Part II: Building “Psychological Rapport”

Last week I shared that “networking” is much more than just going to networking groups to “get business”.  And that networking is “the process of building relationships with the mutual desire and intent to connect to others”. I also shared that instead of networking to “get business”, you want to shift your thinking to becoming an asset to others before they become an asset to you. And that by doing that, you will get so much more than just jobs. Finally, I shared my super secret networking phrase that has made my companies a lot of money.

This month I want to share a very unusual but effective technique for building “psychological rapport”.

You have probably heard of “building rapport”. Rapport is defined as “an emotional bond or friendly relationship between people based on mutual liking, trust, and asense that they understand and share each other’s concern”.

A psychological rapport is when you build rapport covertly instead of overtly.

Normally when we think of building rapport, we think of doing things like finding common interests and so on. That is very important as you saw with the “listening” technique I shared last week.

Psychological rapport happens when a person automatically senses that “emotional bond” without you saying a word. All of us make up to 11 separate assumptions about a person we meet within the first 60 seconds. What happens after that will either confirm or challenge our initial, automatic reaction. Our conditioning has trained us to do this.

Everyone does it automatically.

So, you have entered into a conversation with someone who can be an asset to your company. You are learning about them, practicing emphatic listening. You are thinking about ways that you can serve them before spewing about your company. As you areshowing genuine interest in them, you are building rapport.

The way you present yourself will determine whether the conversation transforms into a positive business relationship or not. This includes how you dress, how you groom yourself, your body language, and your tone of voice. Studies have revealed that these items have more impact than what you actually say. Of course, what you say is incredibly important and I will get to that later on in this series.

“Psychological Rapport” occurs when the sensory information that is picked up by the other person is in congruence with their value system. And this is done without them even knowing it.

So, building psychological rapport is the process of managing the sensory experience that others have when they meet you. This is not impressing someone as that is usually done overtly. Building psychological rapport is something that is done covertly. By learning how to use your image, your body language, eye contact, and tone of voice, you can manage psychological rapport.

Here’s is a very unusual, but effective technique to build psychological rapport called “mirroring”.

Mirroring is basically copying the other person’s body language. If they have their hands on their hips, you put yours on your hips. If they are leaning against the wall, you lean in the same direction. As you are speaking with them, if they scratch their head, you scratch yours. I know this sounds awfully strange, but it works! Now, you aren’t so obvious that the person notices that is what you are doing. You do it in a subtle way. For example, if someone adjusts their glasses and you don’t wear glasses, you would perhaps scratch your temple briefly.

This technique can be used on sales calls as well. If you are sitting across someone’s desk, mirror them. If they lean back, you lean back. If they lean forward, you lean forward.

Amazingly, this simple (and kind of weird) technique sends messages to their emotional sensors that says “hey I like this guy – I trust this guy”. And the rapport is build automatically and immediately. Sure, you still have to listen and learn and consciously build the relationship. But this technique helps to eliminate some of the hidden roadblocks that you weren’t even aware of. You didn’t realize that your body language wasn’t in agreement with their internal value system. Most people who are good at networking pick up on this instinctively and their body automatically projects the right message.

For those that need a little help, and even for those who are experienced, mirroring is an amazing technique.

Now, here’s the most amazing part of all…

Once you have practiced this for some time, you can actually check to see how you are doing. When you feel that you have secured psychological rapport with the person you are speaking with, change your position. If they change theirs, you know without a shadow of a doubt that they trust you internally. And that’s huge, because lack of trust is the number one barrier to building a relationship or making a sale.

So, the next time you meet someone, think about how you look. Think about how you smell. Think about how you sound. Make eye contact. Listen emphatically, and practice mirroring to see what happens.

Next week, I’ll share the key to getting a bumper crop of new clients.

the fear of success

by Howard Partridge

Fear can be one of man’s worst enemies. Fear causes us to make the wrong decisions, to

say and think things that aren’t constructive, and worse, it paralyzes our decision

making process. The decisions that are not being made are vital to our business. Fear

can be defined like this:

False

Evidence

Appearing

Real

The “evidence” that we have somehow conjured up in our minds isn’t even real!

The fear of failure keeps us from doing the things that we should do to be successful,

We fear that by taking steps to make things better, we will fail, therefore we do

nothing, sealing our failure for sure.

Many business owners suffer from a different kind of fear – the fear of success.

The fear of success is the fear that we experience when we think of what might happen

if we are wildly successful. Deep down you fear that you won’t be able to measure up.

That you will let yourself and everyone else down. You see the fear of success is the

same as the fear of failure – it just comes in a different package.

What we must realize is that the success journey is always littered with failure! It

is the only way to succeed! The fear of success is a direct result of the fear of

failure! We actually fear that we are going to fail, so we don’t do the things that

would make us successful.

This is the reason that we stay in what is called the “comfort zone”. The so called

comfort zone is the uncomfortable place between success and failure. We will do enough

to keep from failing, but we won’t do enough to succeed for fear of failing.

In the comfort zone there is no real pain (except for the unfulfilled longing inside),

and there is no real gain. Your comfort zone may be “comfortable” for now, but it

creates a great deal of discomfort by staying there. The greatest danger of staying in

your comfort zone is that you become increasingly comfortable which may cause you to

slip into the failure zone.

Success requires some failures, and they won’t be comfortable. These failures are not

real failures at all. These are small lessons in life that lead to success. If you are

willing to experience some minor failures – if you are willing to be uncomfortable for

short periods of time, then success will be yours. If you are not willing to make a

pain investment either monetarily, physically, mentally, emotionally, or spiritually,

then chances are you will not reach your success destination.

Someone once said that successful people are merely those who are willing to do the

things that unsuccessful people are unwilling to do. Someone else said that successful

people “fail” their way to the top. And yet someone else said “a wise man learns from

his failures.”

In life, and in business, you have many choices. They may not be the choices you want,

but a path must be taken. If not, your life and your organization will be tossed to

and fro by the winds of change, and by circumstance. If you don’t make a decision, you

will stay in the valley of indecision. This deadly valley leads south – to the failure

zone.

Finally remember what our success hero Zig Ziglar says “Failure is not a person, it’s

an event. And it’s an event that doesn’t have to be repeated.”

With over a decade of coaching small business owners, I am amazed to discover how few really know how to come up with the right pricing strategy for their business. I hope this post helps. I have a LOT to say on this subject, so stay tuned!

The first question you need to ask when pricing your service is this “Am I building a business or am I just working for a paycheck?” Surely many of you that have been attending seminars around our industry have been challenged to ask this question. The difference between building a business and working a job for a paycheck is that with a job you only get paid for the work that you do. When you own a business you get paid for doing whatever work you do in the business, plus you get compensated for owning the business.

That compensation is for many things such as planning time, risk, reinvestment, retirement, as well as paying for the cost of doing business.

Therefore, when you begin to calculate how much you charge you need to think about the lifestyle that you intend your business to provide you. Do you remember the one and only reason that your business exists?

The ONLY reason your business exists as a vehicle to help you achieve your life goals!

Of course, that includes providing for your family. Think about your life. Think about why you do what you do. Is your business helping your lifestyle or hindering it? Once we know where we are going we can begin working on getting there. My good friend and world-famous sales trainer Zig Ziglar says “You cannot hit a target you cannot see!”

If you are waiting for your lifestyle and everything you are working for to happen by accident, you have a problem. Things happen by design, not by accident. You need to set clearly defined goals.

With that said, before I share how to determine what your price should be, let me mention one word of caution…

Don’t go overboard with the intense focus on lifestyle. For one thing, building a successful business is a discipline. It is a discipline that is kept based on strategies and assumptions we have made about our business. If the assumptions are correct and we are disciplined to implement the strategy, everything works. If the assumptions are wrong, then neither strategy nor discipline will work. If assumptions are correct, and you are disciplined to carry out the strategy, but the strategy is wrong, then things don’t work – but there is hope because you can always change your strategy.

I hope that wasn’t too deep. If it was, re-read it. The assumptions that we make in pricing are crucial. Let’s take a look at some possible assumptions about pricing:

“No one would ever pay that much for my service”

“People will pay almost anything for the right service experience”

“My market doesn’t have any Mercedes Clients”

“Mercedes Clients exist in every city and town, I just have to know how to find them”

“My service isn’t worth more than X amount of dollars”

“My service is worth more than any of my competitors”

“I must be competitive with other companies”

“I have no competitors other than myself”

Do you see how assumptions can sway our thinking? Now when we begin to think about strategy, we will naturally use the assumptions that exist. A strategy that is based on the assumptions that the competition is heavy and people will only pay a certain price will naturally direct you to a strategy of lower prices and more advertising.

An assumption based on the fact that there are people that are willing to pay a higher price, and that your service is worth the price you charge, and that you don’t need every Tom, Dick and Harry in town to build a profitable business and achieve your life goals will obviously direct you toward a strategy that plucks out the “cherry” clients that you want.

So make sure that your assumptions and belief systems are in line with your strategy before thinking about how much to charge.

Now, to determine how much to charge, you begin with one basic, elementary principle that must be taken into account when pricing anything whether it’s toothpicks or mold remediation.

Can you think of what it is?

Simply put, how much it costs.

Period.

Many small business owners haven’t a clue about how much it really cost to do business. And the reason is that most small business owners don’t like the “numbers”. They just like doing the technical work that they do.

To determine your cost of doing business, create a 12 month budget. I am saddened to report that most business owners I talk with do not yet have this in place. Many times these are the very people who are having difficulty making the amount of money they need to build their business.

A simple way to create a budget is to use a feature in QuickBooks:

In Quick Books, select Company, then Set Up Budgets. A window will pop up with each month of the year that is connected with the Chart of Accounts that you have already set up. Simply plug in the projected numbers for each of the upcoming 12 months (get your data from your past 12 month income statements and make the necessary adjustments).

Once you have completed this exercise, you will be able to take your assumptions into account. What happens if you raise your price 20% and you lose 10% of your volume? What happens if you hire an employee? What happens if you get more production out of existing vehicles instead of purchasing new ones?

Do you see how plugging the real numbers in can help you make decisions? Now your decisions will be made based on real data rather than feelings.

One more hint that I would like to share with you. I have been sharing this in my marketing seminars for several years now. Many of the income statements I see are missing a very important component. The component that is missing is the cost of sale, otherwise known as Cost of Goods Sold, Variable Cost, or Consumables. Experienced business owners wouldn’t even think about trying to business without this all important number, but many in our beloved industry started a business without really knowing what a business was (the author included). We simply launched out offering a service, people paid us, we paid the bills, and hopefully there was money left over. If so, it was by accident or at best intuition.

Here’s how a basic income statement is laid out:

INCOME (Revenue)

-COST OF GOODS SOLD (gas, supplies, direct labor, or anything else that is “consumed” in producing the job.

= GROSS PROFIT

- EXPENSE (Fixed expense such as rent, office supplies, administrative salaries, telephone, and marketing (marketing expense can vary greatly in many companies. Especially companies that are growing or in transition. Also, please note that you can have sub-categories for closer tracking).

= NET INCOME/LOSS (the amount left over. If you are incorporated, you are probably paying yourself a salary, so this would be your profit. If you are a sole proprietor, this may be your salary and profit.

As I mentioned before, many income statements that I see are set up without the COST OF GOODS SOLD category. In other words, the look like this:

INCOME

-EXPENSE

=NET INCOME/LOSS

Including the COGS is very important because once you realize the percentage of

cost, you can simply and quickly calculate your potential return on any investment you make in your business.

For example, let’s say your COGS are running at 50% according to your latest income statements. If you spend $2000.00 in advertising, how much would you need to get back in revenue just to pay the advertising expense? Four thousand. Actually a little more because there are hidden cost in administering the investment. Let’s say you hire someone for $3000.00 per month. How much do you have to increase sales just to pay for that person? Six thousand.

So as you can see, the COGS becomes extremely important in planning. There may be times when you make investments that don’t pay off immediately, but at least you know exactly what it is costing you.

Now that you have an outline and a 12 month projection to work with, you can run a few different “scenarios” to pick out your strategies.

Project how many clients you will serve that month at a certain price range. Project what the cost will be, and factor your fixed expense.

If your assumptions are correct, and your strategy proves out through staying disciplined to see it through, your in the money. If it doesn’t work, you review to discover whether your assumptions were incorrect or whether the strategy was flawed, or you just didn’t do what was required to implement the strategy.

There is no bigger name in personal development than Zig Ziglar. I had the awesome pleasure of being on stage with Zig, “the redhead (his wife Jean), his son Tom and Bob Burg and Thom Scott who put on the Extreme Business Makeovers event here in Orlando.

]]> http://howardpartridgeblog.com/on-stage-with-american-legend-zig-ziglar/feed/ http://howardpartridgeblog.com/special-report-should-you-offer-a-reward-to-those-that-refer-you/ http://howardpartridgeblog.com/special-report-should-you-offer-a-reward-to-those-that-refer-you/#comments Tue, 13 Apr 2010 11:13:21 +0000 admin http://howardpartridgeblog.com/?p=538 THE REFERRAL REWARD SYSTEM

To maximize your referrals, you should definitely offer a financial reward. You will get more referrals and your advertising dollars will go down. Sure you can get referrals without a reward, but you will get much more if you if you offer a reward. Plus, offering a referral reward gives you something to talk about. If you don’t offer a reward of some kind, you cannot aggressively ask for referrals without turning people off. Why should they refer you? What’s in it for them? By offering a reward, you can constantly motivate them by promoting “free cash or service”.

Is everyone motivated by money? No. Can everyone accept a reward? No. At the time of this writing I have spent almost 20 years developing and testing my referral reward system and have overcome many of these obstacles. You may have thought about different ways to reward those that refer you. You may have even tried different reward techniques. It is important to have the right type of reward system. There are many that do not work. I developed a simple, but phenomenally successful reward system. Try to use this as close as you can. Obviously depending on what type of business you have, you may need to modify it. I will try to give you some tips on modifying it without losing the potency. The danger in changing something that is proven is that one small change could prevent it from working at all. Learn my system and then we will discuss possible changes.

Here’s how it works…

A 10% referral fee is offered to anyone that refers a new client to our company. This is for new clients only. After they have used us once they become a repeat client. A Referral Reward Certificate is issued and it is redeemable for CASH or FREE SERVICE in the amount of the certificate. The certificate is valid for one year. The expiration is to promote repeat business during the year and to eliminate having an endless number of referral certificates floating around in the marketplace.

Here’s an example… Let’s say that Bob Jones refers Sue Smith to my company. Sue Smith spends $500.00. A referral certificate in the amount of $50.00 is sent to Bob Jones. Bob Jones may then elect to redeem the certificate for cash by returning it to our office. At that point a check will be printed for $50.00 and sent to Bob. If Bob prefers, he can hold onto that certificate and present it for service. He will get $50.00 worth of service regardless of the amount of his bill. If his bill is $100.00, we will take $50.00 off. It’s that simple. Over the last 20 years I have tried other methods of rewards. This method is the simplest to implement and overcomes many problems that other reward methods present. The following question and answers reveal why this method is best.

Questions and Answers
a) Why 10%, not $10.00? If someone refers a $2000.00 job to me, will $200.00 or $10.00 have more impact on them? If they have one $2000.00 client, chances are they have more. I want their attention! If I were to offer a 15% discount on their next service (another popular but totally ineffective means of rewarding), and the new client spent only $100.00 with me, but the referring party had a $1000.00 cleaning bill. The next time the first party cleaned, I may be offering $150.00 for a $100.00 job. Not good math.

b) Why cash? Why not just limit the reward to service or product? Because there are many referral sources that are in a prime position to send you many, many valuable clients, but, have no interest in your service or product. Or they could not possibly use as much product or service that they can generate through referrals. Case in point: A carpet salesperson that has a prime opportunity to refer a carpet cleaner practically every day lives in a rented house. Plus, he could not possibly use that much cleaning. What he is interested in is cash. Gas money. Dinner money. Golf betting money. Whatever. Money talks.

c) Why use a certificate? Why not use cash or a check? There are some referral sources that have a conflict of interest and they cannot accept a referral reward (insurance agents, some Realtors technically can’t), or they somehow feel uncomfortable accepting a reward. If you send cash, you have put them in an uncomfortable position. The certificate is completely transferable and may be passed on their client or anyone else of their choosing. Another reason you don’t want to use cash is because it diminishes your returns, which will be revealed in the next point. The reason you don’t want to automatically send a check is because of reasons just discussed, many of those checks will never be cashed, creating a bookkeeping nightmare for you. Our experience is that less than 50% of the certificates will be cashed even though the referral source appreciates the acknowledgement. This brings me to the next point…

d) How can I get a 20 to 1 return? If you offer a 10% referral fee, and only half the certificates are redeemed, that gives you a 20 to 1 return. Not bad considering that the best campaigns in traditional advertising most often times don’t even produce a 4 to one return! Even if you offered 20% and every single one was redeemed, you would have a 5 to 1, guaranteed return! Of course you could choose not to pay a referral fee at all, but my experience has proven that would be unwise.

e) Is a referral fee legal? What is the difference between a “kick back” and a referral fee? A “kick back” is illegal. This is when you reward an employee or someone that has an “interest” in the company that does the work. Example, let’s say that an employee at a commercial account that you call on is instrumental in getting the contract secured for you. You cannot reward this personal financially! That’s illegal.

f) Do I need to issue a 1099?. If an individual redeems more than $599.00 in a calendar year, you must issue a 1099. Check with your CPA and attorney to get advice of how they want to handle this situation.

g) Multiple Referrals – What do you do if more than one person referred you? You can either issue all referring parties a certificate or you may elect to reward the first party that referred the new client. Let’s say there are two if your redeem rate is 50%, you still have a 10 to 1 return. If they both redeem, you still have a 5 to 1 return.

h) What if they can’t accept a fee? If your referral source is in a position where they have a conflict of interest, let them know that the referral certificates are sent automatically and they can choose whether they would like to pass it on to their client, give it to someone else, or simply discard it.

i) What if they say “I referred you, but never got anything?” You may print your referral certificates on duplicate and keep a file, and/or simply refer back to where you notated the referring party (covered in the tracking section), and cross reference your check register to insure that it hasn’t already been redeemed. Then, by all means honor it, even if it has expired. The whole purpose of the reward program is to encourage referrals, not to find a way not to pay!

j) How do people redeem the certificates? They either mail it back to you indicating they would like cash (a check), or they present it for products or services.

k) Do I pay the individual or the company they work for? I have found that if you wait to get “approval” from the manager or owner to get referrals, you may be waiting a long time. In many cases, an employee has direct contact with clients and is in a perfect place to refer you. The manager or owner is covered in paperwork and problems and doesn’t have time to think about it. So, my suggestion is to reward the individual. If the company decides that they want you to pay it to the company, then pay it to the company. Encourage them to let the employees have it or at least share it. If they won’t, I would go as far as matching the referral fee myself. Even if you pay 20%, that is still a 5 to 1 return on your dollars. If statistics hold true and only 50% are redeemed, that is a 10 to 1 return. Remember this is only on new clients that were referred. In the big picture, you will have repeat business and possibly new business from advertising. The referral fees my company pays out total 1% of our sales. Not bad.

*** To get my proven Referral Reward Program CHEAP, click here ***

Watch it live for free

Five Steps to Reaching Your Goals

(c) photo by Howard Partridge

Step 1: Set Specific Goals

Step 2: Have the End in Sight

Step 3: Write Down Your Goals

Step 4: Break it Down

Step 5: Review and Adjust Regularly