Be Ready with References

It’s reasonable to expect prospects to ask for references when they’re thinking seriously about choosing your company. You may not be looking forward to that time since (a slightly important detail) you don’t have any customers yet from which to collect references. At that point, you have three choices:

1. You can begin crying uncontrollably and hang up the phone.
2. You can say, “Sorry. We don’t have any references, yet. You’ll just have to trust me.”
3. You can provide references.

Unless you just recently fell off the turnip truck, you must have come into contact with another human being at some point in your professional life. Let’s hope you’ve even had a relationship with someone who thinks favorably of you. Remember, people are buying you as much as they are buying the thing you’re selling. Since you’ll be developing and tweaking your product or service on the run, particularly in the early stages of your business, you’ll have to convince prospects to believe in you in other ways. Therefore, line up former associates who can say good things about YOU, since you’re the most important part of the equation anyway. Possibilities for positive references: investors, suppliers, patent attorneys, etc.

“As you know,” you can tell the prospect, “we are new. Therefore, any references I give you related to this company would give you limited insight. However, I have three customers from my last employer who are happy to talk to you.”

If your new business is in any way similar to your previous occupation, your old customers should be fantastic references. Even better, they should also be fantastic prospects that would take care of the reference challenge by itself. Don’t just think of “customers” in the traditional sense. You can also find solid references in internal customers—fellow employees or senior managers to whom you provided deliverables at a previous job.

Line up your references before anyone asks you for them so you don’t have to scramble to arrange them at the last minute. And just as if you were interviewing for a job, which you are, don’t provide the names of anyone who hasn’t already agreed wholeheartedly to say good things about you. That said, there is no need for wailing and gnashing of teeth over references. In my experience, well fewer than half of prospects ask for references anyway. And if they do, they may never call them. Just seeing the names may be enough.

Note: Once you have them, you will work very hard to keep your customers happy. In turn, you’ll build a good list of customers who will be eager to speak on your behalf. But I recommend never providing any references unless the prospect asks. It can unnecessarily slow down the sales cycle if the prospect takes time to check all the references.

Don't just sit there

Like a pot of water that you want to boil, a phone that’s stared at will not ring.

Unless you start your company knowing that you already have a customer waiting for you, you will have to generate some leads someplace. It's better to pick your first prospects rather than wait for them to pick you. Here are two good reasons:

1. Even if you think differently, you may not be quite ready for them when your prospects think they’re ready for you. If someone calls you on the phone to inquire about the doodad you want to sell, they probably have something specific in mind. Their vision of a doodad may be quite unlike the doodad you have. You don't yet offer all the bells and whistles they’re looking for. Do not hang up on them, though. You should listen to them to develop a better picture of what the marketplace is seeking. You could use those early callers to hone your message.
   
2. If you initiate the sales call, you'll be less likely to be compared to your competition. Because you are calling them, they may not even realize they have a need, let alone that you offer a solution. (Unless you are selling toilet paper, most people do not buy what you are selling so much because they need it but because they want it.) Therefore, when you initiate the conversation, the prospect is unlikely to be sitting at her desk with a spreadsheet that lists all the plusses and minuses of your service compared to the competition. She may not even be able to identify the competition. As a result, your size and newness is less likely to be a concern. As far as the prospect knows, based on how you present your message, you are the standard in your business, even though your company is only about five minutes old.