How to Get Results with Relationship Capital
You ask a friend to take you to the airport at 6AM and your friend says ‘yes’ no strings attached.
The bartender sends over a free round on him because you’re a regular.
Your credit card company waives your late payment fee, maybe for the second time, even though they always say it’s a “one-time courtesy.”
This is relationship capital. You’ve developed a short-hand and a trust with your friend, your bartender and your credit card company. You’ve been a friend, a regular and a client for a long time and these people know, like and trust you.
You’re in it for the long haul and you’ve returned the favor myriads of times as a loyal, regular and good customer and friend.
So are you using relationship capital in your business? And if not, why the hell not? It’s time you have the courage to start using relationship capital as an entrepreneur. So let’s look at all the creative ways you can do that.
Why Is Relationship Capital Important?
There’s one important reason to use relationship capital in your business:
It collapses the sales cycle.
Unless you’re a complete bonehead in your business, as you grow your relationship capital grows too. Relationship capital is always cascading north. And you’re not a bonehead. My guess if you’ve got some relationship capital going on.
How Is Relationship Capital Created?
Relationship capital is created through consistency and intimacy. When you are steadfast and consistent in your business practices:
- customer service
- quality assurance
- delivery of goods and services
you stand out and you are remembered.
When you have consistent repetition of customers and clients you begin to develop sales intimacy. People lean on you, they trust you to keep your word and show up. This is money in the relationship bank.
How you use relationship capital can move the needle of success for your business.
Relationship capital in your business takes time to cultivate just like it took you awhile to screw up the courage to ask your friend to drive you to the airport at 6 in the morning. But once you have it it’s money in the bank, literally and figuratively.
The biggest bang for your relationship capital as an entrepreneur is referrals: when a customer, client or vendor refers a new candidate to you. And the easiest way to get more referrals is to ask for them from these sources.
Asking for referrals should be SOP in your business and if it’s not already use this post to create a targeted and accessible template to ethically influence more referrals.
3 Ways to Use Relationship Capital and Get More Referrals
#1: Know Your Ideal Client
I speak and train primarily coaches, other trainers and small business entrepreneurs and if you’ve followed me for a while you know that I harp on knowing thy avatar. Know your ideal client. If you’re a podcaster, know your listener. If you’re a blogger, know your reader. If you’re a YouTube influencer, know your viewer. No matter what your business, know your target market.
Why is this important when it comes to relationship capital? Because not every referral is the perfect candidate for your business. Sometimes you get someone who just doesn’t fit with your business. It’s better to know that as soon as possible. And when that person comes along don’t waste your time trying to make it work, pass them along to an associate. That way you’re not wasting your time and you’re putting relationship capital in the bank.
#2: Serve First, Request Second
Always be offering to refer clients, offer assistance, give away a free gift, volunteer knowledge, know-how and resources. By always being on the alert for where you can give you will naturally be leaving the door open to make requests when you need it.
If you’re always serving you never have to worry about asking for referrals. People love to give and they especially love when you offer them a way to give back. And if you’re in the habit of serving first you should have no issue asking for a return favor.
But what if you’re in the habit of serving and still find it hard to ask for referrals? Check Out this post for a great tool to help you overcome your fear of scary work. Scary work is work that can really move the needle in your business. So learning to do the scary stuff is a lucrative skill.
Another advantage of getting in the habit of serving first is you’ll never have to keep score. If you start trying to keep score you’ll either have a nervous breakdown or live in a constant state of disappointment in the human race. Don’t do that to yourself. Just give, give, give and don’t keep score.
The advantage of giving is for you to know that your karma account is full. It’s not about keeping score.
#3: Belong To At Least One Mastermind
No matter what industry you’re in there will be at least one mastermind business group you can join. And if there isn’t then start one. Masterminds are underrated workhorses of business success. They do three wonderful things very well:
- They allow you to network freely knowing that everyone there is wanting to meet everyone else
- They level the playing field while giving you access to people in your industry you may never get a chance to meet otherwise.
- They give you access to resources you would not normally have access to any other time of year.
Masterminds operate on the principle that relationship capital is one of the most important commodities in business. And that relationship capital needs the free flow of circulation to help every business thrive and grow.
I belong to three masterminds and what I’ve learned in each of them has paid me back again and again in my business. Now, masterminds usually cost money so you may be thinking, “well that’s not relationship capital if I have to pay hundreds or even thousands of dollars to be there.”
I disagree. A mastermind is where you are literally paying for relationship capital. You’re paying for access to all the leaders in your industry and all the networking you could ever stomach. Why not take advantage of that?
What is your Cost of Inaction by not joining a mastermind? IOW, how much money are you leaving on the table by not gaining access to others in your industry?
You’d be a fool not to buy into that instant capital. It’s like getting a business loan from a bank. But unlike a loan you’ll get returns that will last you a lifetime if not the life of your business.
3 Costly Mistakes To Avoid
Requesting referrals before serving. Don’t do this. Unfortunately it’s something people remember and it’s not a good look. It’s a selfish way of doing business and it’s not something you want to be known for. So build your business reputation around being a giver. Then ask.
“You will get what you want in life, if you help enough other people get what they want.”
If you’re in a position of wanting something that you don’t know how to get, find someone who can help you and assist them in getting what they want. This principle made Zig Ziglar and successful man. I’ve used this principle myself with great success. That’s why I’m making such a point of it now. Your business will see a shift upwards by doing this.
Making the first meeting a sales pitch. When you meet a referral for the first time don’t make the meeting all about you or your product or your sales pitch. Just get to know the person. Find out where they came from. Find out what they’re looking for. Get curious about what brought them to your door.
This sounds so simple and trivial and time consuming but it’s actually the greatest sales technique no one talks about.
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A referral is different from a cold or even warm candidate. They came to you on the wings of goodwill so treat them with reverence, treat them like a friend. That treatment will get back to the person who referred your candidate and notes to self will be taken.
Not acknowledging the referral. Always, always, always send a thank you card, note, phone call, text, email, or black crow with a heart-y thank you. Let your colleague know that you’re aware of the trust they placed in you when they referred their friend to you. They placed their trust in your good service and that shouldn’t go unacknowledged.
Your good service makes you look good but it also makes them look good for having the smarts to refer to you. Saying ‘thank you’ is good business and good manners and is another gesture of service.
The Wrap Up
There is nothing wrong with asking for and pursuing referrals in your business and everything right with it. In fact, it should be SOP for every business. But there are the right ways to do it and wrong ways. Don’t do the wrong ways. Do the right ways.
Serve, serve, serve as a business model. And when that referral walks through the door or picks up the phone to call you make sure you’re the right person for them by knowing your ideal client. If they’re not your ideal client don’t try to manhandle them into a sale, pass them onto an appropriate colleague.
Belong to at least one mastermind. This step is a game changer for your business. Masterminds accelerate who you know and your business knowledge. They also get in front of industry leaders and give you access to resources you normally wouldn’t get. Masterminds are Miracle Grow for relationship capital.
Finally, don’t ask for a referral from someone before you’ve built up a bit of relationship capital. Don’t be that guy. There’s plenty to go around for everyone. So get in the habit of serving first and watch what happens.
Also, don’t make the first meeting with a referral all about you or your sales pitch. A referral is a special kind of candidate. Treat them like that. That treatment will get back to the person who made the referral. And on that same note, thank the person who made the referral. Always acknowledge that person. This is another thing that will not be forgotten.
Relationship capital is an asset and resource for your business. Have the courage to use it and use it wisely. You deserve the benefits of relationship capital to build referrals and accelerate the growth of your business. And your savvy will grow your influence.
Click Here to learn how to ask for and get powerful testimonials for your business. Testimonials are a powerful tool for any business. A perfectly structured testimonial will accelerate your marketing results and cut your marketing budget in half.
What’s your best or worst relationship capital story? Share below, your insights could help others!