Should Small Business be more like Big Business?

The Sales Archaeologist

Should Small Business be more like Big Business?

Posted by Frank Belzer on Tue, Jul 20, 2010 @ 04:10 PM

Maybe you need to have a little more clarification before you answer that question? No doubt if you are a small business you are thinking about the big budget, the marketing machine and the funds available for R&D. Of course that would be nice you say!

But that is not the context of my question and that context might actually surprise you. I am asking this question based on an experience related to networking and referrals. Now if you are a small business owner perhaps you are thinking - that is our strength! We are all about relationships and introductions are our bread and butter. But are they really?

I met with my small business referral group this morning and heard at least 5 of the members talk about companies that they had been working with and they all sounded like good prospects for me. I have given at least one referral each week and many of those have converted to business so I have no problem giving. But the group seems stingy when it comes to offering referrals.

This afternoon I called a VP from a 200+ million dollar company and reminded him I had been hoping to get an introduction to another several million dollar company - no problem he said, I'm sorry I have just been busy.

So why is that a big company - traditionally not what you think of as a referral based business does a better job than a smaller supposedly referral based collection of companies do in this area? Why are small companies hesitant even when someone has been generous with them? Can anyone help me understand this paradox?

COMMENTS

Frank, I've written 37 articles that included the word,"referral". The most recent article was yesterday. Referrals à la Rick is my 4th most popular post of all time. People talk referrals. They want referrals, but they can't stop being self-centered long enough to learn how to get good at referrals.

posted @ Tuesday, July 20, 2010 8:09 PM by Rick Roberge

You need to understand your customer’s business needs in order to offer good referrals. Some members of the referral group just don’t understand those needs. They don’t see the “opportunity” for you. Your job, then, is to make sure that those other members understand you and your business, who your prospects are, why you are the best candidate for the job and why there is value to them in referring you to their customers. If the members of those “referral groups” don’t know you and your company very well, they may be hesitant to make the referral until they “know you better.” You have to “sell” to the members of the referral group before you can expect good referrals from them.

When a business owner/representative makes a referral, it affects their relationship to their customer, so they make referrals with care. If their customer acts on the referral and it does not pan out or goes badly, it can negatively affect the referring business’ relationship to their customer. The VP from a 200+ million dollar company’s reputation is going to suffer a lot less from a “bad” referral than a small business owner’s reputation. This is probably the the biggest reason that small businesses are “stingy” with referrals.

In some instances, people do not make the referral because they have some reason to believe that you might not be the “right” referral for that specific customer. I’d approach those members one on one and ask them directly why they did not refer you to “Prospect X.” They may have had a good reason not to do so. You state that the businesses under discussion “all sounded like good prospects for me” but the members of the referral group either did not “see” this &/or had some reason for not making the referral. It was not necessarily stinginess.

posted @ Friday, August 20, 2010 11:13 AM by Daria Lewis

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Should Small Business be more like Big Business?

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