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How Positive Thinking Can Kill Your Business

By Steve Houston

EnronYou may remember Kenneth Lay, former chairman and CEO of Enron, the high-flying energy trading company that crashed and burned back in late 2001. 

That epic meltdown caused billions of dollars of investors’ money to disappear literally overnight and threw thousands of employees out on the street.  It led to the demise of the venerable 89 year-old accounting firm Arthur Andersen.  It also sent a serious shiver through our national economy just when it was trying to shake off the recession caused by the recent implosion.

Lay was famous during the glory days of Enron for being a fervent practitioner of the power of positive thinking ala Dr. Norman Vincent Peale, the leader of the positive thinking movement.  There was no problem so critical, no situation so dire that Ken couldn’t find the silver lining in it.

What he didn’t understand, though, was that no amount of positive (or wishful) thinking on his part could make all those questionable business decisions and illegal accounting practices sustainable for long.

Too many people today fall victim to the same siren song of the “power” of positive thinking.  Local bookstore shelves are crammed full with “feel good” books claiming that successful can be yours if you only dwell on positive thoughts and maintain a positive outlook.

Listen, I personally  believe in positive thinking.  Being positive is good for a number of reasons.  A positive attitude can provide much-needed encouragement.  Positive reinforcement is something we all need from time to time.  From a physiological standpoint, a positive frame of mind can even help release beneficial hormones called endorphins that lower blood pressure and act as natural painkillers.

The problem, though, is that an unwavering cheery outlook can prevent you from clearly seeing the truth.  Lay’s insistence on spinning everything in a positive light blinded him to the problems plaguing his company. 

In the end, his unfailing optimism became his undoing as reality finally outran optimism.  Convicted of conspiracy to commit securities and wire fraud in 2006, he died before he could be sentenced.

It’s a sad story but I think an instructive one.  We business owners and entrepreneurs can be particularly susceptible to the hucksters and con artists out there who prey on our sometimes starry-eyed optimism.  Even we can be our own worst enemies at times.

If you want your business to not only survive but thrive, here are some common-sense precautions you can take to prepare for the adversity that always lurks on our horizons:

  • Assume your best current source for new customers / clients / patients dries up and disappears without notice.  Take steps now to diversify your income streams and eliminate this fatal single point of failure.
  • Assume your customer’s / client’s / patient’s buying cycle is going to get longer, not shorter. Find creative ways to shorten it and make it frictionless for them to choose you to do business with.
  • Assume your top 3 business plans will fail, and have Plans D, E & F ready to implement at a moment’s notice.
  • Assume that a large unbudgeted capital expenditure, financial setback or legal challenge will unexpectedly pop up.
  • Assume that your operating cash flow will ebb more than flow and build in safeguards to keep the lights on and the employees paid.

Stop viewing sales and marketing expenses as a drain on your budget and focus on strategies that actually return a positive ROI.  View them instead as important investments a growing company must make.

Once you’ve anticipated these possibilities and made plans to handle them, only then can you feel comfortable looking forward, with true optimism, to achieving great success. 

How To Boost New Client Referral Rates For Your Business

Use this simple system to boost new customer referral rates and watch your business take off!by Steve Houston

Do you know how many referrals per client you averaged over the last 12 months?

This is a really important number to know, but if you’re like most business owners or marketing executives, you have no earthly idea what it is.

Referrals are the lifeblood of many companies, so simply relying on whatever referrals happen to come your way is a haphazard and dangerous way to do business. You need an easy, manageable and repeatable process to help you get more referrals for your business.

One of the best sources for referrals is also one the most frequently overlooked, and it’s this –

If you want to continue attracting new customers, the fastest way to do it is to get each of your current or recent customers to give you a new referral.

Not only can this quickly boost your business but…

  • It can also help reduce your marketing expenses because referrals are free.
  • Referred prospects convert more easily because they’re coming to you from a source they already trust. They are motivated buyers and will frequently have a lower price resistance than others attracted to you through other methods.
  • A new referral client is more apt to refer new prospects to you than clients obtained through other types of marketing, so multiple referrals are not uncommon.

Want to boost your referral rate?  Remember these 2 things: Measure and Hold Yourself Accountable.

Measuring involves 2 statistics: the first is overall referrals expressed as a percentage of new monthly business, and the second statistic is the average number of referrals per client / customer / patient. You want to continue “averaging up” both of these.

You and your staff should review these 2 metrics regularly because they’re key performance benchmarks with a direct impact on your sales revenue.

Holding yourself and your staff accountable for actively and consistently generating referrals is the second key ingredient. Ask yourself:

  • Who have I spoken with today? Were any of those good opportunities to chat about referrals?
  • How many of today’s customers did I actually ask for referrals?
  • How else have I furthered my referral goals today?

Here’s why incorporating this thinking into your daily business activities is so important –

When you measure something, performance improves automatically, and performance inevitably tails off in the absence of quantifiable feedback. Just ask any pro athlete. However, when you do measure and hold people accountable, stability follows and, naturally, so do performance improvements.

In business, you must know your key metrics. You can’t effectively manage what you don’t measure, so here’s a simple method to help you achieve your “offline” referral goals.

Let’s assume you’re currently averaging 1 new referral for every ten times you actually speak to a client or patient about referrals. And you’ve set a goal to get ten referrals in the first half of the month. How many clients / customers / patients do you need to talk to?

You’ll need to talk to 100 people. Divide 100 by 15 (the # of days in the first half of the month) and you’ll get 7 discussions per day. Break this down even further and now your goal is to have 1 referral discussion per work hour each day.

Keep track, and when you find yourself regularly chatting with a client / customer / patient about referrals each of those hours, you’ll hit your target. Forget to do it one hour? No problem – just double up the next hour. It’s all about getting in the habit of doing it consistently.

It’s not complicated and it works. Set your staff’s and your own goals using a similar formula and process and watch your new client / customer / patient referral rates soar.

Bottom line: Simply holding yourself and your staff accountable for generating referrals – and measuring the results – can literally explode those new client referral rates your business depends on so heavily today.