Developing strategic business relationships is critical to business health

You may have heard the expression, "It all depends on who you know." Well, it does depend on who you know. Referrals and positive word-of-mouth promotion are the most effective ways to expand your company. You need to use a systematic approach to build business relationships that will help to increase your profitability. How can you do this? Consider utilizing the following steps.

Develop a strategy.

Take the time to think through your plan of reaching out to customers, associates in your industry, and colleagues in the business community. Write your plan down on paper so you have something tangible to follow, review and modify. Organize your time so you will be able to implement your plan. Remember, your plan is dynamic; there are always new ideas and methods to consider.

Establish realistic goals.

As part of your strategic plan, write down some realistic, timely goals that you will work to accomplish within the next year. Commit time each week to be able to reach these goals. You could set weekly goals of contacting five potential customers, obtaining one testimonial from a satisfied customer, luring back two previous customers who haven't recently done business with your company, and making two referrals.

Form strategic alliances.

Provide referrals to other businesses that sell to your target market but provide complementary, not competing products and services. Establish agreements in which those businesses refer customers to you and you refer customers to them. This type of arrangement will highlight your credibility and connections, and generate referrals from associates for whom you've generated business.

Maintain visibility by being active in associations.

Be an active member of your local business community and your industry. Volunteer with nonprofit organizations when you believe in their cause. Join your local chamber of commerce and get involved in committee work and events that enable you to meet business associates and potential customers. Become actively involved in your industry association and meet experts to help you grow your business. Participate in civic organizations that have goals similar to yours, and consider joining a networking group. The personal bonds you create can increase new business opportunities.

Be an expert by sharing your knowledge.

You need to examine the areas in which you possess expert knowledge. People like to see individuals who are willing to "give back" to the community. Donate your time and give presentations at no charge to organizations like the chamber of commerce, civic groups, trade associations, or other groups. Sponsor events, or provide samples of your product or service for fundraisers. Write articles for publications that reach your target audience and for industry publications. These activities serve to increase your visibility while giving you an opportunity to showcase your expertise and generate good will.

Utilize technology effectively.

Stay in touch with your existing and former customers. There is a wide selection of communication tools such as e-mail, voice mail, texting, Facebook, Twitter, MySpace, blogs, or the phone.

Reach out to previous customers.

Contact previous customers on your customer list who no longer do business with your firm. Find out why they left your company and try to resolve those issues. Within reason, say you are sorry and try to recapture their business. You can't please everyone; however, you can't afford to have people spreading negative comments about your firm. You need positive referrals and recommendations.

Select a panel of mentors or an informal advisory board.

Continue to actively seek a group of mentors who have knowledge of your industry and potential customers. These advisors can help you with planning and problem solving. Associates you meet at a trade show or conference, someone you've done volunteer work with, consultants, or people retired from your industry can be valuable sources of information. These individuals can also help introduce you to potential customers.

Actively solicit testimonials.

Testimonials can help build your credibility, and reduce the fears customers have regarding unknown companies. Positive statements from satisfied customers endorsing your products and services can be included in your product literature, Web site, e-mails, advertising, or other communication opportunities. When a sale is made or the project concluded, you should ask for your customer's business again, and for their testimonial about how your company has successfully met their needs.

Offer superior customer service.

Satisfied customers who have experienced excellent customer service will usually remain loyal to a company as long as their needs are being met. "Going the extra mile" should be the theme song of your company. Remember, it's all about the customer! How does the customer perceive your level of customer service? When you do a good job for your customers, they not only bring you repeat business, but will send other business your way as well.

Remember the old adage, "Luck is the residue of diligence; the harder I practice, the luckier I get." Be diligent in serving your customer's needs and they will be diligent in spreading the word about your company's great qualities.

- Karen Bradshaw, business specialist, MSSU Small Business and Technology Development Center

(This article is reprinted with permission from the Joplin Tri-State Business Journal.)

This story was featured in the Feb. 2010 newsletter