Entrepreneurs are learning so much about growing their businesses through word of mouth and increasing their referral base; it's time to start thinking outside the box and exploring new dynamic ways to encourage others to use you, refer you, and partner with you in growing your businesses.
Catalyst events are one such out-of-the-box way to stimulate more referrals and build relationships that may result in referrals from people you could once only dream of sending customers your way.
In this discussion of catalyst events, I'll be covering two types. The first is a strategic alliance event (external), and the second is a recognition event (internal) for top referral generators. The goal is the same: to create greater "referability" for your business with others by building relationships and increasing your social capital.
Strategic Alliance Events
Bringing people together who'll be able to create a symbiotic relationship with one another results in great visibility, which leads to credibility and, eventually, profitability for your company (the VCP Process of networking).
How do you capitalize on the potential of your strategic alliance events generating referrals for you? By inviting the right people to these events. A long-existing example of a strategic alliance event would be coordinating a foursome of golf between several business contacts you have that you know would be able to cross-refer one another, such as your CPA, your financial advisor and your real estate investment advisor. One or more of these individuals might have been trying for months to secure a meeting with one of the others, but the aspect of a golf game could be just the thing that'll bring them together.
As they develop a deeper relationship with each other, they'll keep in mind that you brought them together and do what they can to make sure you're getting what you need. I love the dynamic that's created when you help others get what they need; they always seem to find a way to see that you get what you need as well.
There are, however, more creative catalyst events for creating strategic alliances than the "old faithful" golf game. For example, I know of one Salvation Army Executive Director who had a lot of BNI members on his board. They wanted to be able to serve the community and develop relationships with others on this board that would result in referrals for their businesses. One of these members was a financial advisor, who had been trying to get an appointment outside of the board meetings with one of three millionaires who served with him on the board; but, to no avail.
As a result, he came up with the idea of taking the entire board on a charter boat deep-sea fishing trip to help develop the relationships with each other. The charter boat was part of the co-op advertising for the financial advisor.
The Salvation Army Director asked the wealthy board members if they were interested in the deep-sea fishing trip. He told them he would ask the financial advisor if they could come. This got their attention. They wouldn't take an appointment from this guy, but they were willing to do a social event of this type with him. They were all so excited about this event, that the one who wasn't able to make it on the date that was chosen, actually asked when it was happening again!
Doing an event such as this calls for regularity and repetition. Others will hear about it through the grapevine and ask to be invited or feel very excited about being invited. Hence, you want to do this more than once.
A spin on this concept was recently shared with me by an associate of mine. He told me about a friend of his who organized a fly-fishing trip that was restricted to people investing $1 million or more in assets with him. He went to the local sporting goods store to rent fly-fishing equipment for the trip; the manager ended up working it out to have them come in to the store to give them the equipment and a guide, at no charge, just to get the exposure. The businessman then went to the Hummer dealership that gave them some Hummers to use if he could come with them so he could meet these heavy hitters. The suppliers were interested in the referral part of the program because of who else was going to be there.
Catalyst events must have a feature of exclusivity in order to work. The people attending are investing in their social capital as well. Things like events at private clubs that most people can't get in to, or golfing on courses that most people can't get onto work well. Another point is that the person hosting it (e.g.: you) must be someone who's passionate about that event. So, if you don't like opera, don't plan a catalyst event around opening night of Les Miserables!
Referral Recognition Event
When you have a pool of people who are already referring you regularly, doing something special for those folks is a no-brainer! Some entrepreneurs have recognition events such as hunting trips or wine tasting trips. They have a reputation with their customers, and the customers actually vie with one another to be able to be the ones who get to take part in the event. That means, literally, that they're trying to out-refer one another. Not a bad place in which to be!
The Recognition Events can be held annually to thank the top referral generators each year, or they can be held once a quarter to encourage shorter-term results, which could quite possibly increase the total number of referrals your business would receive within the year. You may choose to reward the top five referral generators and allow them to bring a guest, or reward the top 10 referral generators and give them the chance to meet and mingle with each other over the course of the event. Or you may choose to reward just one person during each time period. The choice is yours. Experiment with what works best for you.
One of my business associates on the East coast told me of an entrepreneur who organizes a "luxury spa trip" that her customers and clients clamor to be able to attend each year. Guess what? She only takes the top eight people who've referred her new business throughout the past year. She's done this year after year so that she's well-known in her business community for this trip.
Be creative when choosing what your Recognition Event will be. If you live in an area where there are live shows, taking these folks to dinner and a play is one idea. Use your imagination and don't be chintzy. If you want people to vie for attendance to your event, you must make it something worth competing for. You will profit from that in the long run, so it just doesn't pay to skimp when choosing what your reward will be.
Keep in mind that a Catalyst Event isn't about meeting people through the Yellow Pages; it's not a casual event. That being said, you can't turn the Catalyst Event into a sales pitch, either, or it won't work. It's all about making a connection vs. making a contact. Be sure you've let the other people you've invited know that they have to finesse the event, not strong-arm it. It's about developing relationships.
When done right, Catalyst Events can revitalize your word-of-mouth marketing efforts and garner for yourself a reputation in the business community for being the one to whom everyone loves to refer others. Now that's a great position in which to be in the business world!
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.