Part 1: The Kurt C.
and Fletcher Potanin Consultation Transcript
Paddi’s Systems Applied in Business
Thefirst of two parts of a Consultation Transcript between Fletcher Potanin and Kurt C.,
proprietor of a mail order Health and Safety Equipmentbusinessin the United States.
In this consultation transcript, Fletcher Potanin,
publisher of SolutionsPress is helping Kurt C. to ap-
ply Paddi’s referral concept, system and ideasto his
business.
Kurt runs a mail order safety products company,
and he first heard about Paddi from Jay Abraham
and Mike Basch at an Abraham Marketing Summit. In
Kurt’s own words,
Over the last 18 years we have seen
ourselves as following this mission: To pro-
vide products that enhancethe well-being,
health and safety of people at work, at
home or at play, around the world and
aroundthe clock.
We supply products that protect people
who are food handlers and food processors,
like disposable gloves, hair nets and
aprons, etc. Those same products are
sometimes used in other manufacturing
settings like in laboratories for people do-
ing research.
In addition, we have a complete line of
first aid products and our full line of safety
products which include hair protection and
safety spectacles, respirators, hard hats,
foot protection and signage, signs and la-
bels and just about anything else you can
think of in that arena.
Kurt’s business is definitely more mainstream than
Paddi’s dentistry. This consultation is primarily about
Referral Systems, and yet you'll read howeasily and
sensibly each of Paddi’s systemsin its turn fits right
into Kurt’s concept of whatis possible and desirable
in his business...
Rule 1:
Know the Customer You’re Trying to Reach
F: The first step in a successful referral systemis this:
you haveto clearly be able toidentify andarticu-
late the kindof person your customers should be
looking to refer. Only when you canclearly iden-
tify your ideal customers, can you then ask your
current customers who fit the mould to recom-
mendyour business to peoplejustlike themselves.
So, Kurt, who’s your ideal customer?
www.solutionspress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
K: I think we narrowed it down to about 20 SIC
codes in the US, so we have defined it to a
degree.
: That’s good. I’ve seen your catalogue and it’s a
tremendousrangeof different products. It looks
as though your clients could come from several
different industries.
: Yes, we've also defined our customers geo-
graphically by their area of the country, and
also by the number of employees.
: Ok, here’s the keyto this first point. You need to
knowexactly whois your ideal customer, not just
demographics about your current customers. You
see you only want to attract the best, most ideal
customers to your business. So the moreclearly
you understand who is your ideal customer, the
more easily you are able to attract that person.
Or, in your case that business. Do youdeal with
mostlylarger businesses?
: Actually, we're probably more in the 50-250
size, which is more small to medium sized
business. The large ones over 500, we’ve
kind of shied away from because they are just
too low a profit margin, and I guess more or
less a de-personalised service.
We have one client who is a large business,
but I’ve told them that I don’t want their
whole contract, just a small portion. I’m going
to show them how, with expert product rec-
ommendation, we can actually save them
more moneyand reduce their time off for in-
juries.
So, that'll be kind of exciting, but that’s a
huge deviation from what we've done in the
past.
: Have youbeen able to identify whatare the prod-
uct categories that are the mainstream of your
ideal client?
: Yes, we have. Our best products are dispos-
able in nature, the biggest ones being the dis-
posable shoe cover, cap and disposable
gloves.
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Part 1 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
Birds of a Feather...
F; Interesting. It’s very important to clearly define
yourideal customer — thisis really one ofthe k
to a good system — because ‘bitds of a feather
tend to flock together’ and you should only ask
ideal people to bring others like them. Not only
that, if you can’t define your ideal customer, you
won't be able to tell your existing customers who
to look for.
And when you ask your customers for the re-
ferral, if they know exactly who youridealclient
is, if you're able to define quickly andeasily ex-
actly who they should bereferring to your busi-
ness,it will make your referral system a lot more
successful. Does that make sense?
K: Absolutely! So first of all you find who is the
ideal current client and then you ask who else
is like them?
F: Exactly!
K: Or other companies that might be like them?
It might be their competitors probably but not
only right?
F: Right, most people know others who are inter-
ested in the same things. Invariably, you know
people in your industry or similar industries, and
they’re not alwaysdirect competitors. Most people
work in conjunction with others who are in simi-
lar businesses, and most people like to talk about
things they’re doing well or services they’ve been
resourceful in securing. Not always, but for meit’s
this way.
K: Oh I agree. I like to look at it as us being
creators not competitors because it’s a much
more prosperous consciousnessto have.
F; That’s an interesting philosophy, In fact,it’s likely
your ideal customerswill share some of your phi-
losophies. So part of the definition of your ideal
customer might be those people who love what
you do, love what youprovide, love your focus,
and enjoy the people that you have in your busi-
ness.
Your customers have particular personalities,
and you have a culture in your business that is
particular to you and your team. So your custom-
ers really do have to like what you do and your
viewonlife.
As well, they must be happyto paytheprices
you ask. They pay you ontime, they don’t delay
with their bills, their purchasing departments are
actually efficient andit’s not hard to be paid for
what you've sent.
2 Telephone (+61-7) 3823 3230
So I would suggest that you consider adding a few of
those type ideas to your definition of the ideal
customer.
K: Ok.
Referrals to Specific People
F: Now you may or may not want to actually say
those things when you're talking to a client — “pay
what we ask, pay it on time, enjoy what we have
to offer” - but those things yourideal client will at
least innately understand.
Now in Paddi’s business, clients refer their
friends back to their specific Care Nurse. Andit’s
amazing the wayit works, but it happens consis-
tently in other businesses, too.
Whena referral system is refined and is work-
ing very well — and yourclients are referring to
specific individuals who develop good relation-
ships — you'll find that people who are your exist-
ing clients are going to be verycareful about refer-
ting someone. Theywill tendto be selective about
whetherthatclient will be a goodclient for you.
Because the quality of the person theyrefer re-
flects directly back on to them inyoureyes.
As it happens, the same applies to you — you
have to offer a great service before your clients
will feel good about recommending you — butit is
great for you because gently educated yourclients
will tendtofilter the people they bring to you.
Filtering Customers
It may soundstrange, but when yourideal clients
are well educated, they will tend to ask the person
they’re aboutto refer somethinglike,
“Well you know before I send you to Kurt, be-
cause he and I have a goodrelationship and I
don’t want to mess that up bysending a badcli-
ent, what is your accounts departmentlike? Are
they going to mess these people around because
they’re good people and I don’t wantto do that?
Are you going to buy enough from them where
it’s going to be worthwhile having a good in-depth
relationship because Kurt actually goes out ofhis
wayand he'll spenda lot of time looking and re-
searching things that youreally need.”
That’s the sort of thing that will happen when
yourreferral system is really refined and working
well. Do you understand where I'm coming
from?
K: Oh yea, that’s great!
F; And so, to work towards that goal the most im-
portantstep is to find that ideal customer. And
Facsimile (+61-7) 3390 3610
 The Kurt C. and Fletcher Potanin Consultation Transcript: Part 1 of 2
when you do find them, gently educate them to
bring you more people like them. I suspect that
you probably have a lot of customers like that —
but notall of your customersarelike that?
K: Uh huh.
Don’t Ask Everybody — A, B, C, D
F: So if youreally, really, really Kurt want to have
more of these perfectly ideal customers — with
whom you can have greatrelationships, who will
pay the prices that youask andare really a good
source of your business — then ask only those
people forreferrals. Because if you ask everybody
for referrals you're just going to be getting more
people ike you’ve currently got — good as well as
bad.
As Paddi has done,I suspectthatif you looked
at your entire client database you could probably
segmentyour database into A, B, C’s and D’s. As
Paddi did, you could probably pick out thosecli-
ents whoarereally great to deal with ... and those
whoarea’t! You know, you send them their stuff,
but sometimes their credit cards don’t go through,
or their cheques bounce, or they only orderlittle
bits of stuff here and there. Maybe they’re not
yourbest clients but they’re there anyway andits
difficult to resist their business. But unfortunately
they’re often the people who give you the most
hassles when things don’t arrive ontime — do you
knowthe people I’m talking about?
K: Absolutely!
F: So it might be of benefit to you to actually grade
your clients and deliberately not focus on those C
and D clients. Certainly only ask for referrals from
your more ideal A and clients, and so that the
clients that have relationships with yoursales reps
are really only A Class clients because it’s not
worthwhile spending your time with someone
who’s a B or a C Classclient.
K: Right!
F:Soit’s very important in creating a referral system
because you have to be asking only good custom-
ers for referrals. Bad customers well, they don’t
like you enoughto refer people anyway. Andit’s
onlythose people whoreally enjoy doing business
with you whoare going to be your best advocates
and give you lotsof referrals.
So, I think you’ve got the ‘define your cus-
tomer’ down. And you should particularly define
the type ofclient who you wantto ask for the re-
ferral. Just make sure you define it so that you
www.solutionspress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
and yoursales reps caneasily sayit very quickly —
in a fewsentences that you can also put on paper
— so that your customers clearly know who your
ideal client is as well. That way, when they’re
gently educated they'll go hunting for those peo-
ple for you.
Rule 2:
Know the Value You Add in Your Cus-
tomer’s Terms
F: Now,the second pointrequires defining the spe-
cific value that you add to your products and
services, and in your customer’s terms. Now,
Kurt, you’re not planning on doing business only
byreferral like Paddi, is that correct? Youwill still
have your large-scale catalogues and your mass
mailings?
: Correct, true - absolutely. But our reps could
use this idea. Usually we work on about a
35% gross profit margin which is high for our
industry that averages maybe 20-25%. We
do that just by developing relationships with
these small to medium sized companies.
Kurt, it sounds as though you wantto add value
to yourrelationship with yourclients as opposed
to reducing yourprices.
K: I think so, I’m comfortable with that.
Reducing Prices vs Adding Value
FE: Philosophically I’m averse to reducing prices. It
puts a great strain on you and your business when
you do, andit doesn’t allow youthe leeway to do
nice things for your customers.
: That’s a great way to put it, and I think I'll
use those exact words in my negotiations. So
thank you.
You're welcome. It might be important for you to
gently educate your customers to understandthat.
If they want to have a goodrelationship with you,
they can’t screw you down in price because you
maynot be in business next year to handle their
orders. And if your clients are interested in effi-
cient transactions, it’s not in their best interests in
the long-run to screw you down to a margin
whichis unreasonable.
: Exactly right! We’ve got a great number of
catalogue accounts but our reps are only able
to develop a good relationship with 2 or 3
hundred clients at a time. So our reps might
specialise within a certain industry group, and
then the special value they add would be a
specific relationship they have to bring their
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Part 1 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
clients the latest most innovative products
that will reduce or minimise injuries and time
off against productivity.
: Wow! Kurt that sounds very powerful! I think
what you've just said is you have individual cus-
tomeror sales reps who have specific clients and
they keep and maintain advisorytype relationships
with those clients — is that correct?
K: Correct.
F: Then you have the wonderful opportunity in that
the rep who hasbuilt the relationship with a con-
tact at that company can ask that person or con-
tact to refer someone specifically to them. It
makesthe referral much more powerful when to a
specific person.
A Sample Script
So if ’'m a customerof yours Kurt, and you’te the
sales rep, you would ask me for the referral and
you would say,
“Fletcher, would you please refer someone
whois just like yourself (andbriefly describe your
ideal client). Because it means we can continue to
be in business and will be here for you the next
time you need us. It also means we can continue
to give you excellentservice and advise you about
the new products that will help you preserve
health and safety standards in your company. And
if you will, I'd like you to please refer that person
directly to me so that we can develop a relation-
ship justlike the one you and I have.”
: Are my clients referring people within their
company or from a different company? Be-
cause we find that there’s different purchasing
centres throughout many of our clients’ com-
panies.
: Excellent! Yes of course, if you have someone
purchasing from you in a 250-person business,
they may be only purchasing for their little area
you're saying?
K: Correct.
F: Excellent! Yes, that’s a great idea! In fact that
maybe something you will need to make certain
your repsask eachoftheir clients — “Are you pur-
chasing for the entire company?” You mayeven
include that in your definition of an idealclient — a
companythat has multiple divisions that require
health andsafety products or equipment.
: Ok great.
Telephone (+61-7) 3823 3230
Care Person System
FE: So, Kurt, it sounds like your sales reps are devel-
oping specific relationships with youridealclients.
And that’s the value that you're adding. You may
be a little bit more expensive, but many people
cravetherelationships in business that used to be
more common. Not everybody, but there are
somepeople that do — and they’ll go out of their
wayto find you.
I think that will be part of the definition of
your ideal customer — and you'll actually sayit,
too. “People who don’t mind paying a little bit
more for an excellent advisory type relationship
with a qualified health andsafety consultant.”
: Ok, great!
F: So theideal client is most important, andthe spe-
cific value that you're offering your A class cus-
tomersis the relationship that you’ve told me that
you'd like to build with those customers. You
only want small to medium sized business where
yourreps can have personalrelationships and the
customers don’t mind payinga little extra forit.
Andsoif they are going to paya little extra for
it, you’ve got to define very clearly those things
that you’re able to offer that add value to your
service and warrant yourprices. Andjustify the
relationship that people enjoy.
: It could be like personal product solutions and
development, working with clients specifically
to reduce their number one time off injury.
Asking questions to find out what they need
to be doing differently instead of just quoting
them a lower price on the same product that
they've used for the last 10 or 20 years.
Thereyougo. I think you understand these things
innately.
: Yea - I think so.
F: You need also to define and clearly articulate
those things in your customer’s terms. You
probably would do thatin your catalogue because
I suspect that most people find their introduction
to your business in yourcatalogue.Is that right?
: True - well I think we do that through trade
shows and the like and through the phone as
well, but the catalogue of course helps sup-
plement all those things.
Paddi’s Welcome Book Training Customers
F: This is an interesting area that ties in closely with
yourreferral system. Have you heard of Paddi’s
‘Welcome Book’?
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 The Kurt C. and Fletcher Potanin Consultation Transcript: Part 1 of 2
K: Well, no I haven’t.
F: Ok, Paddi has created a rather elaborate practice
brochure that he calls his ‘Welcome Book’. He
sendsit to every client before they cometo visit
with him for the first time. It’s an exceptional
sales tool and education system for Paddi. He
wouldn’t do business withoutit.
In this book, Paddi basically articulates all the
things he feels his clients want to know about
coming to a newbusiness for the first time. He
introduceshis business familyfirst ofall, who they
are and what are their interests, and there’s a pic-
ture of them. The book also describes where the
building is and directions on howtofindit so that
people coming for the first time don’t get lost.
Paddi’s practiceis little bit outside of Brisbane
andsoit’s a bit hard to find.
Paddi also describes in detail the general phi-
losophy of the business and the particular way
they like to do their dentistry — they prefer to use
gold instead of amalgam because of these rea-
sons...
They have a long term preventative care ap-
proachto dentistry as opposedto short term fixes
— so that’s why the prices here are usually 25%
higher than other businesses in the local area for
the same procedures (They’re not actually. Paddi
just says that so that whenclients receive their bill,
theyare delightfully surprised!)
Anyway,theybasically define what it means to
a client when they cometo do business there.
And here is where the ‘Welcome Book’ ties
into their referral system. In the ‘Welcome Book’,
Paddistrikes a bargain with clients ...
“Here is what we feel we owe to each other. It
is what we would like ourrelationship with you
to be built upon. If you have any concerns at
all with this, we are happyto discuss with you
what you feel would befair.
We musttell you in advance the cost of any
major treatment.
We mustdo ourvery best treatment for you.
We mustlisten to you whenyoutalk.
We must apologise and make amends if we
don’t perform as we promise, and you can be
thejudge of our performance.
Wewill do our absolute level best to keep to
time because we knoweveryone hates to be
kept waiting.”
Andin return theseare the thingstheyask of their
clients:
www.solutionspress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
“You must complain if there is something that
upsets you. That way we have a chance toput it
right, apologise and give you appropriate com-
pensation.
You should payyourbills on time.
Tf we ask, (we don’t ask everyone) we would
like you to try to refer at least one person
whom youfeel wouldlike the things we offer.
Tn this way we can continue to have a flowof
new people and be here for you when you
needus next time.”
Introducing the Referral Early
And then when somebody comes in for the first
time, theyactually sit down and ask, “How do you
feel about this bargain? Are you ok with that?”
I haven’t used the exact words, but that’s es-
sentially whatit’s like. So they introduce the refer-
ral concept in their ‘Welcome Book’. A client is
introduced to the concept of referrals before they
do business with Paddi so that when they do
come, they understand what’s going on.
Addressing Fears
In fact in the ‘Welcome Book’ Paddi does a few
thingscritically well. He seemsto identify and ad-
dress all the fears that somebody might have in
coming to a dentist — or any business for that
matter — forthefirst time.
Essentially, they are: HowdoI find the place?
What does the building look like? Where do I
park? What’s it going to cost? Who am I going to
meet? What’s going to happen while I’m there?
Those are the sorts of things that people don’t
understand when they come to a business or do
business with a particular establishment for the
first time.
Andthat lesson applies equally well to your
business. So if people find their introduction to
you mostlyin your catalogue, create a section that
describes what you do and howyoudoit so thatit
addresses mostofthe fears that people have about
doing business with a catalogue or a mail order
business.
K: Great, it’s great stuff!
Conditions and Exclusivity
F: So anyway, that’s an entirely different area, butit
brings us back to the point that it may be impor-
tant to introduce the idea ofreferrals early in the
piece as a condition of doing business with you.
5
Part 1 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
Youwill particularly want to introduce the idea
that your sales reps enjoyrelationships with only
your best customers. Not everybody can have
that relationship, butit’s particularly of benefit be-
cause you doall ofthese extra things... You can
only enter into one of these relationships if an ex-
isting client refers you.
: Great!
F: So, that may add someexclusivity to the relation-
ships that your sales reps have. And you might
actually want to change the name ofthetitle of
that person from sales rep to um ... safety care
representative or somethinglike that. Something
that positions that person not as a sales person
butas an advisor onthe health and safetyissues in
business. An expert from whomclients just hap-
pen to place orders for products. Does that make
sense?
: How about buyer safety consultant ... or a
health and safety consultant?
*: Bingo! That’s it. Health & Safety Consultant.
Those wordsposition yoursales people in a com-
pletely different way. Their focus is notsales.
Their focus is making sure thatclients have a nice,
safe and healthy working environment. It just
happens they recommend the creative use of
products you can supply.
So that would change the nature of the major-
ity of your business entirely, and that would give
clients a reason to do business with you. It also
sets up perfectly the way that you can then ask for
referrals.
Now, we’ve come ahead of ourselves and
we've sort of deviated and gone different ways
again, but I think — and I hope you agree — I’ve
painted a picture of the sort of thing that you
mightbeable to do, the value you can add to your
relationships.
K: Fantastic! Oh that’s great.
Rule 3: An Unusually Positive Experience
F:; Ok. Now, moving on to the next point — deliver
an unusuallypositive experience. This is a really
good step, but I think most people understand
this one in only a broad and superficial sense.
Most people would read this as providing great
customerservice, butit’s far greater than that.
The reasonthis step is socritical is that when it
comes time for you to ask for the referral, your
best chance for success is when your client is
emotionally feeling their very best about doing
business with you.
Telephone (+61-7) 3823 3230
K: At what point in the relationship do you ask
for the referral? Would you ask right at the
beginning to set the stage? “Before we do
business with you, I think you should know
that we do business by referral only.” Or do
you ask when they’re most satisfied, or do
you ask only after you've done business?
What do you think is the best approach?
Whento Askfor the Referral
F: Thebest time to ask for the referral is when you
have completed yourtransaction and yourclientis
delighted with your service. The more unusually
positive the experience, the more emotionally en-
thusiastic your client will be to tell others about
you.
K: Uh huh.
F: Now, in most cases, — well in the business with
which we have worked— we encouraged people to
make sure that they ask for the moneyup front.
Clients should pay for goods or services before
they receive them oras youdeliver them, Primar-
ily because when youask for the referral, it’s im-
portant that someoneis happy with their transac-
tion.
It is very difficult to ask for anything if some-
onestill owes you money,andthe longer someone
owes you money, the more theywill tend to look
for reasons whythey shouldn’t pay you, to find
reasons whyyour product or service wasn’t vei
good. Nowin your case, you deal with business
where probably a lot of the purchases go through
accounts departments?
K: Correct.
F; And the people that you’re dealing with aren’t ac-
tually writing the cheques?
K: That's right.
F: So you mayhaveto look at that situationa little
differently to figure when is the emotional high
point to ask for that referral. But essentially, once
you've delivered an unusually positive experience
and in most small businesses people would then
payfor — that’s the best time to ask for the money
for goods and services anyw: it’s just at that
pointthat is the best timeto ask forthe referral.
So my guess would be this. Your Health &
Safety Consultants are working with clients and
theytalk to them aboutsafety issues in a few dif-
ferent areas of their business. They give them
some very helpful information, and the clients
then make some purchases based on that infor-
mation. The verybest time to ask for the referral
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 The Kurt C. and Fletcher Potanin Consultation Transcript: Part 1 of 2
would be when those products arrived to the cli-
ent’s office. Just after they have opened up the
boxes and are happy with what you’ve sent.
Making a Difference, the ‘Little Things’
NowI’m notsure what you do in your shipping
or packaging, but we do business mostly by mail
order, too, and we recognise that the onlydiffer-
ence we can make, the only way we can distin-
guish our boxes from others is the way that we
package our products.
: Sure.
F: So I think you’ve noticed that when we send
things directly from our offices, welike to wrap
them and adorn them with a bow andlavender
flower.
: Outstanding, yes!
F: Well we feel that’s a nice way of wrapping our
packages so that people are particularly impressed
with the care that we’ve taken.
It’s important that you do something similar
with your packages ... something that reflects
your personality and culture so that whenyourcli-
ents receive a shipment from you,it’s a real pleas-
ure for them. It’s an exceptional experience. It’s
very different to packages they receive from
somebodyelse.
And that difference doesn’t have to be expen-
sive, in fact it doesn’t have to take more time or
cost more moneyatall. It just needsto bea little
difference, usually notrelated to the core of your
business, that shows clients the care you take in
paying attention to detail.
Nowfinding that difference depends on what
you do, your margins, the volume of the things
that you do,and the culture of your business. But
I’ve known for example, a company that does
audio tape reproductionthat includes in every box
they send out a nice little note, and attached to
thatlittle noteis little zip lock bag with 5 or 10
jelly beansin it. Andit’s always just a nice thing
to get thosejelly beans. I’ve seen people in our
office race to open the boxes just to get the 5
cents worthofjelly beans.
: Sure.
F: Nowthat’s a very simple example of a wayofdif-
ferentiating yourself, and I’m sure there will be
much morepotential in the things you do to sim-
ply and easily set yourself apart. You probably
have lots of opportunities to explore those little
things.
www.solutionspress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
Andironicallyit’s really thoselittle things that
will show youcare in the waythat you deal with
customers. They will give people the perception
that your products are really worth something.
That they’re valuable — that you’ve taken the care
andattention in selecting them.
In the ‘Paddi in Las Vegas’ audio publication,
Padditalks somewhatofthelittle things.
K: That’s right.
The Quality of Paddi’s Dentistry
F: Paddi discusses how in his business the little
things — his Critical Non-Essentials or CNe’s —
makeall the difference. That the quality of den-
tistry really doesn’t have much impact — Paddi
could do his dentistry one way or another and
people wouldn’t really know what quality of care
they’ve had.
And yet, they have a high perception of the
quality of dentistry because the tea is served im-
peccably. Because their name and their photo-
graph are actually on the dooroftheir personal
lounge when they cometo visit the practice. Be-
cause they’re greeted at the door by aamebytheir
own Care Nurse when theyring the doorbell. So
these are the Critical Non-Essentials, that are the
little things that makeall the difference in Paddi’s
business.
NowKurt, your business is a little different,
butthe sameprinciples apply. Unlike Paddi’s pro-
fessional service business, you rarely see your
customers. They don’t visit your offices, and so
therefore your opportunity to impress customers
with your CNe’s lies not in the way youcare for
customers during an on-site visi, You're dealing
with people mostly over the telephones, by corre-
spondence and by mail order. In your business
model, it’s somewhat more difficult to distinguish
yourself or the quality of your services. More dif-
ficult, but not impossible. In essence, you have to
look at each and every wayyouinteract with your
customers to find your CNe’s orlittle things. In
terms of customer service these CNe’s will make
all the difference in how your customers perceive
your consultants and your company.
K: Super!
The Critical Non-Essentials in Mail-order
F: Ok. Probably the most important area to consider
is the way your packages are delivered and the
service that surrounds that experience.It’s fair to
say that when yourclients receive their packages,
7
Part 1 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
they probably opened them up immediately to
look through everything and check to make sure
it’s right. Well it’s ideally right at that point that
you should be calling your best clients to make
sure everything arrivedsafely and on time. I sus-
pect youdo this anyway. Do you usually call?
:Um, not always. Um, we do if it’s a rush
shipment or if it’s the first time they’ve or-
dered from us.
: Ok. Wellifit’s the first time they’ve ordered,that
may be the most appropriate or most important
time, but with your very best customers wouldn’t
you want to call for every package? These are
you're A class customers. The ones you want
more of and the ones your Health & Safety Con-
sultants will be working with in depth. It may be
something to consider to actually go the extra mile
with those people because they’re going to be the
bread and butter of your business.
K: I like that! I like thata lot!
Packages Like ‘Gold’
F; In which case, there is a particular concept that
mayserve you to nutture within your team. Teach
your team to view your products as though they
are ‘gold’. If you encourage that sentiment, you
will begin to take the care and preparation with
your packages and handle them as though you are
actually shipping gold to your clients, not just pa-
per, plastic and metal.
Consider your products as gold because it will
give you a different perception of what you will
do in handling your packages. It will give you a
different mind-set about howyou’re going to
handle your products and howyou're going to re-
act when you send them to people.
That will help youtorealise that, yes, it’s very
important to payattention to detail and take care
in your work. It’s very important to call and ask
whether packages have arrived safely. It becomes
very important to see that everything is OK and
that yourclients have enjoyed whatyou’ve sent.
Adoptingthis philosophywill help youto jus-
tify making the customer experience simply ex-
ceptional. And that’s what you have to do if you
want to give your clients the incentive to refer
others like them, as well as the words and the ex-
citing storiesto tell others about yourbusiness.
K: Absolutely - great stuff!
... to be continued in Part 2!
Telephone (+61-7) 3823 3230
In the second part of this consultation transcript,
Fletcher explains howexceptional service makes
for exciting stories for customers to tell. Fletcher
and Kurt also discuss how to make it easy for
customers to refer, how to reward customers ...
(and how NOTto), how to ask for the referral,
and they distinguish between a high-end and a
more mainstream referral system.
Happiness & Profit: The PaddiSeries
Paddiis writing in detail aboutthe six most im-
portantsystemsin his business. Now you can
benefit from Paddi’s experience in building a
businessthatis profitable, works well and brings
youpleasure.
Building the Happiness Centred Business - A$29.95
Read howPaddi first learned that happiness in
business can have such an impacton profits,
and how communicatingefficiently with a few
simplerules can eliminate mostofthe pain of
business. (Also US$19.95 or UK£14.95)
Plus these ‘Works-in-Progress’ Special Reports...
Mobilising Your CustomerSales Force - A$89
How Paddi madean incredible referral system
and thrived!‘A’ class customers on-tap with no
marketing or advertising!
The Absolutely Critical Non-Essentials - A$89
Simple systemsfor the ‘Little Things’ that im-
press customers with your quality and become
the talking points of your business.
Simply Stunning Customer Service - A$89
HowPaddiquickly builds profitable long-term
customer relationships with less effort, fewer
people and amazinglevels of customer care.
TheSecret ofCustomers Who Love to Pay - A$89
Customers paying on-time and enjoyingit?
Paddi showsyou how.Build customer trust (and
profits) with Paddi’s ‘Buying Cycle’.
Training Customers to Treasure Your Business - A$S89
HowPaddiuses a simple system of education so
that customersvalue his services, are anxious to
buy... and pay what he asks.
Toorder,call or write to Loretta Cohenat:
Solutions Press
149 Old Cleveland Road
Capalaba, Queensland Australia 4157
Telephone (+61-7) 3823 3230
Facsimile (+61-7) 3390 3610
Orread aboutPaddi’s publications andlearn
more abouthis business at our website:
www.solutionspress.com.au
Facsimile (+61-7) 2 é ‘
Part 2: The Kurt C. and Fletcher Potanin Consultation Transcript
Paddi’s Systems Applied —- Part 2
Thesecondof a two-part Consultation Transcript between Hetcher Potanin and Kurt C.,
proprietor of a mail order Health and Safety Equipment business in the United States.
In Part 1 of this Consultation Transcript, Fletcher
and Kurt discussed the principles that are the foun-
dation of a goodreferral system: which of your cus-
tomers you should ask to refer people to you (and
why NOTto ask everybody), how to introduce the
idea ofreferrals early in yourrelationship with cus-
tomers, whento ask for the referral — critical timing —
and how to make an exceptional experience so your
customers have exciting stories to tell. Fletcher and
Kurtalsoestablished the first 3 Rules of a successful
Referral System...
Rule 1: Knowthe customer youare trying to reach.
Rule 2. Knowthevalue you add in customer’s terms.
Rule 3: Create an unusuallypositive experience.
An Interesting and Exciting Story
FP; When youare asking for referrals, your customers
need to beable to tel an interesting and exciting
storyto their friends so that their friends are actu-
ally going to be interested in calling you. And if
you’re just the average business, you do things in
the normal way, what reason would they have for
calling you? Does that make sense?
K: Absolutely — great stuff!
F: So, part of that is the rdationship you're devel-
oping between your Consultants and yourclient
But a big part of that is what you can do to make
the transaction exciting and enjoyable. And
there’s a lot tothat.
In manybusinesses that I know— and probably
in your case, too — the products go to the business
but the person whoordered them is not necessar-
ily the person to open them. Is that correct?
K: Correct.
F: So then if they aren’t the person opening the
package in the first place, you should be asking
yourself, “How can I send something then to the
person who ordered that will make their experi-
ence exceptional?”
And that may be anything from including an
extra something in the package with their name on
it, to alittle gift in the big box that you sent, of to
www.solutionspress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
doing something really outrageous with the big
box toattract their attention.
Youcan even send them a separate package by
normal postifit’s just a letter or a box ofjelly-
beans or whatever youfeel is most appropriate for
your business. Paying particular attention to the
person who madethedecision is the critical fac
tor.
K: Yea!
F: So are you with me on where we are so far?
K: Absolutely, fantastic, yea!
In this consultation transcript, Fletcher Potanin,
publisher of Solutions Press is helping a gentle-
man, Kurt C., to apply Paddi’s referral concept,
system and ideas to his rather conventional busi-
ness.
Kurt runs a mail order safety products com-
pany, and he first heard of Paddi through Jay
Abraham and Mike Basch at an Abraham Sum-
mit. In Kurt’s own words,
Over the last 18 years we have seen our-
selves as following this mission: To provide
products that enhance the well-being, health
and safety of people at work, at home or at
play, around the word and around the clock.
We supply products that protect people
who are food handlers and food processors,
like disposable gloves, hair nets and aprons,
etc. Those same products are sometimes
used in other manufacturing settingslike in
laboratories for people doing research.
In addition, we have a complete line of
first aid products and our full line of safety
products which include hair protection and
safety spectacles, respirators, hard hats,
foot protection and signage, signs and labels
and just about anything else you can think
of in that arena.
Kurt’s businessis definitely more mainstream that
Paddi’s dentistry. This consultation is about Re-
ferral Systemsprimarily, and yet you'll read how
easily and sensibly Paddi’s systems — each in its
turn — fit right into Kurt’s concept ofwhatis pos-
sible and desirable in his business...
1
Part 2 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
Rule 4: Makingit easyto refer
F: Ok, so you’ve defined your customer. You're able
to now articulate the value that you've added to
your service. You’re making an exceptional expe-
rience for them — something that will give them
reason to rave about you. And nowthe next thing
you dois focus on making it easy and in your cli-
ent’s self-interest to tel others about your busi-
ness.
Now, this is a fascinating area. In making it
easy for your customers to talk about you, there
are a couple of things that we've already touched
on. First ofall, remember when we were defining
the customer and defining the value that you can
add to the relationships between your consultants
and your customers? I asked you to consider those
definitions in your customers’ terms. In words
that you could say to your customers so that your
customers would have wordsandinformation that
they couldthenusetotell other people.
So we've alreadygone little bit towardsthat.
In that you have the words and understand the
relationship and the value that you can add on
your customer’s behalf. Nowyou need to provide
your Consultants with the tools that will make it
very easy for them to describe your business to
their customers.
Why Should a Client Refer?
Your consultants need to be able to couch your
services in terms that are benefit oriented to your
customer or the referred person, but they also
need to convey a good reason whyit’s of benefit
to your customersto actually refer their friends.
For your referral system to work successfullyin
perpetuity, your current customers need to receive
some Benefit from referring others.
Nowthe ultimate reward is the gratitude of
yourfriends. I can suggest that when you provide
an exceptional experience, most of your A class
customers are going to want totell others about
you.
Customers are going to feel good when the
people they refer do business with you and then
those customers go out of their wayto thank the
referring customer afterwards. Referred custom-
ers that are so excited that they go back to the
person that told them about your business and
theythank them for the astute recommendation.
That’s really the ideal situation. That a referred
customer is so excited, enjoys dealing with your
business so muchthat they go back to the person
2 Telephone (461-7) 3823 3230
who referred them and say, “How wonderful you
are! Thank you for referring me to this busin
The Ultimate Accolade
Andthat is the ultimate accolade, the ultimate re-
ward for referring someone to a business — the
thanks and gratitude of the person that you've re-
ferred.
So from here, when creating your referral sys-
tem, everything you do revolves around that
whole process. Everything you do revolves
around makingit so that the person who did refer
feels that they did the right thing, that they en-
joyedthe process and theyreceived the accolade
and thanks. That’s critical.
K: Great! Hum, I guess I’ve got two questions.
One is do you offer them a reward? Like in the
past we actually put a price tag on it and said
that we would pay $25 for anybody that
turned out to be a referred customer.
F: Ok.
K: This is the other catalogue so it was kind of
an impersonal process. I’m not sure it was
too terribly effective. I know we got somere-
ferrals but it wasn’t substantial.
F: I would besurprisedif it worked wellat all. In my
experience Kurt, in all the businesses that I’ve
ever worked with that have a successful referral
system, none of them ever offered monetary re-
wardfor referrals to the business.
People don’t like being bribed. Some people
do, but P'd wager that those aren’t the sort of
people who are going to be your ideal clients.
And most people don’t even like the concept of
referrals for that reason.
K: So what do you give these people for refer-
ring?
Your Heartfelt Thanks
F: I don’t mean to be simplistic, but your heartfdt
thanks! Remember, the thing that is going to be
the biggest reward for them is the accolade and
the thanksof their friends. The thing that you
could do for them is the same thing. To actually
say,
“Kurt, the person you referred, Paddi Lund
from Patrick Land Dental Happiness actually did
business with us the other day. He called and we
were able to talk about some important health and
safety issues in his business. We had a great con-
vetsation, and we think we’ve worked out some
Facsimile (+61-7) 3390 3610
 The Kurt C. and Fletcher Potanin Consultation Transcript: Part 2 of 2
wonderful health and safety solutions, not to
mentionsaving him a lot of money.
T just wanted to say thank you for introdudng
Paddito us because I know, Kurt, I know Paddiis
going to be muchbetteroff for it. We’ve explored
or uncovered somereally great things. So thank
you very muchfor referring him. I knowhe’s go-
ing to benefit greatly.”
K: That'd be great!
Its simple and very effective, That’s the sort of
thing your consultants need to convey to A class
customers who refer. You canputit into a noteif
you wantto, but a phonecall would be wonderful.
A phonecall to thank people for referring is very
easy.It’s relatively quick and inexpensive. And if
you’re developing a long-term relationship be-
tween consultants and clients, then using both is
probably the best wayto deliver the message.
Thank-you Cards
A nice thank you card will do wonders, too. And
bythat I don’t mean an impersonal ‘with comps’
slip on your normal stationery. Go buy a few
thousandcards that you can set aside for special
occasions so that when you need to thank some-
bodyfor something, you can doit in an easy, sys-
tematised effective way.
Maybe for when customers do something nice
for you. Maybe they’ve put you on to a new prod-
uct you didn’t know about, and_ particularly,
maybetheyreferred some good A class customers
to your business. Write them a thank-you note!
Mymother brought me up in a way that when
somebody does something nice for you in your
personal life, naturally ... well you'd just write
them a thank-you note, wouldn’t you? That’s what
we normallydo, and wereally enjoy getting thank-
you notes from other people, too. Especially
when theyre heartfelt and they're meaningful.
And so your customers are no different.
K: That's good stuff! So you wouldn't offer them
like a rebate ora discount on their next order
if they referred someone? You would just do it
with a thank-you card or phone call and
maybe a small memento - something that the
company sells or a free pair of sunglasses or
something like that?
Story ofa Successful System
F: Yes, well you coulddo that. In myexperience,the
businesses that have given something away that
have been mostsuccessful have been ...
www.solutionspress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
Tcan think of one business in particular that
created a successful referral system by giving
something away, and in fact they took the idea
from Paddi andreally ran with it in a different
way. This just a great example
This business is a dental practice in Denver,
Colorado. This business started with Paddi’s lead,
they simplystarted asking customersto refer their
friends.
Then following Paddi’s lead again, when a new
customerwasreferred they gave flowers to the re-
ferring people. Nowbecause they knew where the
person was, their address andall that, and because
their clients wereall in the local area, they actually
hadthe flowers delivered to the referring clients’
homes.
Well, once they started giving flowers — and
you know alot of people don’t get flowers often,
so they just love to receive them ... flowers are
just the most delightful gift — when they received
those flowers, people started referring more and
more newcustomers. And so this business got to
a point where they were sending out so many
flowers they dedded to save a little money and
deliver the flowers themselves.
So they hired a junior to drive around after
school one day a week and deliver all of those
flowers. Well, pretty soon he got really busy.
They were getting so many new referrals they
couldn’t keep up with the ddiveries! So they
started sending this kid out full time — just deliv-
ering flowers!
A BrightIdea!
This kid was a creative type, and so one day he
had a prettybright idea. Nowthis business had a
lot of children patients. A lot of children came to
the practice so it was a really childlike environ-
ment —a lot of fun happythings going on.
Well this bright creative high-school student
decided to paint his delivery van in a western
theme. He then dressed himself up in a cowboy
hat, chaps, boots, the whole nine yards. He even
had six shooters on his side! And he began deliv-
ering flowers in his cowboyoutfit and van. And
in big western letters, he painted on theside of his
van the words, ‘Hop-a-long Cavity’!
K: (Chuckles) That's great!
Hop-a-Long Cavity
F: Tell me about it! And so Hop-a-long Cavity would
comedelivering these flowers day after day, and
he just did that on a whim — you know, to have
3
Part 2 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
fun with it. Well it got to a point where all these
kids were coming into the practice asking,
“Where’s Hop-a-long? Where’s Hop-a-long Cav-
ity? We wantto see Hop-a-long Cavity!
Soit was just a huge success. And there was
such a wave of momentum that the whole bus‘
nessstarted dressing in western cowboy and cow-
girl outfits. And because their focus was children
mostly, it just workedbeautifully. So it was kind
oflike a western theme at the OKcorral for the
kids.
K: Wow!
A Simple Bunch of Flowers
F: Anywaythat’s the wayit worked for one business.
Thereferral system and the waythey adaptedit to
their culture just carried them to an entirely differ-
ent level. And nowtheygetall the referrals they
can handle. But they didn’t bribe anybody! All
they did was to thank people with a bunch of
flowers.
I think it comes down to this, Kurt. If you of-
fer people financial reward, or products for refer-
ring, they don’t tend to enjoythe process. But if
you do things as you would normally when some-
one does something really nice for you in your
personallife, then people tendto respond well.
In your personal life when someoneis really
kind to you, well you mightgive them little box
of sweets, or a bunch of flowers, or write them a
nice note, or take them out for dinner somewhere.
Depending on yourrelationship, those are the
sorts of things that a caring individual would do.
And those ate the things you should look for in
rewarding customersfor thereferral.
K: Great idea!
Rule 5: Recognise the referring person
T; And that leads us to the next point of recognising
the referring person in an unusual way. An un-
usual wayis something thatis different to what
people would normally expect but is really per-
sonal and friendly.
Now I’m not going to tell you what’s right or
what’s wrong for your business, but I can tell you
in my experience that more personal things have
worked exceptionally well. And that’s the thank-
you notes, the calls to say thank-you, a bunch of
flowers or a small treat or someother personallit-
tle gift. Because that’s what we would normally do
in our personallives.
4 Telephone (+61-7) 3823 3230
In your business you mayfindthat an extra few
things in someone’s next order may make all the
difference. In other words if someone who has
just referred another calls to order more products
from you, you might thank them on the telephone
for referring their friend and make a point of
sending a card letting them know how kind and
gracious it was of them.
But then you also might add an extra box of
glovesto their orderas just onelittle way of saying
thank-you very muchforreferting somebody.
K: Cool!
A System thatFits with Your Culture
F: You mayfind that system works very well. In my
experience, however something outside of the
core of your business will be far more effective,
far more impactful. Because it shows you have
gone to some troubleto say thanks. But you must
find a system that works for you and that fits with
the culture of your business.
Whatever you do, don’t ever promise that
you're going to send something as a gift! And
never promise a thank-you note on the phone.
Just let it show up to be a delightful unexpected
surprise. Always under-promise and over-deliver.
That wayyou aren't creating expectations, ou’ re
exceeding expectations.
K: Great! Fantastic, and how often can you ask
for those referrals?
How Often Can You Ask?
F: Interesting question. I can’t say in your business.
You'll haveto test to see what works. In the busi-
nesses that I’ve seen so far, people are most im-
pressed usually at the conclusion of their first
pleasurable transaction. When you’ve created an
experience for your best customers thatis just ...
well it’s nothing short of exceptional!
When people are so excited and so impressed
with the difference in dealing with your business
than with others ... that’s the time to ask for the
referral. That’s the time when they’re most ex-
cited.
Nowin your business though, it sounds like
the average client deals with you quite often, quite
frequently and quite regularly. And so it may be a
goodidea for you to ask more than once. Cer-
tainly, you needto ask after their veryfirst trans-
action.
If I were you, I would make a point to call
every A class customer to check that their ship-
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 The Kurt C. and Fletcher Potanin Consultation Transcript: Part 2 of 2
ment hasarrived safely and to their satisfaction.
Because that would be the perfect time for your
consultant to ask that question, “Would you
please refer people who are like yourself and
would be goodclients and refer them to me spe-
cifically?”
So ask when the package has arrived and
they’re most impressed. When they’ve at least had
a chance to open the package,orif it’s dispatched
to a different department, they have received that
little something that you sent them in lieu.
K: So after someone has referred you really
could ask them again in the thank-you call.
“Thanks for referring Paddi. I just wanted to
let you know he was absolutely delighted and
we really enjoyed doing business with him. I
know we're going to save him a lot of money.
By the way, is there anybody else that comes
to mind?”
Can you overdo it?
The‘Friends and Family’ Routine
F: Yes, of course you can, but commonsense will
tell you when youhave. Test different approaches
andlet your customers decide with their referrals.
Onething I would suggest that you don’t dois ...
Tm notquite sure how you’ve donethings in the
past, but there are some businesses that ask their
customersto write down the names and addresses
and phone numbersofthree people who might be
interested in their services. Then that business
writes those three people or cold calls them out of
the blue.
K: Yea...
F: Consumers in my experience don’t like that kind
of referral system. And that process has given
manypeople in the marketplace a bad perception
ofreferrals.
K: Ok. We've done that before.
F: Andhasit worked for you?
K: Hmm, it has but not in a huge volume and
very spotty.
F: In our experience people don’t feel good about
giving out personal information of theirfriends. It
sort of reaps of what is it MCI did in the
United States in the early 1990's? Their ‘Friends
and Family’ marketing programme? “Sign up with
MCI andtell us the details of the people you call
the most and we'll give you a 15%additional dis-
count on thosecalls.” A lot of people didn’t like
that. What they werereally saying was, “Tell us
www.solutionspress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
whoare the 8 or 10 dosest people in yourlife and
then we'll cold call and harass them to join MCI.”
Nobodylikes receiving cold calls and being
sold to. That may not have been MCT’s original
intention, but that certainly was the perception.
Andthat perception of the processofreferrals has
been heightened in public awareness in the last
decadeasit’s become more commonplace.
K: Yea.
Be Careful with the Words You Use
F: And so, we’ve shied away from that completely.
When you’re asking for the referrals, I would
never actually ask, “Do you have anybodyelse in
mind who mightlike what we do?” Because that’s
asking the question ‘give me a name’.
So be very careful in the words that you use
that people don’t feel obligated to give you a name
and a numberstraight away. Because that’s not
what you want.
Now, this comes down to something that we
haven’t touched on: makingit easy to refer others.
Younotice in the back of Paddi Lund’s book,
“Building the Happiness-Centred Business’, that
there are referral cards? Andin those cards it ex-
plains howto buythe book, whereto find it and a
little bit about the bookitsclf?
In most successful referral systems that we’ve
seen, and particularly in Paddi’s, a critical element
—the key to the system’s success — lies in the de-
vice that you give to your dients, the tools that
your clients then give to their friends while ex-
plaining yourstory.
Paddi’s ‘Invitation’ System
Paddi goes to great lengths to makeit easy and
enjoyable for his clients to refer, rather ‘invite’
their friends. It’s rather an exclusive privilege,
really, First, he doesn’t ask everybody to invite
their friends, and clients are told that before they
cometo the practice in the Bargain.
Next Paddi buys a gold card referral cardholder
and hashis client’s name engraved on the front.
Then Paddi places a few gold foiled Invitation
Cards in the holder, each printed in a fine copper-
plate script with the customer’s and their Care
Nurse’s nameonit.
The Care Nursegivesthis holder and cards in a
black velvet pouch to her client at just the right
moment — when the first round of dentistry is
successfully completed and the client is most
happy.
5
Part 2 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
And with the cardholder comes an Extra In-
formation Sheet for their ‘Wdcome Book’titled,
‘Inviting Your Friends to See Us’ which explains
why, and in customer’s terms,it is to their benefit
toinvite their friends to the practice.
And theresults are astounding, Clients love the
process. Andit happens the same wayeverytime,
without fail! The key to that system is the way
Paddi presents his referral tools. They make all
the difference.
A Good Referral Tool Makes It Easy
Because goodreferral tools make it easy. Easy to
refer because your client has something to give
their friend andeasy for the new person because
they have contact information and learn a little
about you. It makesit easy to find you.
K: Could it be something like a postcard with, “If
you know of a friend who would enjoy our
catalogue or more information, please give us
their name and address and sendit back to
us.”
F: Or howaboutyou write the postcardasif it were
from your client to their friend, make it postage
paid, and then ask yourclienttofill in the blanks!
Write a little note to say, “You got to call this
companybecause theydid a great deal for me on
such andsuch andtheir service for such and such
wasjust outstanding. And they werereally helpful
to mein this area.” And instruct your dients to
postit for free to their friends or contacts in other
companies.
K: Great!
F: So, in other words, if you're writing a postcard,
don’t ask your clients to write names and ad-
dresses and send them to you.
K: Oh?
F: Ask them to send the card specifically to their
friend and make sure the card something
about you. Because again, people don’t like to
give names and numbers.
K: Yup.
: So Pd tryand avoid that if Iwere you. A) Because
a
it doesn’t really work but B) because it'll put a
weird feding in your customers’ minds.
K: Oh.
A Personal Recommendation
F: If they’re writing directly to their friend then it’s
simply a personal recommendation that you’ve
6 Telephone (461-7) 3823 3230
helpeda little to create. If it’s simply, “This place
is great! You got tocall this number to get your
stuff...”, well then that’s a bit different.
K: Ok, I see.
F: There’s really nothing better, more powerful than
looking friend in the eye and making a personal
referral. You can ask your clients to do it over the
telephone, or even by mail is ok. But understand,
there’s nothing like the power of doingit face-to-
face,like over a cup ofcoffee or tea.
So tailor your system so that yourclients do it
that wayif you can. Particularly with your A class
customers. You might want to copy some of
Paddi’s system in that regard. Makea little card for
your clients to present which describes how to
find you and whatyou do.
A Referral ‘Postcard’
Bythe way, what we just described — the postcard
idea — mayactually be brilliant referral process
for the rest of your customersif you includeit in
every package that you send out.
K: Sure!
F: That card may go in everything you do, but for
yourclients who are your best customers — the
customers of your Health & Safety Consultants —
you may want to create a system that’s at a level
just a set above the postcards.
You mayactually want to — at just the right
time when you have completed yourfirst pleasur-
able transaction — ask your consultants to send
specific business card sized referral cards that say,
“Myname is Kurt C. I’m a Health & Safety Con-
sultant with American Health andSafety...
K: And myspecial reason for calling you today is
that Bill suggested I give you call...
Sample Card Text
F: Well actually, no. No, here’s where I was coming
from. You might make a card that says something
like,
“Hello my name is Kurt C. ’'m a Health &
Safety Consultant with American Health and
Safety. The person giving youthis card is one of
our best customers, and we have a mther special
relationship.
If he’s giving you this card, it means you may
be the type of person that he feels would enjoy
the veryin-depth, close and personalrelationship
that we have discussing ideas to help alleviate
health andsafety concernsin business.
Facsimile (+61-7) 3390 3610
 The Kurt C. and Fletcher Potanin Consultation Transcript: Part 2 of 2
Please feel free to call me upon the recom-
mendation of the person giving you the card to
discuss those sameissues in your business.”
In other words, the card posi jons your con-
sultants well in this new person’s eyes — not as a
‘sales rep’ but as an advisor with valuable infor-
mation to share.
So you may have little card saying just that
because it then defines therelationship you want
to have with your best customers. Andyou do it
on the front end so that clients expect that and are
attracted to it. You don’t haveto ‘sel? it when
they comeon board.
Give Clients a Vocabulary
Notonlythe card, you need to give your custom-
ers the words to use when describing your busi-
ness and your consultants. Now we’ve already
discussed that in terms of defining your ideal
customer andthe value you addto your products
andservices, but you have to give your customers
the wordsto use.
You need to actually give them the piece of
paper, or instructions, that explains why your
Consultants take people only by referral. Some-
thing that also explains the value of the relation-
ship and what's in it for the customers. Basically,
howit all works.
So there are tools that you will need to create
in terms of education and information forclients.
Now, I think you said that each of your Consult-
ants can handle about 250clients total.
K: Correct.
F: So then the more you can develop that relation-
ship and build it up, the more exclusiveit will be-
come. That means, if there is only room for 250
peopletotal, and theyareall ideal customers, and
your consultants are all very busy with these cus-
tomers, they just can’t take any more on. That
then becomes a rather exclusive relationship your
consultants have with their businesses, and you
can use that to your advantage.
Cycle of Life
Jay Abraham hasa conceptthathecalls the ‘Cycle
of Life’. It describes the time period whena cus-
tomer is pre-disposed to want the products or
services you can offer. Well, let’s say that the cycle
oflife of one of your ideal customers is coming to
a close. Your consultants will probablyrealise that
because the frequency of purchases is dropping
off, or the individual may be moving positions or
www.solutionsp ress.com.au 149 Old Cleveland Road Capalaba Queensland Australia 4157
their companyis headed in a particular direction.
Orin fact, the consultant may have exhaustedall
of the areas in which they can explore health and
safety issues, and it may be to the customers ad-
vantage not to have that same relationship with
the consultant anymore.
Anyway, that customer’slife with you as an A
Class client may be coming to a close. At that
point the Consultant probably knows that this
customeris going to drop off his A Classlist. And
that means with a little experience, he can proba-
bly guess when he’s going to need an extra 2 or 3
moreclients, right?
K: Yup.
F: In which case, he maybe ableto talk to one of his
newcustomers who is very happy with whathe is
doing and say somethinglike, “I actually have one
space coming up next week for a newcustomer. I
don’t ask everybody, but I thought you might like
to invite a friend of yours to be a customer in
consultation with me as youare.”
K: Fantastic!
F: Andin the idealsituation, the Consultants may be
so exclusive that you don’t ask too manypeople.
Butyouask, “You're the best person I could think
of because we’re doing great things for you. I deal
with a numberof clients and I’m very busy, but I
have one space coming up next week. I thought
youmight havea friend who would beinterested
in having the samerelationship that we do?”
K: Great idea!
F: And whentheysayyes, you might then send them
alittle referral kit like Paddi’s. Thislittle kit might
contain a one or two page letter describing the
benefits of your service and of the consultation
process, what your client should say to their
friends, as well as a few little cards that they can
give to their friends that will help them to contact
you and understand what you do.
K: Awesome!
High-end vs Mainstream
F: So that might be an idea. Nowthat’s a very high-
end referral system. It is a referral system that re-
quires a lot of hands-on contact. It'll probably
cost you lot to do andyet if it works well — and I
suspect thatit will —it’s going to be an exception-
ally profitable system for you.
K: Sounds outstanding!
Part 2 of 2: The Kurt C. and Fletcher Potanin Consultation Transcript
F: And yet the other referral system that you talked
about — that postcard — may bethe perfect lever-
agedreferral system for your mainstream B Class
customers whoaren’t quite high-endyet, but are
still profitable and a goodpart of your business.
Tt doesn’t require as much personal contact. It
certainly won't be nearly as effective, and yet it
may be worthwhile to do. Particularly if you call
every one of your customers, when they order
from you the first time to make sure everything
was ok with their order.
You personally wouldn’t make that call. Nei-
ther would your consultants. I suspect you’d
probably find somebodya little less skilled or
qualified to make that call just to make sure the
package arrived. But that is a great time to ask,
“Has everything arrived? Are you happy with it?
Wonderful! There’s a postcard in the box. I was
wondering,if you are happy, wouldyoupleasetell
others whoyouthink would enjoy what we do as
well?”
Asking for the Referral
So, physically asking for the referral is an impor-
tant step. It’s intimidating to some, but with a
good position, effective pre-education, and the
right scripts and tools, it's easy. Most people,
when asked at the right time, will be happy to
oblige you, especially when you have developed a
goodrelationship and a strong bond oftrust be-
tween your consultants and customers. It’s so
mucheasier to refer a friend to a person than to a
business! Andit’s so much easier to share good
stories about people youlike than those you don’t.
Perhaps nowyou're beginning to see, as wall,
howclosely manyof Paddi’s systemsfit together.
You can’t have an effective referral system unless
youhavebuilt a goodrelationship first, unless you
give customers exciting stories to tell, unless you
help customers to enjoytheir expetience with you,
and unless you educate your customers about the
fact that referrals are an important part of your
business. A goodreferral system can fit in per-
fectly with your regular marketing. And the great
thing is, once you’ve created the system, it will
keep workingtirelessly for you — your customers
will be out there telling others about you as long
as you keep asking them andconsistently deliver a
goodservice. Nowthat’s whatI call leverage!
K: Fantastic! All right! Well listen, I want to
thank-you for these great ideas and your time
Fletcher, this has been very helpful. This has
been fantastic!
8 Telephone (461-7) 3823 3230
F: Well, P’'m glad, Kurt. It’s been wonderful talking
with you,andit’s fun to be able to share the ideas.
I hope I’ve given you some concepts that are of
use and are of value.
K: You have. I appreciate it, too. Thanks again!
END: 12:20 pm,6 June, 1998
Capalaba, Queensland, Australia
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