Most of us are aware of Pareto’s Principle, the 80/20 rule. This principle states that 20% of the input gives us 80% of the output. The top 20% of your salespeople account for 80% of your business. The top 20% skills you have, account for 80% of your success. The top 20% of our customers will give us 80% of business. When we use this principle it allows us to narrow in and focus on the most important clients who are in our target market.
You’ll find that most people tell you to focus on your top 20%. Here’s the big question: What do you do with the other 80% of people who you do not work with?
Most of us let this 80% of potential business fall to the wayside because they are not our target market and we have no system set up to still do some form of business with them. However, this is not the case for Tim Johnson.
Just last year, he generated $11 million dollars from REFERRALS! He is the master of building a referral based business. By sending clients that he cannot work with to his friends and referral partners, he is able to receive commission for the introduction and new business.
Imagine having the potential to make money from EVERY business conversation! Tim speaks to about 3,000 people per year, and if he cannot help them personally, he knows someone in his Global Renegade network who can.
The thing is, we can all do this if we are intentional about it. As Tim puts it, “We need to date our referral partners. We put so much time and effort into people that do nothing for our business, yet we do not build strong relationships and invest time into our referral partners.”
Tim is a speaker, author, real estate developer, and business coach who is well known around the world. He starts each business conversation by saying, “Is it okay with you that if at anytime during this conversation I realize that I am not the right fit for you, I introduce you to someone in my network who is?”
Each time he is met with a resounding YES! Who would say no to this offer? This strong referral network has built Tim a net worth of over $4 million dollars. Tim uses a framework called SOLD and if you use this framework you can build a strong referral network as well.
Below, is the exact SOLD framework Tim uses:
According to Tim, everything is mathematical. He approaches each conversation looking to learn and serve. When you approach conversations in this way, you focus on relationship building instead of feeling like you have an agenda to do business.
Ask great questions here and give the person you’re speaking with an opportunity to share their situation and what they are going through. Tim always asks, “What do you need and how can I serve you?” This is a powerful question that most people neglect and it’s the reason they are not experiencing as much sales success as Tim.
“Here is a powerful yet simple rule. Always give people more than they expect to get.” – Nelson Boswell
Objections = Opportunities
As the old wise quote states, “We were given two ears and one mouth for a reason.” This means we need to speak less and listen more.
Too often, people pitch and become salesy instead of being human and having a conversation where they are listening to the person they are sitting with. When you are listening, you give yourself the opportunity to learn their problems, obstacles, and needs in order to identify new opportunities.
Leverage referral partners
As you are gathering information you will identify if you are able to provide the solution that your prospect needs. If you cannot, it is time to leverage your referral partners and make the introduction.
By starting out the conversation saying, “Is it okay with you that if at anytime during our conversation I realize that I am not the right fit that I introduce you to someone who is?” you have already pre-framed yourself appropriately to leverage your referral network if you cannot provide a solution that is needed.
Your prospect will be very appreciative for your honesty and will trust your judgement. You get a lot of brownie points when you have the integrity to say that you are not the right fit, but let me introduce you to someone who is.
“People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.” – Mark Zuckerberg
Rinse and repeat this process. Having conversations in this way will enable you to work with the top 20% of people you speak with, and still provide value to the other 80%. In this way, every conversation opens up the opportunity for new business.
SOLD is business growth through asking great questions, active listening, and leveraging referral partners. Start to capitalize on the 80% of business that you are missing out on by referring these people to other service providers in your network.
If you think about providing value in service of others first, then you can leverage the SOLD framework for increased revenue in your business by simply being a connector and receiving commissions of 10%-25%.
Do you have referral partners in your business? Would love to hear your experience in the comment section below!