Author: natalkafalcomer

The legal marijuana business is booming. And landlords are taking notice. It makes sense: these tenants will have solid cash flow and they’ll be able to pay a premium rent. Too good to be true? Of course it is! Unless, the following critical steps are taken to avoid risk.

Important: Before You Start

Before you – or your landlord client – even entertain an Offer, it’s imperative that you ask your client to first get confirmation (in writing!) from her lender and insurer that:

1. any damages or losses arising out of having a tenant in the marijuana business is covered by her insurance policy; and
2. the nature of the tenant’s business will not affect her insurance or lending terms.

If the landlord gets written confirmation, then and only then should you start talking about the lease terms. If you don’t, you risk any or all of the following:

1. lost time as the deal could never happen;
2. causing your client significant legal and financial hardship;
3. your reputation; or
4. a lawsuit for professional negligence.

Some of the Clauses You Must Address

a) Permitted Use

Precision is key. Stating that the tenant can only use the space for “lawful uses” related to cannabis is not enough. As laws around the marijuana business changes, you may be exposed to lawful uses you never intended or wanted! Examples include, cultivating marijuana, dispensing or even smoking marijuana on your property.

The solution: state that the landlord is leasing the space to a marijuana business and then itemize the related activities the tenant may conduct on the premises. Some examples include:

1. Sale of the following prescription products to eligible persons: dried marijuana, fresh marijuana and cannabis oil.
2. Sale of recreational marijuana (if permitted in the province);
3. Growing and harvesting (enumerate the number of plants permitted); and
4. Treatment and processing of marijuana and permitted related.

Next, explicitly state what isn’t a permitted use (be sure to use the language of “such as, but not limited to…”). For instance, some landlords don’t want tenants or clients to use marijuana or cannabis on or near the premises or building, regardless if such use is ingested, snorted or smoked.

b) Covenant to Comply with All Laws

While boilerplate language is useful to ensure compliance with building code and disability access laws, it doesn’t cover all of the legal dynamics of marijuana leasing. For example, there are local, provincial and federal laws regulating security, licensing, programming, zoning and even building rules.

The solution is simple: make the language as broad as possible, requiring that the tenant comply with all federal, provincial and local laws and licensing, as it relates to the physical use of the property (i.e. zoning, noise, etc), as well as the tenant’s business. Ensuring that your tenant is compliant with all of these laws is critical, as you don’t want to be responsible for an unlicensed dispensary or a police raid!

c) Owner’s Early Termination Rights

The status of the marijuana industry is still grey – many dispensaries popping up in urban areas do not have the required licensing in place. This means that the landlord is exposed to the following risks:

1. Criminal prosecution for conspiracy to sell, produce, or transport an illegal drug;
2. Seizure of the building/property under federal laws providing for forfeiture of assets by those involved in drug trafficking;
3. Getting hit with a “nuisance” claim for the smoke, odours, loiterers, or other unsavoury aspects of the marijuana tenant’s use;
4. Bank foreclosure: claims that landlord defaulted on her mortgage by leasing to an illegal marijuana business;
5. Actions by other owners or tenants of the commercial property for alleged violations of restricted covenants (for example, a covenant to lease only to “first class” business operations); and/or
6. Tenant mutiny and protesting neighbours concerned about the tenant negatively impacting the community.

Managing – not eliminating – these risks can be done by adding in an Early Termination right. Essentially, this right allows the landlord to terminate the lease if any of the events listed above may occur or are threatened to occur. Ensure that you list any event that may impact the landlord negatively. Do not state that these events “must” occur for the landlord’s termination right to kick in; rather that it may or there’s a threat that the event may occur (why wait until the problem exists?).

d) Landlord’s Inspection Rights

The security rules around the marijuana industry are aggressive and may limit the landlord’s right to inspect the premises. It’s reasonable for the landlord to agree to a procedure to inspect the property without causing the tenant to be in breach of any regulatory requirements and, if the landlord must access “sensitive areas”, then he can do so only while accompanied with a tenant representative. The landlord, however, should not give up its rights to take photos or videos during inspections and the tenant should be charged for any additional expenses incurred by the landlord for carrying out such inspections.

e) Indemnities

The marijuana business has the reputation of being run by “shady” characters. Typically, an indemnity is a good method to protect the landlord from a “shell” tenant. However, the indemnifier in this scenario may be unable to fulfill the obligations under the lease (i.e. pay rent!). The solution: require that the tenant obtain a letter of credit. If the company is legitimate, secure and has the “approval” of the bank, the tenant is a better gamble and the landlord can manage its risk.

f) Liability

Clearly allocate any and all responsibility and liability related to the business to the tenant, regardless of whether or not the landlord has acted negligently. A strong “one way” indemnity clause and no liability clause is required and your client is wise to get legal advice on the terminology.

g) Additional Costs

If the has to police the site or add extra security measures, ensure that these costs are being charged back to the tenant.

h) Self-Help Rights

Giving the landlord strong self-help rights is critical to ensuring that tenant mutinies are avoided, as well as any legal risks listed above. Self-help rights may be to monitor, control, inspect, call the police, hire security, enter the premises etc.

As this article demonstrates, the biggest mistake landlords and agents make is solely focusing on the rent. In order to capitalize on the burgeoning marijuana industry, landlords and tenants should start to turn their minds to the “how” of working together and minimize risk with thoughtful planning.

The Law May Not be Fair, But it Does Hate Takers

The common rule is that you must be ruthless during negotiations to succeed. This belief couldn’t be farther from the truth; not only will you destroy your relationships, but you’ll also fail to have a legally enforceable deal.

Do You Have a Deal?

You’ve signed a contract with your client to represent him for the sale of his building. The agreement states that you’ll be paid a 2% commission upon sale of the building. You begin working and marketing the building. Given your close interaction with your client, you become good friends.

During one of your dinner meetings your client offers you an extra 0.5% increase in your commission fee, “just because”. Your cousin – who’s a lawyer – tells you to get this in writing. Your client happily modifies the agreement and within a year you sell the building. When you get your cheque, however, doesn’t reflect the promised 0.5% increase in your commission rate. Can you sue for the 0.5% outstanding?

There’s no such thing as a free lunch

For those who guessed “Yes”, you’re wrong. The basic elements that make up a binding contract are: offer, acceptance and consideration. The missing element in the above scenario is consideration. And this doesn’t refer to being nice.

What is Consideration?

It’s generally understood that we make business contracts to exchange goods or services for a variety forms of payment. After all, apart from helping friends and family or giving gifts during the holiday season, profits are gained because we do not give up something of value for nothing in return. This is why courts created the concept of consideration, a concept which requires both parties to give up something.

What Happens if There’s No Consideration?

If there’s no consideration, a contract can be invalid. This is true despite the fact that you get the other party to agree to something and you put in writing. In our example, you and your client already committed in writing to sell the property for a particular fee. You gave your time and effort and your client gave up his money in exchange. Consideration was passed. However, when your client offered you a higher rate, you gave nothing up in return.

How Can I Avoid the Consideration Problem?

To make the renegotiated fee enforceable, you should have offered something nominal in exchange. For example, you could have offered to increase your marketing budget or promised to close the deal ahead of the expected schedule.

Consideration doesn’t have to be of equal value to the concession being given – even changing the font in all of your marketing materials or baking cookies would have been sufficient to meet the consideration criteria.

Should You Renegotiate an Existing Deal?

Renegotiating existing deals is a common practise and an excellent negotiating tactic. This tactic, however, should only be used with a counterpart you trust and with whom you have a great relationship. The reason why renegotiating a deal is a good negotiation tactic is because we typically don’t reach our fullest potential before we stop negotiating.

A variety of Kellogg studies conclude that we leave about 25% of “value” on the table. By reopening the conversation after you’ve signed a binding deal and asking how you both can do better (not just how you can do better!), you not only allow both sides to get a better outcome, but you also ensure that the consideration rule is met. In other words, you both make an exchange to achieve a better outcome.

I’ve seen this renegotiation technique successfully used by one of my students in the negotiation course I teach at the Real Estate Institute of Canada. Both parties made concessions to get a better outcome and both walked out forging a better deal and relationship. Not only did they both “make” more, their mutual willingness to make concessions ensured enforceability.

The golden rule is simple: make sure you give first and receive. If you fail to do this, you’ll not only come off as Scrooge, but you’ll also fail to have a binding agreement.

For years I’ve wanted to bleach my hair blonde. I never did, however, because I feared that blonde hair would unfairly labelled me as a dumb helpless woman. I feared this until I realized: being dumb and helpless is great. Because it works during negotiations. Even for guys.

Weird Tactics to a Successful Negotiation

Chris Voss, author of  Never Split The Difference, was the FBI’s lead international hostage negotiator. He’s known for unconventional tactics such as acting dumb (see below for more), agreeing with character accusations (just take it and apologise, even if you come off as weak!), never splitting the difference and never being direct (you’ll come off as rude, even if you’re trying to be honest).

Although his negotiation heuristics are not the norm, they work. Very, very well. This is because his rules play upon many of Cialdini’s psychological triggers. These triggers are deeply imbedded in the way we behave. For example, most people lower their guard when they don’t feel threatened or if they “like” and feel understood by their counterpart. This is exactly, as Voss alludes to, why acting dumb is smart.

Act Dumb to Create a Non-Threatening Environment

People don’t feel threatened by those who appear less intelligent than themselves. In fact, if you’re perceived as helpless and weaker, your counterpart is more likely to impart information on you or start negotiating against themselves (i.e. making concessions before you ask). They do this to fill the air, out of pity or because they feel like they’ve already “won” and should throw you some scraps.

Leverage this psychological “tick” to not only get information but to avoid pressure tactics, evade angering your counterpart with blunt responses and restarting stalled negotiations.

The best way to get the most out of playing dumb is asking “how am I supposed to do that?” Voss explains:

Calibrated “How” questions are a surefire way to keep negotiations going. They put pressure on your counterpart to come up with answers, and to contemplate your problems when making their demands… The trick to “How” questions is that, correctly used, they are gentle and graceful ways to say “No” and guide your counterpart to develop a better solution — your solution.

Asking “how” gets the other side to feel in control, think about your situation, develop empathy for your position and fall into the “negotiating against yourself” phenomena (i.e. making concessions without you asking for them to do so). The kicker: since the concessions are their idea, they’re more likely to stick with the concessions, even if the concessions don’t suit their purpose or, in hindsight, hurts their position. Voss outlines how this works:

You want to make the other side take an honest look at your situation. It’s the first way of saying “no” where you’re doing a lot of things simultaneously. You’re making the other side take a look at you. You make them feel in control, because it’s a good “how” question. You don’t want to say it as an accusation. You want to say it deferentially, because there’s great power in deference. You want to find out if they’re going to collaborate with you. 9 times out of 10, you get a response that’s really very good.

Don’t be afraid to repeat the question. In hostage negotiations, Voss asked the following ad nauseam: “How do we know the hostage is safe?” “We don’t have that kind of money. How are we supposed to get it?” “But how do we deliver the ransom to you?”

I know what you’re thinking. And, you’re right. Just like Voss, you’ll eventually get the response: “You’re just going to have to figure it out.” This is not a big issue. In fact it’s a signal that you’ve negotiated and have gotten as much out of the negotiations as possible:

Of course the one time out of 10 they’ll say to you, “Well, you’re just going to have to figure it out.” But even in that case “How am I supposed to do that?” helps you confirm that you have in fact pulled as much value or gotten as many options as you possibly can out of the other side. You found a solid barrier. Your decision now is, “Okay, do I like this? Do I move in another direction?”

The rule is simple: acting dumb is actually acting smart. That’s is exactly why I’m now a bleach blonde.

Hate your job or your client? Stuck in your career and you’re struggling to get ahead?

Whatever you do don’t do this: complain. A recent study shows that complaining does nothing to get you ahead or get you the success and outcome you crave; rather, it does the exact opposite. Read on to find out how and what you can do about it.

Your Habits Teach Your Brain

Your brain is a collection of synapses separated by empty space. The empty space is called the synaptic cleft. When you have a thought, a synapse sends a chemical through the cleft where there’s another synapse. This process creates a bridge that allows electrical charges – i.e. your thoughts – to pass through from synapses to synapses with greater ease and efficiency.

Our brains have learned that it take a lot of energy to rebuild the same bridge between two synapses. So it created a solution: to rewire its own circuitry to make the bridge shorter and stronger every time an electrical charge happens. Our brain creates these bridges because it helps us conserve energy and speed up our reaction time – a very useful tool if you can’t find your next meal or if have to figure out whether or not to run when you see a lion. This brain rewiring means our bad thoughts become easier to “access” and our default position.

Complaining Makes You Stupid and Sad

Have you ever had a bad thought trigger despite the fact that there is nothing bad to think about? Enter the snowball effect: every time those bad thoughts come to mind, the shorter and stronger the “bridges” become. The shorter and easier the bridges become, the more bad thoughts you’ll have. And the more bad thoughts you’ll have will make you more negative, depressed and less motivated.

It gets worse! Complaining damages the hippocampus, which is the critical part of your brain that helps you solve problems and develop intelligent thoughts. This means that someone who complains a lot is also more likely to negotiate worse deals, fail to find solutions to problems and be depressed.

How to Stop Complaining?

How to stop a bad habit depends on what makes you stick to promises even when not motivated? If you’re like me, I will stick to a promise if I told someone that I’ll do it or if I am allowed to give myself a big reward for completing the thing I don’t want to do.

A few methods I’ve used:

• Make bets with friends to stop complaining. Whoever complains first has to treat the rest of the group to dinner, drinks etc.
• Tell family, colleagues and friends that every time you complain you have to give them a dollar.  Make sure they hold you up to it. 
• Try not complaining for 2 days. Replace the complaint with a thought of gratitude, appreciation or a solution to the complaint. After two days, evaluate how you feel and promise yourself to do it for 2 more days. If it’s working, extend the “no complaints” period to 5 days and so on.

I’m starting a no complaint week to exercise this muscle. I strongly suggest that you also give it a try – the worst that can happen is….well, I can’t think of a negative thing to say!

Ignorance is not Bliss. It’s Expensive. Especially if you’re investing or in the business of real estate. My tip: on December 1, make an effort to squeeze into the back of one of the PM Expo’s most popular talks about technology and real estate. The speakers are a rare mix of Canada’s most prominent decision makers, innovators and leaders. I guarantee that any investor, landlord, tenant or manager will walk away with surprising facts and views on the real estate market. A must attend if you want to make better decisions (click here to register).

Details About When and Where

Subhi is energy efficiency and green building expert, technical advisor, and driver of innovation and sustainability adoption in real-estate with over 20 years of experience in Canadian and International markets. As the Innovation Manager at Tridel, Subhi directs the strategic implementation of emerging new technologies and practices in high-rise buildings and oversees decision making process on major building systems such as Net Zero homes, and IoT Smart Connected Buildings. As the Director of Projects at towerlabs, a non-profit founded by Tridel and MaRS, Subhi develops commercialization channels for tech startups and emerging green building technology companies in real-estate markets through pilot and demonstration projects. Subhi is a MBA grad from Ivey Business School, Professional Engineer, LEED Accredited Professional, and a Certified Energy manager.

John Di Michele is the CEO of TREB. He entered the Real Estate profession as a salesperson and later worked five years as a Broker/Manager before joining TREB’s staff as Chief Information Officer in 2002. John served in several capacities and on a wide range of committees and Board of Directors as a REALTOR® member of three Real Estate Boards and other organizations of varying sizes. As a TREB member, he served on the Board of Directors and as Chair of both the MLS® Committee and MLS® Selection Task Force. Over the years John has also contributed to the efforts of the Ontario Real Estate Association and served on the Canadian Real Estate Association Board of Directors while Chair of MLS® and Technology Council. As TREB’s CIO John was responsible for all technology beyond the Toronto MLS® system. He has introduced and overseen a variety of notable initiatives including implementation of strong authentication, e-Commerce, Buyer Registry, CONNECT, external data integration and the re- structuring of TREB’s districts to include communities. In 2009 John was moved into the Associate CEO role and in July 2014 John was promoted to the position of Chief Executive Officer. As CEO, one of his key priorities has been to better understand and optimize the economic competitiveness and livability of the GTA and the wider Greater Golden Horseshoe Region. In this regard, he initiated and spearheaded TREB’s inaugural Market Year in Review & Outlook Report 2015, which, in part, consults stakeholders from various sectors across the region on key areas of improvement for a better future. John brings together a wealth of professional experience, the practitioner’s perspective and an intimate understanding of the real estate landscape.

In his current role, Jason manages all teams responsible for the execution of all aspects of Go-To-Market for Altus Data Solutions, including Sales & Marketing, Client Services and Strategic Partnerships. Jason joined RealNet Canada Inc. in December 2011 to head up its Business Development and ultimately ended up with responsibility for managing the entire RealNet business unit for Altus until assuming his current role. After getting licensed in real estate over 25 years ago, he co-founded and ran as President & CEO, a real estate software company in 1992, which was acquired by Filogix Inc. in 2000. Prior to the acquisition of his company, Jason graduated from Osgoode Hall Law School and concurrently ran a law firm that he founded with 2 other partners and also managed a real estate brokerage. At Filogix, Jason became a member of the Leadership Team and oversaw the Real Estate Technology Division and subsequently, Corporate Development for the company until it was sold to Davis & Henderson in 2006. At the time of the sale, the Real Estate Technology Division had established a network and MLS® system used by REALTORS® from over 35 real estate boards and associations across Canada. Jason also developed numerous strategic partnerships which, with Filogix’ solutions, formed the largest network in the residential real estate and mortgage market. Jason was a previous Director and Chair-Elect of the board of directors of the Ontario REALTORS® Care Foundation and continues to be a licensed member of the Real Estate Council of Ontario and Law Society of Upper Canada.

A deep and dark confession:  I’d prefer to talk about the birds and the bees with my parents than about fees with my clients. Why? I hate talking about money and I’m very good at making every classic mistakes when it comes to the numbers talk – I give things away before anyone asks and I cave almost immediately to requests to lower my fee. The worst part? I do this despite being a teacher of negotiation, despite being dedicated to every need of my client and despite the fact that I’m an otherwise relentless advocate for others.

Given my issue with fees, I’ve done some homework on how to feel talk about fees without feeling like a sleazy money-hungry salesperson. Here are the best tips I’ve gathered – most are from ww.spdru.com as this proved to offer the most practical advice for professionals. I’ll be applying this principles in my life and I’ll let you know how it works out!

Take the Lead

True, fees are an uncomfortable conversation. However, if you make the effort to address it first, you’ll keep control of the conversation and you’ll demonstrate leadership. Raising the fee conversation will also make you appear transparent (and, hopefully, you are!) and will help develop trust between you and the client. Transparency and trust are developed because you’re willing to talk about the tough questions. So convince yourself that you have to speak up or else risk coming off as another “shady” agent, lawyer, consultant or salesperson.

Focus on Services, Not Just Benefits

How often do you hear about the benefits of buying a service and not what the service actually offers? “Work with me and you’ll get a better deal!” “I’ll make you more money!” This claims ring hollow and always ring a warning bell of b$%&! So, why are you telling your prospects the same route claims?

Just like you, prospects want to know what you’re going to specifically do to get the intended result. Listing all of your services not only instills trust, but also increases your value in the eyes of the prospect. Why? Because you’re reminding them of all of the work you’re doing – attaining the outcome no longer looks as easy as they thought it’d be, making your services necessary, clear and actionable.

Bonus: listing your services will help if the prospect tries to negotiate down your fee. For example, let’s say you wash cars for $200. The client wants $50 off. Without understanding your services or breaking the work down into components, you” likely just say “okay” and provide the same value for less money. Alternatively, you say “no way” and the client walks. In the former scenario, you lose because you created an imbalance between the value delivered and the price. You also taught the client that the price listed doesn’t truly correspond with the value delivered. In the latter situation, you just gave up a client!

Contrast the above outcomes with the scenario in which you’ve listed the items that support the overall service. You’re now in a better position to negotiate. Why? Because you can easily use the coveted negotiation rule of never giving something up without asking for something in return. For example, you may offer a $50 discount, but only if you wash the windows and exterior, as opposed to washing the windows, tires and exterior of the car. Your offer may be exactly what the client wants, as not all clients need the same level of support. What is more, this approach works because it reinforces the value you’re offering and because it shows flexibility…a rare quality that is much appreciated by consumers.

Benchmark Your Fees with Others

I know exactly what you’re thinking: “Are you nuts? My fees are higher so they’ll go to my competitor!” Wrong. First time buyers or users of your service are likely shopping around for pricing. They want to know if you’re fair and they’re likely unable to obtain the information they need to compare apples to apples. In other words, your competitor may be cheaper, but that’s because he’s offering fewer services or because he has less experience. By being upfront and benchmarking your prices, the prospect is less likely to search others out and make a “false” comparison.  Furthermore, you’ll instil trust with your client and show that you’re willing to go above and beyond. After all, you’ve already done the work for them of finding competitors and determining the best price for value.

Word of caution: when you benchmark, make sure you’ve also listed all of your services to demonstrate the value and services they’re receiving. If you don’t, benchmarking will make it appear that your prices are arbitrary and negotiable.

Put it in Writing

Well, this is just obvious as to why. So, do it. And good luck!

Building Rapport Isn’t Enough

You got the meeting, you met with the critical decision maker and you had a fabulous conversation about his kids, hobbies and his company’s needs. Yet, you still lost the deal to a competitor. The most likely reason why you lost is because you left him confused.  Confusion is highly problematic because, as every politician knows, if you leave someone confused they’ll vote for the “simpler” guy….even if that guy has no idea about what he’s doing!

To avoid confusion, you must clearly prove the following during your pitch and during every interaction with the client:

1. They need to act now or they’ll lose something important.
2. You’re the best option.
3. You, your team and your company are trustworthy.

The way to ensure that you leave each prospect convinced that your service/product etc are right for them is by answering these questions (provided by Rain Group):

1. Why is it important and urgent to act?
2. What will they lose if they don’t act now?
3. Why are we the best choice?
4. How can I substantiate #3 and show that our claims are to be substantiated?

Answering these questions will not only provide clarity and help you get the deal, but also anticipate and provide the perfect retort to these common objections:

“I don’t need your services or product.”

This objection may mean that you:

1. didn’t understand the client’s problem;
2. you didn’t listen or bother to understand the personal challenges of your client and global challenges of the firm;
3. you focused on selling your generic service, rather than a specific solution; and/or
4. you failed to show the opportunity costs of not acting now.

Now that you know what you likely did wrong, here is the simple solution: ask why and clearly respond to the reasons for the prospect’s assertion that your services aren’t needed. While you respond, be sure to repeat back her concerns and roadblocks and draw her attention to what she’s going to lose if they won’t act.

 “You’ll have to come down on your fee.” or “I already know someone who’s in the industry.”

If you’re hearing this, you’ve failed to differentiate you and your company from the crowd. The solution: develop a differentiating service or process that clearly drives maximum value to the client. In other words, having a slick logo or another service that everyone else has won’t cut it. If the service isn’t 100% geared to improving the client’s interaction with your service, then cut it out. Some services may include providing services online so the client doesn’t have to move from the comfort of his home, automating requests, shortening response times and providing “free-bee” additional services that help increase the client’s bottom line.

Be sure to visually demonstrate the value of your specilized process or service by taking the client’s current situation (e.g. current sales price or revenue) and compare it to a better future that can only be granted by working with you. Graphs, charts and pictures are your best friend in avoiding confusion and clearly demonstrating your value add.

“I already know some people in the industry.” OR “It’s too much of a risk.”

If you don’t substantiate with solid evidence that you can bring the prospect excellent value and protect their interests, buyers won’t believe you’ll follow through on your claims; instead, you’ll be automatically categorized as just another salesperson and they won’t take the risk of giving you the business.

The solution: provide testimonials, referrals and case studies showing your ability to outshine and be the trustworthy resource your client needs. Trust is built over time, so don’t be discouraged if you get a “no” more than once. If you continue to put the prospect first and demonstrate clear and relevant value, you’ll eventually prove your worth.

People will almost always defer to and draw their opinions from the expert. This is true even if the expert is completely wrong.

We like to adopt and follow the lead of “experts” because it’s easier.  Someone has done the work of thinking for us and we are freed from this tedious and heavy burden. The lure of appealing to authority in our business decisions is similar to the lure of fast-food in our diet decisions: everything’s ready for us and it goes down easy.  Even if it’s crap.

Why You Need to be an Expert

Simply having the appearance of authority increases the likelihood that prospects will trust you, believe you, comply with your requests and follow your lead. Isn’t this reason enough to become an expert?

The Shocking Experiment that Revealed the Power of Authorities

A famous experiment conducted at Yale University by psychologist Stanley Milgram asked ordinary people (we’ll refer them to the shockers) to shock ‘victims’ when the victim answered questions incorrectly. The shockers were instructed by people in white lab coats who gave the appearance of high authority. Little did they know that some of these authorities were just students.

The shockers were told that the shocks they administered increased by 15 volts in intensity every time the person answered incorrectly. Of course, as the experiment went on, the shocks did intensify. And the victims started to scream. Some victims even begged the shocker to stop. Some screamed that they couldn’t breath or that they had heart problems. But, the shockers continued on whenever the white lab coat “authorities” told them to do so. Incredibly, about two-thirds of the shockers ignored the cries of pain and inflicted the full dose of 450 volts.

The truth is the shocks were completely imaginary and the victims were acting. This did teach us a very valuable lesson:

The real culprit in the experiments was the [participants’] inability to defy the wishes of the boss, the lab-coated researcher who urged and, if necessary, directed them to perform their duties, despite the emotional and physical mayhem they were causing.

The lesson for anyone in sales or marketing: when people are unclear or uncertain, they’ll seek out “authorities” to help guide their decisions. Given the undeniable and powerful influence of authority figures, “it would be wise to incorporate testimonials from legitimate, recognized authorities to help persuade prospects to respond or make purchases”. Better yet, it’s about time that you made yourself an authority.

How to Become an Authority: You Should Already Be Doing it!

There’s too much evidence to ignore: becoming an authority is necessary to attract clients and will fill your pipeline with qualified people who want to your help. While becoming an expert is hard work, it shouldn’t be “another thing to do”. Rather, it should already be integrated into your daily work life. After all, it’s no secret that success only comes after significant effort and after gaining significant knowledge. Here are a few tips which, again, should be part of your routine and strategy to succeed:

1. Don’t be afraid of learning. Take courses from legitimate bodies and get designations.
2. Write for various publications relevant to your industry. The publications don’t have to pay you or be massive. They just have to be legitimate.
3. Deliver excellent work, pay attention to the details and place knowledge and service over money.
4. Speak at any events – small or large. And then have attendees write testimonials about your knowledge and put these testimonials on your website.
5. Interview experts in your field and write articles about those expert’s opinions.

Taking on these tips will not only elevate your status, but it’ll also help you learn and boost your confidence. What is more, you’ll become the source of knowledge for your clients. No longer will you be sending “just following up!” emails. Your knowledge will be in demand and can be used as a legitimate reason to reach out to prospects and subtly remind them that you are the (ethical) expert.

The Steps to Asking for a Referral Without Being the Obnoxious Pushy-Salesperson

Step 1: Be Excellent

Before you even think about asking for a referral you have to do be excellent at what you do. If you’re not, the cilent would is unlikely to be motivated to spread the word about what you do and how well.

Step 2: Be the Ultimate Connector

Be the ultimate connector. Think about referrals before you begin and afterward. Be the person that connects others. Doing so helps grow your reputation as a generous person and this will encourage others to reciprocate your generosity with referrals.

Step 3: Start Early

Remember the prerequisite to any referral: you have to deliver excellent service. This means that you first have to work diligently and ensure that the client is not just satisfied, but thrilled that they had you for support and not your competitor.

After you delivered a big “win”, casually raise your performance and ask for your client’s feedback. If they have issues with you, make sure to immediately rectify these issues. It’s better to solve the perceived or real problems before you move on or you risk not getting a referral and, potentially, gaining a client who spreads negative rumours about you. Follow or modify this short script to un-awkwardly raise the performance question:

You: It’s clear to me that you have a sharp eye for value. I’ve promised you that I’ll deliver excellent value – may I ask you a quick question?

Client: Sure.

You: At this point, is there anything you’d like me to do better?

Client: No – it’s going great so far 

You: Great – I want to make sure that you get the support you need so that you can hardly contain sharing it. 

If the client says that you need to improve certain areas, say this:

You: Absolutely, I’ve taken note and will deliver. After all, I want to make sure that you get the support you need so that you can hardly contain sharing it. 

Step 4: Remind Your Client of Your Value

After the service has been delivered and before the bill is sent, give your client a call to ask for a referral. Start by reminding them of the work you’ve done and how thrilled they are and were with having you on their “team”. Try the following approach which Rick Roberge, blogger and advisors to rockstars and the like, loves to use:

You: You told me you’re happy with my work thus far. Have you told anybody about what we’ve done together?

Client: No.

You: Is it because you’re not pleased with the outcomes?

Client: No, we’re pretty happy.

You: Well then, do you think what we do together would be beneficial to any of your vendors, business partners or clients? 

Client: I don’t want you working with my clients, but maybe some of my vendors.

You: Your vendors then — do you have a favorite? Do they sell to other people you know?

Client: Yeah, we have a good relationship.

You: But you haven’t mentioned that you were working with us yet.

Client: I haven’t, but maybe it’s not such a bad idea.

You: Do you remember why you hired me?

Client: To find a new place that’s affordable and makes sense.

You: And are any of your favorite vendors trying to grow their businesses?

Client: Yes, a few in particular.

You: Okay. In that case, if you called or sent an email and said ‘I’ve been working with [your name] for six months, and she’s delivered on her promises. I know you’re looking to  [XXXX] so I thought I’d put you two together,” would they like you for that or not like you?

If the client is comfortable with providing the referral, send her a template to use or a script if she prefers to make a call. Here’s an example slightly modified from HubSpot:

[Referral],

I may have mentioned this when we last spoke – I’ve been working with [salesperson] for a few months to [achieve X]. Since you’re looking to do the same,  I realized that I should put you two together. So…

[Referral], meet [Salesperson, with a LinkedIn profile URL].

[Salesperson], meet [Referral, with a LinkedIn profile URL].

Can I leave the rest to you guys?

Talk to you both later.

If they hum and haw, however, tread carefully as you don’t want to come across as a pushy and money hungry. Emphasize that your purpose is to help and not to be an obnoxious salesperson. Then drop it.

Step 5: Follow Up with Your Client

Follow up with your customer a week or so after you make the request. If they haven’t made the referral, don’t push anymore. If they have, but you weren’t copied to the email or you haven’t heard from the referral, ask if the referral responded with a “not interested – ever”. If they did, cross them off the list and move on to Step 8.

Step 6: Make Sure Your Client Has a Great Reputation and Relationship with the Referral

Know your client’s reputation in the industry and with whom they have a great relationship and not just who know. I’ve been a victim of this in my past younger years – I’ll never forget the time when I called a referral assuming that they’d be thrilled to know that I knew Mr. S0-and-s0 and that we should connect etc. etc.. The referral had nothing to say but a chain of expletives about Mr. S0-and-s0 and told me to do the same. It turns out that Mr. S0-and-s0 had a terrible reputation in the industry and offended many people in the past. Needless to say, the referral didn’t work out and I laid low about knowing Mr. S0-and-s0.

Step 7: Get in Contact with the Referral, Listen First and Be Casual

Referrals are not cold calls. These are not strangers and so you shouldn’t treat them a one. Talk to them as you would to an acquaintance. You’re already part of the inner circle, so act like you’ve made it and that you’re an expert in your field. Confidence – with the goods to back it up – can go a long way.

Step 8: Say Thank You – NOT in an Email

Say thank you – NOT with a lame email, but actually write out a thank you note and mail it to your client and include a small gift card. We all like to get mail that isn’t junk or a bill. Compare the feeling to getting a small gift and handwritten note to getting yet another email in your inbox.

Thank you and updates are also important because no one likes to waste time on fruitless ventures (hence the sunk cost fallacy that compels us to throw good money after bad just because we don’t want to admit we wasted time). Rather, we all like to know if our efforts were valuable or a waste of our time.

These small steps will not only improve your service delivery and rapport with your client, but will also increase your level of success and help prevent the pipeline from going dry.

For some other great tips, visit this Hubspot blog.

It’s time to give up the dreaded networking events, sweaty palms and overly rehearsed (read: obviously contrived) conversation starters you learned in Forbes Magazine back in the 90s.

The new currency for building a network is genuine interest in others, compassion and providing value before asking for what you want. Use these principles and a few innovative ways to build valuable business relationships and you’ll never have to read a blog about networking, again.

Why Should I Stop “Networking” and Start Being Interesting?

Making yourself visible in the dark sea of distracting tweets, emails, campaigns, texts, Snapchat, LinkedIn message and Youtube is….nearly impossible and, frankly, a waste of time. Has your cookie-cutter email to companies and people you don’t know really having an impact? And what about those binge-drinking events you attend masquerading as “networking socials.” Doubt it. News flash: drunk people are not the best people with whom to strike a deal or to network. They won’t even remember your name in 20 minutes, let alone care about why you’re sending them your follow up email.

The solution: stop networking and start enjoying yourself and building a reputation for being interesting. Interesting people command attention, develop their own knowledge base and provide value. Here are some ways to do exactly that (Alexandra Levit‘s summary of Reid Hoffman and Ben Casnocha’s,  The Star-Up of You):

Start Your Own Association

Convene influential friends and colleagues with similar interests to share ideas and resources.  Offer thought-leadership and high-level conversation so that it’s more than just a networking group.  Meet on a regular basis, in a convenient location.  This is a great way to keep relationships strong and receive great insights in the process.

Look for Individuals, not Opportunities

Opportunities are attached to people.  Identify the people in your network who always seem to have their hands in interesting pots.  Try to understand what makes them hubs of opportunity and resolve to meet and develop bonds with more people with these characteristics.

Create an “Intriguing People” Fund

Automatically funnel a certain percentage of your paycheck into a bucket that pays for coffees, lunches, and the occasional plane ticket to meet new people and shore up existing relationships.  Pick a person who is a weaker tie but with whom you would like to have a stronger alliance, and for several months, invest time and energy into building the relationship via shared knowledge and offers to help.

Connect the Dots in Your Network

Pair individuals together who have similar interests, and make introductions via e-mail.  You may not benefit immediately, and that’s okay.  Then, think about a challenge you are dealing with and ask an existing connection for an introduction to someone who could help.  Jump-start the process by offering a small gift – such as a relevant article – to the person you want to meet.

Do the Layoff Test

If you got laid off from your job today, who are the ten people you’d e-mail for advice on what to do next?  Reach out to them now, when you don’t need anything specifically.  Have lunch, coffee, or even a phone call.  You never know what gold nuggets might come out of an informal conversation without an urgent agenda.

With these small, but significant, efforts you will build your network while also building your skills, profile and unique value proposition. No shoulder pads, feigning interest or whiskey shots required.

*Picture from Purdue CCO Career Blog