When Do You Create a Board of Advisors

iStock_000005458028XSmallThere comes a time when assembling a group of experts to help grow your business is considered smart leadership and a business best practice. When you reach a stage in your business where you have exhausted the collective internal experience, knowledge and skill to achieve your next phase of growth — create a Board of Advisors.

Every purpose of creating a board will differ for each organization. A business owner may be faced with great opportunity for rapid growth or significant challenges from conquering the next ascent in revenue, market or product expansion. The appropriate time to consider assembling a board is when the business path forward is less clear or cluttered with obstacles that could derail you from achieving your business goals. You have reached that period in your business when their is more “unknown” and you fear what you don’t know.

A Board of Advisors is different from local peer groups, leadership councils, service providers and executive mentors. Your board is a committed team of individuals working on your business. Advisors should have congruent skills that compliment your leadership. As an example, you may find that by adding a distinguished industry expert or technical guru best serves the next phase of your business  Adding market or sales expertise can open new doors, while a finance or legal expert can provide insight to reduce risk.

Experienced executives want to help entrepreneurs, startups and leaders that seek advice to grow their business.  It validates their business “wear and tear”, while providing meaning and value to their experience. The board should round out your executive court, as these advisors are typically not available to hire as full-time employees and can be “unaffordable” for smaller businesses. They also may be those exclusive experts that will always be in a role of advising and never work for a single entity.

The reason you bring experts together as board members is to increase effectiveness and efficiency in decision-making and strategic planning. A board will perform best when there is an exchange of ideas in an organized environment, centered around a single business issue. The board format is designed to solve problems. Each board member brings a different set of experiences, viewpoints and resources. Having a board working together with you to assess challenges and discuss opportunities, gives you invaluable advise that can save you significant time and money versus the “learn as you go” approach.

Board of Advisors are not in a role of governance. They do not have fiduciary responsibility to protect shareholders or investors, though they should be very responsible in providing any guidance related to financials or spending company money. Only an elected Board of Directors for a public corporation or non-profit have governance over a company. The Board of Advisors is a non-binding group of mentors and experts that work collectively with company leadership to achieve your business goals.

Advisors should be completely aligned with your goal and mission and also be able to challenge you by providing recommendations and views that will differ from your own. You do not want a board that agrees with all your ideas or thinks as one. Why waste your time.  They should differ in expertise and have the ability to assess short-term and long-term strategies, out load in a group discussion, without fear of reprisal.

A board is typically five to six members, excluding the CEO or business owner.  A Board of Advisors should consist of experienced and skilled individuals in varied areas where your business is lacking in comparable talent. In the early stage of a business, Board of Advisors are typically unpaid and may or may not have a long-term financial commitment through future equity.  As a business leader, be cautious of giving away ownership in your company early, this could be a note of contention with future financing.

The commitment of an advisor should be a minimum of two years.  It is valuable to set a term limit in reviewing board members, as you company is expected to grow and you need to be able to add new board members with different skills during later stages of your business.  Board members must also be committed to attend meetings.  A small business will typically meet with the entire board every 8-12 weeks.  If a board member misses more than two meetings a year, consider replacing the advisor.

Board members should not be family members, employees, contractors or service providers you pay for other functions in your business. It creates conflict of interests. Though a board of advisors are not employees, you should treat your advisors as accountable members of your C-suite. Set expectations, ask for help and use your board to help you achieve your goals.  If you simply assemble your Board and provide an update report on the business, you are wasting valuable resources and time.

Board of Advisors are trusted members of your inner circle. You can share with them confidential information and discuss highly sensitive matters that are not open for discussion with anyone else in your company. Your board should consist of credible experts that will provide insights you can not gain from any other resource. They should open doors, help you gain new customers or strategic partners and provide actionable ideas to help you achieve success. If you want to grow, create a Board of Advisors.

“You sit at the board and suddenly your heart leaps. Your hand trembles to pick up the piece and move it. But what chess teaches you is that you must sit there calmly and think about whether it’s really a good idea and whether there are other, better ideas.” – Stanley Kubrick

Jamie Glass, President and CMO at Artful Thinkers @jglass8

What is the Real Value in Free

freeFree is zero, nada, zilch, nothing. In the mind of the consumer, free means whatever you give away for free has no cost to you. The same applies to your time. If you are giving away your time for free, how do others adjust to understanding your “real” value? Do they realize your true worth?

Most people are very leery of free offers. Based on experience, we are trained to look for the fine print, the exceptions and qualifications.  Our better judgement tells us that there is usually a “catch” to getting something for free.  A free day at the spa comes with the catch of attending a vacation rental sales pitch. A free juicer included with a top priced refrigerator comes with the catch of spending more on a product just to get a small appliance you may never use. A free soft drink when you buy the big meal comes with the catch you have to super-size your entire meal. If we are always suspect to the catch, how does that reflect on the perception of you giving away your time for free? Maybe there is a catch.

We are all very susceptible to the attraction of a free offer. Free works. We often all like to take advantage of free! Significant purchases are emotional. Free sparks our interest, it draws attraction to possibilities. Free also plays on the strong emotion of fear. The fear of losing out on the free.  Will someone else get our free?

What is not often measured is the “buyer” remorse of a free offer.  Why?  Well, you didn’t pay for your free, how can you be remorseful. You got what you paid for – zero, nada, nothing. You can’t return “nothing”. Your stuck with your free.  The cycle continues, giving and getting for free and then we are left wondering was it worth our time as the giver or receiver. It might be easier to leave the emotions behind and get to the real offer of people paying for your services. Paying for your valuable time without an emotional gimmick.

Free feels like it should have value. We perceive that whatever we get will be of greater value than what we have to give to get it.  It is very difficult in business as a service provider and solopreneur to not give away your time. We often justify this as a “marketing and sales” expense.  Unfortunately, the expense is not something you can list on your expense records as a tax deduction. You can not expense your hourly rate as a cost of sales. It’s lost time or to put in a more feel good term, an investment.

When you give away your time, what you do and who you are is represented as free.  It may appear to be a good idea. If you give your time away regularly others will soon see that your time has no value and what you perceive to be a great gift often goes unused or disregarded. Are you creating the perception that you are “free” for the taking?

The best advice for giving away time for free is to set a specific free time budget.  How many hours can you afford to give away each week?  Also, keep your “power of negotiation” at your central point of where you do business.  Meeting at coffee shops and for lunch may seem like a convenient way to give away your free services; however, you are no longer in a business setting, which demonstrates that your business is the priority. 

We all desire to help others, pay it forward and do good. The best good you can do is to make sure that you get value for what you do. Free is a teaser, a sample. Maybe it is required to build a relationship and establish an opportunity for a transaction.  Then again, maybe if what you give away for free is so valuable people will actually pay you for it. Limiting your exposure and risk, means you have limited availability to always give away your time and services for free. Use your time wisely.

If you were to offer a thirsty man all wisdom, you would not please him more than if you gave him a drink.” — Sophocles

Jamie Glass, President and CMO at Artful Thinkers @jglass8

Sales Referral Partners Lead to New Customers

Coins and plant, isolated on white backgroundUsing partnerships to grow your business is smart business. Partnering drives market awareness, aligns your brand with other credible brands, opens doors to new customers and can even provide value-added products and services to increase your average sale.

There are different types of partners, which are defined by the level of engagement and the agreements each party enters into to manage the relationship. Sales Referral Partners are the entry level of business development partnerships. This type of partnership has little accountability and responsibility for performance. The value of this strategy is often used to grow market credibility or to align with a partner that has strong relationships with your prospective customers.

Entering into a partnership for referrals is a first step to test the waters in a relationship. It allows both entities to measure the commitment, willingness and effort required in working together to develop business. A sales referral partnership gives you the ability to determine if this is simply a PR initiative or will actually grow revenues. You can also monitor the organizational support in sales and marketing required to get deals closed.

The relationship can be a one-way lead pass or a two-way referral agreement. Both parties need to determine the best opportunity to refer business by passing on leads, receiving referrals or both.

Sales Referral Partners can be “handshake” in nature if you do not plan to hold anyone accountable for the outcome. It is commonplace for business service professionals who network together to develop non-binding relationships to help open doors and extend value by making credible introductions to other service providers or their respective clients.

If you plan to use compensation as an incentive to drive referrals you need a legal agreement, signed and executed between both entities. Compensation is a way to show appreciation for the referral and is an incentive to work together. If your partner offers to pay you for referrals, you also want to make sure it is in writing.

There are two ways you can determine the referral compensation.  Referrals can be compensated at the same rate as your sales commission.  For example, you can offer a set figure between 5-10% of the net proceeds of any closed deal.  You can also set the commission rate at the percentage of your average marketing spend to acquire a new customer. No matter the rate chosen, it should be perceived by your partner as rewarding and drive the expected behavior. Make it worthwhile for someone to act as your front-line sales person and help find you new customers. If the rate is not worthy of the effort, you can expect to pay few or no commissions, as you will likely not drive the behaviors needed to get a referral.

If you do choose to enter into a binding agreement that includes compensation for referrals, you need to set rules just as you do for your own employees. Specifically outline in your agreement how payments will be made and when the partner will be paid. For example, will you pay when the sale is made or when you are paid by the new customer? Be sure you state in your referral agreements if the referral fee will be paid over the lifetime of the relationship or for only the first sale.

It is critical that you track all your sales referrals, whether you enter into a formal agreement or simply take an email of a lead pass from a trusted business partner in your network. Enter the lead into your CRM with the proper tag to identify who gave you the lead. Enter when you receive the lead and monitor the progress of the lead as it moves through your sales pipeline. Measure all your partners quarterly to see how they are helping you grow revenues. It will provide you intelligence in how to manage the relationship for maximum profitability.

If you do enter into a sales partnership where the other entity is representing you on the front-line, you need to equip your partner with the same tools and resources you provide to your own sales team. You need to give them the ability to introduce you, what you do, the problems you solve and the value proposition of your products and services. Spend time providing regular updates about your business and services to keep your partners informed and engaged.

Top of mind awareness in this type of partnership is essential to getting value from your relationship. When you provide value, you will get value in return.  A partnership requires efforts by the giver and the receiver. Be persistent in developing good partnerships, measure activities and reward the efforts of those that help grow your business.

“Try not to become a person of success, but rather to become a person of value.”
– Albert Einstein

Other types of partnerships that will be discussed in future posts include Co-Selling Partners, Channel Partners, Strategic Partners and Investment Partners.

Jamie Glass, Founder, President and CMO of Artful Thinkers

Ready to Engage Your New Customer?

The buzz in marketing circles today is engagement. How do you effectively hook potential customers into a committed relationship? The investment a business makes in the engagement process should be directly tied to revenues. If you expertly and skillfully engage, sales will increase.

Competent engagement helps a business target, influence, nurture and convert prospects to customers.  The more expeditious a business is in engaging with prospects, the bigger impact to the bottom-line.  How are you engaging your potential new customers?

The easiest way to initiate engagement is to view customer and wedding engagements as the same.  The difference between the two are in the details of tactics.  How you move from targeting into proposal are nearly identical in overall strategy.

Engagement begins by determining how to get someone to respond to your offer.  First, identify the target based on the qualifications of a “good match”.  Who is a suitable candidate for engagement?  What are the qualities you are seeking, both in demographics and social behaviors? Then you need to determine what makes you attractive to others.  Packaging and presentation of your “stand out” qualities are critical in the initial step of the engagement process.  Know where to direct your message and selling to the most qualified targets.

Second, you start the courting process, where all long-term valuable relationships begin. This step is more difficult to measure and needs careful preparation. You can spend a tremendous amount of resources influencing others and never get to the proposal. Laws of attraction and suitability apply.  Who you target, what you say and why they are a good candidate must already be known to successfully influence the “right” prospect.

Using engagement tactics like research, focus groups, asking for referrals can speed progress directly influencing better qualified prospects when cultivating relationships. Put out a few “asks”.  Look for agreement.  Identify the buying signals.  Know what makes this prospect want to engage further in the relationship.  Define what is in it for them. It might take some sampling and analysis to reach a successful outcome.

Third, define acceptable terms of the relationship.  Nurture your relationship to fully understand the “how and why” you need to partner.  Build upon the strengths of your bond through mutual consent. Constant communication, validation and envisioning the success of your relationship solidifies the “why”.  This is the beginning of a potentially long-term committed relationship, one that must be mutually beneficial.   Are you both in agreement? Create timelines and set expectations to help control spending, time and resources while nurturing your relationship.

Fourth, make the BIG proposal.  It is time to go all in and ask for the close.  Whether it be a hand in marriage or to partner in business, the only way to get to a “yes” is to make the proposal.  If you have taken time to go through an engagement process, building consensus along the way, you will have eliminated most of the risk in making the proposal.  Converting a prospect to a buyer requires you to “pop” the question.  It is time to seal the deal.

The opportunity to engage is there, are you ready to start the process?  Only if you are able to commit to an engagement, will you be ready to “tie the knot” with a new customer.

[W]hen you realize you want to spend the rest of your life with somebody, you want the rest of your life to start as soon as possible.  ~Nora Ephron, When Harry Met Sally

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

Best Networkers Go Where Others Won’t Go

Yesterday I met with a successful executive coach who is starting to explore opportunities of expanding her business. She was sent to me by a trusted colleague and notable networking expert.  The typical goal of these meetings are to learn about our respective businesses and then make introductions or provide advice on how to reach new clients.  It’s the life of an independent business owner and consultant.

One of the questions I always ask people looking to develop more business is “who owns your customer?”. Often there is pause. Yes, I want to know who owns the relationship with your customer, not who is your customer. The reason I ask this question is to identify the strongest influencers of those potential new customers.  In my experience, it is the shortest path to multiple buyers.

An influencer provides reach and accelerates your ability to grow market share.  Research suggests that we “buy” when we are influenced by someone we trust.  In fact, ninety percent of consumers surveyed in a 2009 Nielsen Survey said they trust recommendations from people they know.

This is not only applicable in retail situations or online recommendations, but also in business services as well. The business community often gives their business to those that come through their trusted network of peers or with whom they have a past relationship. Why? It eliminates the vetting and testing. In the old fashioned sales vernacular, it saves time and money.

Here are a few recommended steps to reaching your influencer:

1.  Identify your influencer, ask yourself who “owns” your customer.

2.  Research your influencer.  Where do they meet?  Who is in their network?  Who are their customers?  What events do they attend?  What association and industry groups do they belong to?

3.  Start following. Not literally stalking of course, but follow companies and connections in LinkedIn, through social media channels like Twitter, Facebook Fan Pages and Google+.  What are they talking about?

4.  Go to events where they gather and start building your circle of influence.

The biggest mistake I see others make in networking to find business is they go to where their friends and competitors go. For example, I am probably less likely to get business at another marketing event, as opposed to hanging out at a physicians conference or speaking at a non-profit event about advisory boards. My competitors do not go to these events, or at least very few do. I get more time to interact.  I can learn more about their needs in a particular industry or market vertical.  More importantly, I can start to build a network of influencers face-to-face.

How do I get those in the room that have nothing in common with me enter into a trusted relationship? I start by listening.  I then offer to make introductions to my trusted network, when there is a good match. I share my knowledge to see where we have similar business interests, like expanding markets, growing revenues.  Sometimes I offer to participate in events as a speaker on mutually defined topics of interest. Finally, I look for ways I can help them achieve their business goals and give them a “sample” of what I have to offer at no charge.

The saying, nothing ventured nothing gained seems to work well in the world of networking for business.  Sole proprietors and consultants have little time to work on their business, as they are the business.  You need to be your own best PR agent and maximize your limited selling time effectively. If you are competing for air time in a room of people that look and talk just like you, that is an educational or skill expanding event. Learn about your craft and further your expertise.  Don’t expect to get customers at these events.

When you want to network for business, go where you expect to see the least amount of your competition. The fewer people that are “talking just like you” that are in the room, the better chance you have to find business. You also create more awareness about your services because you are not a peer. You have more “meme” time. That will drive curiosity, and that opens a door to “sell yourself”.

Venture Out and Be DifferentNetworking is a skill.  Before you say no or turn away from the idea of going to a meeting or speaking at an event of complete strangers, realize that this is where business starts.  Venture out.  Be different. Go where others won’t go.