Question

Week 7 Discussion

"The Necessity of building and Managing Innovation Networks" Please respond to the following:

Describe three methods of building a formal network and then discuss the benefits of each strategy. Next, discuss the formal network strategy you would utilize for your business model and explain the implications of this decision. Provide examples to support your rationale.

Discuss how you could utilize formal network structures to develop new products and services for an organization Next, evaluate two success factors that would contribute to the success of your new product development strategy. Provide support for your response.

Answer 1

Business development strategies and tactics have changed dramatically in the past decade. The telephone is nearly obsolete for making an initial contact with a potential customer, as is postal mail. Cold calling? Forget it. If you are unknown, you won’t get past caller ID. Unsolicited e-mail? You’ll be blocked as a spammer.

Today, successful business development is contingent upon building trusted relationships and leveraging those relationships to meet new prospects. These relationships form the backbone of your business network. It is vital that you continuously grow and nurture these relationships, as a large percentage of your business growth will come from your business network.

Here are three ways to build and leverage your business network to grow your business.

1. Always Seek Referrals
Your customers almost certainly know colleagues like themselves who need your product or service. It is perfectly acceptable to ask them for a referral and request permission to use their name for an introduction. With a referred contact in hand and a trusted customer as back up, you can then make your telephone call or send an email to gain an introduction. Once your prospect hears or sees the name of his or her colleague, you will have a much greater chance of success in your introductory contact.

2. Use Testimonials
Your customers are your most important advocates. Ask them if they would be willing to provide a testimonial about your product or service. They most likely will agree because they want you and your business to succeed, particularly because it reinforces their decision to use your product or service. The testimonial may be a simple quote or a longer case study that demonstrates how your product or service solved their problem. Once you’ve secured the testimonial, you need to find vehicles to publish it. It should be posted on your website. You should also search and identify publications or sites that would be interested in publishing the case study.

3. Be Social
Grow your business network by using social media sites and apps, such as LinkedIn, Twitter, and online networking communities. However, before you jump into social media, you need to fully understand the medium, how it works, and how you can use it to benefit your business. LinkedIn is a great place to start and grow your business network. Twitter is a microblogging site that will complement your blog.

Using a combination of tried-and-true business development tactics along with new social media strategies, your business network will grow, as will your company.

Here are seven steps to getting more and better referrals, and raising your net promoter score:

Step 1 – Create a referral-generation plan: Referrals are not automatic. Some “just happen,” but most occur because you do something to trigger it. Some business owners assume that a great product or terrific customer service will generate referrals by default. Not so. You have to learn to ask, and make sure employees are on board as well. Most customers are open to being asked for referrals. Some even appreciate the opportunity to tell friends, family and associates about something good they’ve discovered.

Referral tip: The worst time to ask for a referral is at the cash register or when you present a bill. Look for opportunities earlier or later in the process when customers are more receptive.

Step 2 – Provide support: Don’t ask customers to recommend you to others without offering them some backup. It can be as simple as a supply of your business cards, or a link to a special page on your website. Or it could be a brochure, your latest newsletter or some other type of printed material that describes what you do and can reinforce the referral.

Step 3 – Offer incentives: But incentives can be tricky. The type of incentive you offer must fit with the kind of business you run. It could be a discount, service credits, an upgrade, a free item or some other trigger that will entice clients to provide referrals. Don’t be afraid to test offers to find out what works best. Communicate details of your referral program to your best customers through whatever means you have available, including a blog, newsletter, email or customer mailings. And be sure to thank customers when they make referrals.

Step 4 – Ask for the right information: Getting a name and number isn’t really a referral at all. It’s just a lead. Use a referral form, checklist or web-based system to capture details that will make the referral more valuable. The best referrals are where a customer actually facilitates a meeting, visit or purchase by the referred person, in person, by email or otherwise. This makes the customer an active agent on your behalf.

Step 5 – Target your most influential customers: Seek referrals first from your most influential customers, especially if your resources are limited. These might not actually be your best customers, but they are the people whose opinions would carry the most weight with others in your industry, community or customer base. By targeting these customers, you have a highly focused effort with a good chance to generate the highest quality referrals.

Step 6 – Target related businesses: The health care profession is one of the most adept at fostering referrals between complementary disciplines – specialists, imaging services, physical therapists, medical equipment suppliers and others. Consider the same strategy yourself. Contact businesses that provide complementary services to your own and ask for referrals.

Step 7 – Build your relationships: This takes time, but it’s critical because many of your most influential customers won’t provide referrals until you gain their complete trust. You’ll want to treat each customer contact as if it’s critical to your next referral. Through each sales, marketing or customer service “touch” you are building a foundation of trust that that will one day lead to a valuable referral.

Once you have started to work on setting up your referral program, you need to spend some time educating your team and preparing them for the launch of your new program. One of the primary reasons that referral programs fail is that staff are not properly trained on what the referral program is, how to promote it to customers, and what the benefits are to both the customer and your company. Everyone at your company should be involved in the discussion, but you should spend the most time talking to the following departments:

• Sales: If you have a sales team, make sure to arm them with all the information they need to answer questions and promote the new program when they’re talking to potential and existing customers. Your customers won’t inherently know about the referral program once it launches, so it’s up to your sales team to bring it up at the end of conversations or after a successful sale.
• Customer Care: Newly launched referral programs often result in a lot of questions from existing customers who want to learn how to take advantage of the offers and receive the rewards you are promoting. As such, it’s important to bring your care team up to speed and help them craft the right answers to send to customers when they reach out wanting more information.
• Marketing: You’ll need to work closely with your marketing team to design a launch plan that can be initiated as soon as your new program goes live. This may involve making updates to your website and product pages, incorporating new emails into your lifecycle marketing drip sequence, adding messages to your transactional emails, writing blog posts, and sharing the news on social media. You’ll also want to work with marketing to develop an ongoing plan for promoting your new program month-to-month. For many companies, marketing also has the responsibility of tracking data, evaluating performance, and optimizing the program based on results over time.