effort to keep in contact; research shows that they will become more comfortable with you over time.

After the first meeting, here are three possible next steps you can take.
• Invite your new business friend to meet with a client who may be a good match for them.

• Offer to host a “mixer” for all their associates.

• Invite them to an upcoming special event, such as a play, concert, or sports event.

There are other ways to expand the relationship, such as attending a group they already attend or exploring an interest you have in common.

At this juncture, it is vital that you move to enhance the relationship. Do not let the relationship drop now.

Wrapping up
Once you have established relationships with “A” sources, referrals and joint business should come naturally.

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Some referral relationships will develop quickly once you’ve made contact with someone who refers to providers in your area regularly.

Other relationships will take years to develop fully. After you’ve make contact with a potential referral source, you need a system to follow up and build the relationship.

One of the first things you want to find out is the extent to which your new contacts actually refer clients to others.

Prioritize Your Efforts
I use an ABC system for rating new referral sources. You can also apply this rating and follow-up system to people you’ve known for a while. They also vary in their potential as referral sources.

The next step depends on whether you’ve classified them as an “A,” “B,” or “C” potential referral source.

A “C” contact is one who says he or she rarely refers clients to other professionals, or one who has a well-established relationship with a competitor of yours. About half the people you meet will be “Cs,” at least initially.

Follow up with these people by putting them on an email or newsletter list, invite them to your seminars, and practice other low-cost ways of staying in touch.

Some will warm up over time, and some will end their relationships with your competitors.

A “B” contact is one who might be able to make one to five referrals to you each year. He may have a relationship with another firm, but you sense potential. Initially, as many as 40% of the people you meet will be “Bs.”

Follow up with this group as with the “Cs,” plus. Contact them twice a year, just to stay in touch, and – if your talks prove fruitful – schedule another face-to-face meeting.

Your Best Contacts
An “A” contact either needs services for his or her own practice or has the opportunity to refer clients to you more than five times a year.

Of course, you probably won’t meet too many of these – probably about 10% percent of all the contacts you make will begin as “A” contacts. But, for these few, you will want to undertake the highest level of follow-up.

Wrapping up
Prioritizing your potential referral sources is the first step to more efficiently reaping referrals.

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The most profitable marketing activity in which you can engage is building referrals. And the best way to develop referrals is getting to know all the other professionals – the bankers, bonding agents, insurance brokers, accountants, lawyers, and so on – whom your present clients utilize.

These other professionals have a natural inclination to help their clients’ businesses. And, that includes meeting with you to generate new ideas for the benefit of your mutual client. During the brainstorming, business relationships get built that lead to referrals for you.

Most referrals come from people who are impressed with your work and who trust you to handle their friend well. There are three great ways to stimulate your referral sources to send you business.

Ask for a Referral
Many professionals I’ve met say they don’t want to offend their good clients by “hitting on” them for new work.

The truth is the person is really too timid to ask for the referral. Every person enjoys the feeling of doing something for someone they like. So, don’t deprive your good clients of this pleasure.

Some of your clients may think you don’t have room for another client. Let them know your doors are open for business by asking for a referral.

Several successful firms will write a letter periodically asking for referrals to about a third of their clients annually.

Enhance their Revenue
When you get to know your client’s other service providers well, you can find ways to enhance their revenue.

Send them a referral, include them as a team member on decisions affecting your mutual client, or do business with them.

When you enhance their revenue, you create a due bill of which you will be the beneficiary.

Stay in contact
Asking for a referral may be difficult for a timid professional. And opportunities to enhance others’ revenue may be limited. But anyone can stay in touch.

In many interviews I’ve conducted with people who refer to professionals, they tell me they send most referrals to the professional they think of first.

That means that the person who stays in touch regularly through a newsletter program, a letter campaign, a seminar, personal visits, phone calls, or for any business reason is going to capture a portion of the referral source’s mind. When you capture a share of the mind, you will get a share of their referrals.

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Do you have anyone in your circle of relationships, business or professional, who would say great things about you? Perhaps even say them to a potential prospect?

If you do, congratulations – consider them a treasured source, real gems with which to work. If not, why not?

How to Spell Referral
The earliest recorded use of the word referral in the professions was in 1927. It’s been around awhile. Maybe it’s time to rediscover it again.

Here is a simple summary of referral source development basics:
• Relationships. Relationships are the key concept in RSD. The quality and quantity of referrals you get depends on the quality and quantity of the referrals you give!

Referral marketing works because within these relationships, the goal is mutual benefit.

• Engagement. Teaching your referral source how to engage a prospect in a first contact, on your behalf, has the most significant impact on your later success in converting them to clients. Always remember: someone else can “sell” you better than you can see yourself.

• Follow-up. After the source talks with the prospect, more follow-up may be appropriate.

First, from the source, with further verbal or written information (materials you have thoughtfully provided to your source).

Then you meet with the prospect soon thereafter, ideally with an introduction from your source.

• Evaluation. Analyze the activities and results of your RSD all along the way and you’ll be able to tell what to stop, start, and continue doing!

• Recognition. It’s important to recognize your sources – both at the time the referral is made and certainly after a referral has become a client. Keep your referral sources informed.

• Rewards. Establish a consistent reward program that demonstrates your appreciation.

Rewards would include thank you letters or phone calls, or having them visit your firm and meet with your partners.

You may ask them to attend CPE or CLE courses your firm sponsors. You should not, however, pay for referrals.

If you sometimes reward certain actions and sometimes not, your sources may consider you ungrateful or unreliable and, certainly, inconsistent.

• Advising. Provide your sources with valuable advice. Make them confident that you are an important source for them and referees.

• Leadership. RSD requires self-leadership. Stay with your RSD efforts for the long run.

• Service. Continuously seek and find ways to serve your best sources.

Wrapping up
If you have not yet realized the vital role of RSD in the long-term success of your practice, use this formula to set up a system that works for you.
 

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