The 3 Step Process To Use If You Want To Get Qualified Referrals From Your Best Customers! – with Mike Michalowicz

In this interview Mike Michalowicz author of The Pumpkin Plan reveals a 3 Step Process To Use To Get Qualified Referrals From Your Best Customers! Please note, it does not involve you actually asking your best customers for referrals either, that is the old way! This new process is not obvious, that is why it is brilliant and will get you results if you follow the steps!

Mike Michalowicz author of The Pumpkin Plan




Tweetable Quote:


In this Episode You will Discover:

  • Why Mike believes that the old way of getting referrals doesn’t work anymore.
  • Why Mike believes in going to your best customers to ask for referrals to their vendors.
  • How Mike connects with other vendors his best customers are using to find more clients.
  • How Mike continually gets in front of his customers by finding out where they hang out and what their interests are.
  • Why Mike believes in being honest and integral when connecting with other vendors.
  • How Mike nurtures a collaborative relationship with other vendors on an ongoing basis.


Noteworthy items Mentioned in this Episode:

  1. Profit First: A Simple System to Transform Any Business from a Cash-Eating Monster to a Money-Making Machine. by Mike Michalowicz
  2. Influence: The Psychology of Persuasion by Robert B. Cialdini
  3. The Psychology of Persuasion: How To Persuade Others To Your Way Of Thinking by Kevin Hogan
  4. How to Win Friends & Influences People by Dale Carnegie


Episode Transcript:

OWEN: My guest today is Mike Michalowicz and he is the author of The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field. Mike, welcome to the show.MIKE: Oh, thank you so much Owen for having me, I appreciate this.

OWEN: So Mike, one of the reasons why I wanted to have you on the show is, first of all I love your book, and it’s all about first of all, identifying your ideal customer and really getting to know what makes them tick and who they are. And then, I think the hidden gems I discovered from the book is your referral process in the sense that most people think of referral being, hey, you talk to your customers, try and get them to get referrals for you. But you have you have an ingenious way of doing it, and I want to get my listeners to understand the referral process you talk about. And so, first of all, let’s talk about maybe some mind blowing results that maybe you or your clients have gotten from initiating the referral process that you have.

MIKE: Sure. My first company was in computer networks. I was the computer guy that would come to your office or your house and repair a broken computer or remove a virus from it. And what I used to do is ask for referrals. Dan, how was your experience and ask for a referral. And I found that didn’t work well, and later on I’ll gladly tell you why. But I found a different way of doing things, a different thing to ask. And what was amazing was, A, everyone was giving me quality referrals now, introductions to a key vendor. And I’ll explain why it’s so important. And then that turned me onto lots of leads. My first business, once I figured this out, I knew the niche I needed to serve doubled in revenue. I was doing currently maybe 500,000. I figured this out when 500,000 to a million, a million to two million, and I sold that company to private equity. And my second company, this is the only referral method I used and I grew it, it was on a run rate for seven and a half million in two and a half years. We were tracking at that rate but it was growing so fast that the Fortune 500, [Unintelligible 00:02:12] International specifically came in and acquired my company. So I’m a big believer in the system and that’s why I wrote my book The Pumpkin Plan about this process.

OWEN: That’s awesome Mike, I really appreciate that. And so, why is the old way of getting referral’s no longer working?

MIKE: Well, if you think about it Owen, the old way is this. Let’s say you and I do business together. I’m the vendor. I provide whatever my service is to you. At the end, the script is always the same. I go, “Hey, Owen how is your experience?” And you say, “Oh, it was good, it was great.” Then I say, “That’s wonderful. Would you have any friends or other acquaintances that could also use my business services?” As for their referral, now, there’s a couple of problems just in that dialogue right there. First of all, when I asked you how was my service, out of social grace you’re going to say it was great but it may have actually not been so good. Really, what dictates if you liked me or not, or at least the way I can tell if you liked me or not is by your behavior. If you keep buying from me repeatedly, clearly you have an affinity toward what I do. But if you just say I was good, it doesn’t mean I was good. We say things out of social grace. So often, a customer may not be happy with us but saying that we did well. And then we ask for the referral. So now here’s a customer that doesn’t like us that we’re saying “Hey, can you refer me?” And so now, they don’t want to make a good referral, or they don’t want to make a referral at all, but also, when we ask people with a sense of obligation. So I ask you for a referral, you’ll say, “Oh, sure.” Not that you want to do it, you feel obligated to do it, because I asked you. And therefore, people give often bad referrals. And there’s one more thing I just want to share that’s going on, it’s called dilution. What dilution is if you do like me and I do a great job, and I ask for a referral, what that means to you as a customer is now I’m going to have a little less time for you. I’m going to be serving whoever you referred me to. I’m going to be diluting my availability to you. So from the customer’s perspective rarely is giving a referral a good idea, that’s why they don’t work.

OWEN: I like that, because you made the distinction in the sense that if first of all they don’t like your service and you’re asking for a referral, that’s a whole different crazy ballgame to be in because they won’t want to even do it in the first place. And even if they like your service there’s this perception in their mind where they feel like “Now this guy is not going to have enough time for me to share with the world.” It’s like [Unintelligible 00:04:37] ask me, “Who’s my transcriber?” And I subconsciously have to stop myself from thinking that way and just refer the transcriber knowing that he has his way of doing things and he’s going to get the work done. So I definitely get your perspective. And before we even talk about the new process for getting referrals, is there like some preliminary or introductory information, or like a foundation on which this whole process is based upon that the listeners need to learn first before we talk about the referral process?

MIKE: Yeah. So, two elements. First of all, we need to always think from the consumer’s perspective. You see, you and I, and all vendors we’re biased with what we want. I want referrals. I want as many as I can get. But that doesn’t mean it serves my customers. Because as we talked about, it can dilute the attention I give to them. So, it’s not in the best interest of the customer. So step 1 is ask and understand what is truly in the best interest of your customer. The second component of a dilution versus focus. And dilution we just talked about it. You understand that. The focus side is this. Is there a way, and I argue there absolutely is. Is there a way by asking for a certain type of referral that you can actually become more focused with your client? That your client will perceive that this is benefitting them even more. And if you can do that, and the system I’m about to share with you does do that. If you can do that, now your customer is going to be excited about giving referrals. They’re going to seek it out. Because the more referrals they give, the more they benefit. And by the way, here’s the little tip-off. This isn’t a financial thing, this isn’t like “Every referral you give me I’ll give you $100.” Those systems generally don’t work that well either. I’m saying is there a system, there is, that we can do stuff that’s in the best interest of serving our client that we already serve even better by asking for referrals? That’s what we need to achieve.

OWEN: So let’s jump right in, let’s talk about this. I’m sure the listener is eager to [Unintelligible 00:06:34]

MIKE: Yeah, that was our big build-up, right? All the exciting build-up. What is this system?

OWEN: Let’s go in.

MIKE: Yeah, here’s the process. What you do is go to your best customers. Now, step 1 is only your best customers. Why? Because we want to clone our best customers. There’s a saying that birds of a feather flock together. So, when we go to our best customers and ask for referrals, they are going to get us to ultimately people just like them. It’s not good to ask for referrals to anyone. Your bad customers, should they give you referrals, they’re birds of a feather flock together too, they’re going to give you bad referrals. So, step 1. Go to your best clients, the ones that you like doing the most business with and they like you and they’re proving it by buying from you repeatedly. Then, ask for introductions to other vendors that they currently use. This is the whole secret right here. When you look to a client and you say, “Hey, I’m your computer guy” for example, “what other vendors do you currently depend on?” Now you’re not looking for other computer guys. You should be, and you’re likely the only computer guy, but you want to know who’s cleaning the office, who do you use for your financial services, who’s you’re attorney? Now your clients are going to come back to you and ask, “Why do you want to know who these people are?” That’s where you go to step 3. You tell your client by understanding who these other vendors are you can collaborate with them. You see, when I was the computer guy I would install cables and stuff throughout the office. If I knew who the cleaning company was, I could collaborate with them and learn how should I wire the cabling so it doesn’t interfere with when you’re doing the cleaning. So this is the best interest of our common client. So once you explain that to your client they will refer you to all their vendors. And this is where the magic happens. When I built the relationship with that cleaning guy, or the financial guy, or lawyer I would say, “Hey, we have a mutual client. My favorite client, I know you work with them, they told me about you. I’d love to collaborate and learn how we collectively conserve our common client–” We have one common client. “How do we serve our common client even better. Then by doing that and building this relationship with the vendor, this is where the birds of a feather comes in. That vendor, that cleaning company or lawyer, that person, they have other customers, perhaps just like your best client. And when you build a rapport with these vendors, you’ve tapped what I call the vendor well. You can now say to them, “Hey, who else do you know? We’re working with this one great client together, are there other people that we can start working with together?” And sure enough they’re going to have access to other customers just like your best customer. And they are gateway in. That’s the whole method.

OWEN: That’s awesome. And one of the things I want to do is really breakdown each of the different steps so that the listener can– now they got an overview, I want to jump right in. So the first one you said, reach out to your best customer. And from your standpoint, what is the best customer? How do we even determine who they are?

MIKE: Yeah. So I write about, this is my book, and I’m not trying to plug my book like crazy–

OWEN: Plug away. I’m a fan.

MIKE: It’s a great resource to get started. So it’s called The Pumpkin Plan and you can go to my website, it’s, give your best attempt at spelling it. Google will find me, I’m the only Mike Michalowicz on this planet. And you’ll find free resources in the resource section that has this chart. It’s called the client assessment and here’s how you work it. The client assessment has many categories that defines ideal clients. They have an overlap of values, meaning do they have a consistent vision that you have, do they pay well, what’s the perspective future for them? There’s about 10 or 11 different categories really to analyze your clients. But on this interview I’ll give you the quick shortcut. There’s two things I want you to look at. First of all is the revenue that you generate from them in the last 12 months. Sort your clients, all your clients that you have by revenue. The most revenue at the top, the least revenue at the bottom. The reason you do this is the people that pay you the most are telling you through their behavior that they like you the most. If the customer comes back to you repeatedly and they buy from you, those are the ones who really like you. It’s not the people that rave about you and say, “Oh my god, this was an amazing experience” and then you never hear from them again. But this looks very nice but I’m not getting business. So category 1 is who’s buying the most from me and ideally who’s buying the most from me repeatedly coming back over and over again. Those are the folks that love you. But then there’s a second category, I call the cringe factor. This is how it works. When you look at each client on the list do you smile? Like when the phone rings are you like, “Yes, I love this customer” or do you cringe? Like, “Oh my god, I cannot stand that.” If you love the customer, if your initial reaction is you love them, that’s an indicator that you are automatically giving your best service. When you like someone you can’t help but be great to them. But when you don’t like someone you can try to fake it till you make it as they say. But you can’t really do it. The energy isn’t there. Or maybe you have employees and now you convey for them, “Oh I hate this customer, you deal with them.” Now, the weird thing is this Owen, sometimes the top client, the one that generates the most revenue for you gets a cringe. They may spend a lot of money but they suck to deal with. That’s not your best customer then. Sometimes it’s the 2nd or 3rd one down the list. Once you do this list, circle your top 5. Usually they’re near the top but now he’s the number 1 customer. Circle the ones that intersect the most revenue with the smile on your face. Then once you find those top 5 customers, start calling on them and tap the vendor well.

OWEN: Okay, great. So now we’re on the part where you’re trying to find out more about from the best, you’ve identified the best customer and now you want to start going out to each of the best customers based on revenue and also the cringe factor as you mentioned. And now you want to find out who their vendors are. And I think to myself, is it possible that when you say vendors that you also mean like– okay, besides like vendors and people that they work with, and other [Unintelligible 00:12:41] that provides services to them. Are you also talking about tools that they use as part of their everyday activity in their business? Are we also talking about maybe like what networking events where they go to. What blog post or influences do they pay attention– I’m wondering if these can be added into this part as well, I’m just curious. Correct me if I’m wrong.

MIKE: No, you’re totally right. There’s a lot of opportunities for mastering the psyche of our customers. This tool, the vendor well, is just one very specific tool and that’s the strategy that has brought absolute success to my businesses. These other elements though are mandatory. So, with my best customers I’ll interview them and say, What magazines do you read, do you read magazines, what websites do you visit? Where do you hangout, what trade shows do you go to, where do you network? All these suggestions you’ve made. And this is the powerful thing. There is a psychological phenomenon called frequency. Frequency works like this. The more frequently see something, the more we automatically trust it. And the proof is like Coca Cola, they’re constantly running commercials. They know that when you see the commercial you’re not going to buy a Coke in the moment, but the next time you’re at the supermarket you’re more likely to buy a Coke than a generic brand because you trust it more, you’ve seen it more. Well, we don’t have Coke’s budget but we do have the ability to appear frequently in front of our category of customers, we just need to ask them where they hangout. So, it’s kind of a long answer to your question. Yeah, you can do a lot more than just ask them about the vendors, ask about all the areas they congregate and then appear in all those areas. And to them you become the Coke. You seem to be their all the time, you seem to be everywhere to them, and they trust you more.

OWEN: Yeah, and I think what I hear from that is you start out by focusing on trying to get what the vendors are and then maybe eventually you can even extend this, after maybe interviewing all your best customers and find out what their vendors are. You might even see a trend of all the vendors that they’re all using in common. But on top of that you take the next step and starting finding out what tools, what software do you use, and that what events you go through. And you can build it based on that and even build trends on what they’re telling you. I like that. Now, let’s assume that we started only by focusing on the vendors that they use, right? The part of reaching out to the vendor, I’m trying to figure out how do you make it a win-win for the vendor? Because just reaching out to them and say, “Hey, both have the same customer.” In a way, it has to be win for them as well.

MIKE: It has to be. Well, the thing is you call about collaborating. And by the way, the whole key to the system is you have to be honest– this is integral. I mean [Unintelligible 00:15:32], right? So, when you call this customer or this vendor, you can’t say, “Well, my secret, hidden agenda is just [Unintelligible 00:15:38] the crap out of you. No, the reason we’re doing this is to genuinely collaborate. So you call them and you say we have a mutual customer, this guy I just spoke to, my best customer. And I realize he works with you, and he told me about you. My objective is to collaborate, so your job as a vendor to him is even more efficient. I recognize I’m his computer guy and you’re his financial guy. But maybe when we setup computers  we can setup the design of the technology, they types of computers that he uses to best match what you do as a financial provider. So, the essence of this Owen is to find out what can you do to better serve that vendor. In fact, this is the mandatory key. Because unless that vendor is thrilled with you, why would they want to then in turn refer you? So master your relationship with your one shared customer that you have from the get-go. And once you get that mastered then seek to expand it with them.

OWEN: I think this was the opportunity to maybe like give an example of how you do something like this. Because I know the first thing is building that relationship with the vendor and really collaborating with them and giving them value based on the fact they have this shared customer. So is there like an example of something that maybe you have done in this regard, or a client of yours that– you can make it more concrete for the listener.

MIKE: Sure, I’ll share a personal story. So my first company was computer networks, that means as I was telling you earlier I’d come to your office, your house, whatever, and install a network or fix your computers. Well, as I was doing this I found out that my best customers, I went through that assessment process I shared earlier, the hedge fund industry, which I didn’t know what the hedge fund industry was. But I did know these were my best customers. So I interviewed my best customers, really gotten inside their mindset, asked them for other vendors. And one vendor I got referred to was Goldman-Sachs, Goldman-Sachs is a clearing house for hedge funds, and effectively a bank for the hedge fund. And I was introduced to him and I called Goldman-Sachs and said, “We have one mutual customer in common. This guy–” The company was called Appaloosa. And I said, “I’m working with Larry at Appalooza, he said you are their clearing house. I’d love to meet and see how we can collaborate and serve Larry better.” They said, “Oh, that’s interesting. No other vendors ever call us to do this” which by the way is a tip that so few people do this. It’s a great, easy way to get the introduction. So, I then went in, and that was Goldman-Sachs, and I said, “Well, tell me how you’re serving Larry, what you do for them. And is there anything I can do to make your job easier with Larry?” And he said, “You know what, we provide them with financial information on a regular basis. His technology has to be setup in a way that he receive this seamlessly.” One of the things, and this was such a simple thing was this was when faxes were still hot. There was a daily report that would come in, and what Goldman-Sachs would send this report at the end of the business day, at the end of the trading day to the fax machine. And the receptionist would walk it over to Larry, my contact there. Well, they said we just want to make sure those faxes are always delivered, they can’t be [Unintelligible 00:18:46] from confidential information. So we said, “Well, what if we move the fax machine right into Larry’s office, a hotline if you will for the fax delivered right to Larry’s desk?” And I said, “That would help us a lot.” So, we did that. Larry, our mutual client was thrilled. He was getting confidential information right to his desk, right on time. Goldman- Sacks was thrilled because of being delivered to him consistently every single time they had confidence, and we were thrilled because we facilitated that relationship. Well that alone had Goldman-Sachs pumped about us because we were doing stuff that no other computer vendor, network guy would do. And so they started referring us. And within, I think it was 3 years, Goldman-Sachs had referred us to 75 hedge funds. The company started exploding, my company has started exploding in growth because we’re being introduced to hedge fund after hedge fund. When I sold the company, the group that took it over, they continued to grow it using this principle, and I have just dominated the industry.

OWEN: So I get that the first focus point when you’re talking to the vendor now is finding out what is the challenge is or whatever that they have when they’re dealing with this other customer that you guys have in common. And you’re trying to find out a way to solve that challenge for them. But what happens if you don’t even know how to solve that problem? That the biggest challenge that they have over that very customer you have in common. What if you don’t have a solution that will solve for the vendor– Do you understand what I’m saying?

MIKE: No, I totally understand that, and maybe you don’t. Then the question is can you find it. Are you able to find a way to do it, or is it just outside the scope of what you do? No matter what you have to have that dialogue with that vendor. So if a vendor asked me if the computer is saying, “You know what, we have a problem with the security of the building. Whenever we send out our folks from Goldman-Sachs or something to the hedge fund, and the security blocks the way in and it’s very frustrating. I can’t fix that, I’m the computer guy. But they may have said the computer performance isn’t good enough. The bandwidth for the internet connection needs to be amplified. Well, I can do that but I need to get approval from the client, and the client may say no. So maybe in my capability I may not be permitted to do it. But no matter what the request is or are, we have the responsibility to simply communicate how we’re handling it and if we can handle it back to that vendor. Communication is king.

OWEN: I get that. So it’s really trying to be look at what the problem is and put on your thinking cap and just figure out, if I can solve it, let me go ahead and solve it. If I can’t solve it then let me figure out a way who else, someone that might be able to solve it. And help them put all the information in front of both parties, the vendor as well as your customers. That way, you get closer and closer to the solution. But as a result of you doing the groundwork for them, I’m thinking.

MIKE: That’s totally right, I agree.

OWEN: Okay. And so now you do this relationship with the vendor based on the common client that you guys have. Now, we’re trying to tap that well of all the other idle customers that this vendor also has. So, how do we make this transition?

MIKE: So, once you have an established relationship with this vendor, and you’re serving them just as discussed here. The natural discussion is going to go, “What else can we do together?” And that’s actually the question I use. I call a vendor after working with them for awhile, making sure that they’re happy and our mutual client’s happy. And I’ll say, “What else can we explore? Are there other things we can do together?” I’ll even seek ways that I can help them. Perhaps I have a client that I’m working with and they’re seeking a Goldman-Sachs or whoever the other vendor is and I’ll make an introduction. But simply by saying what else can we explore together, what else can we do together, that opens the window for the referral. And by the way, a vendor referral is the best referral. Think about it. If your lawyer comes to you Owen and says, “Here’s your guy, you got to use this computer guy.” I’ll suspect you’ll be like, “My lawyer says this, I’m probably going to seriously consider it.”

OWEN: Yeah.

MIKE: If another clients calls us, says, “Hey, Mike’s giving me a referral fee if you use me.” Like your phone service, if someone says, “Hey, you should use AT&T’s phone service because I get a referral fee, I suspect you’re like, “I don’t know if this a good referral, this is kind of creepy actually.” So the ironic thing is a vendor referral is way more qualified than a client-to-client referral.

OWEN: I get that. But I’m wondering too, you know how you think of maybe offering your ideal customer a referral fee. Is that something I can even do with the vendors at this time? After you build a relationship with them, I say, “Hey, I want to be able to offer you something” like an incentive. I don’t know, I’m just wondering.

MIKE: Yeah, it absolutely can be done, but here’s a piece of warning that it changes the relationship.

OWEN: Okay.

MIKE: You see, when I work with my vendors and there’s no referral fees, it’s built on trust and it’s built on serving each other. How can we both serve each other? The second there’s a financial transaction, the mindset changes. How much are we getting out of this deal? Where’s this deal going? I’m not making enough money, you owe me some more. So I actually very rarely do a financial transaction because everytime I’ve done that it’s changed the relationship, and not necessarily for the better. So, yes you can do it. In some cases I’m sure it’s an advantage. From my experience I try to avoid it.

OWEN: Okay, good. And then I think one of the things I want to is just share how 3 different types of businesses implement this referral process that we just discussed. One of them was an e-commerce business. Another one is a business, maybe like a professional service business that prides on getting appointments, which you then convert into actual sales. And maybe like a software/type of business that charges a recurring fee. That way the listener can see three different types of businesses and how one can go ahead try and implement this.

MIKE: Yeah. So the great thing is foundationally, everything you shared is the same for each business. It doesn’t matter what kind of business you’re in, foundationally it’s the same. But there are a couple of nuances. So if you’re an e-commerce business, that means you’re likely a B2C, right? So B2C stands for business-to-customer, or business-to-consumer. And B2B is business-to-business. In a business to consumer kind of venue, e-commerce you typically have thousands of customers. When you’re starting out of course less. But when you really established thousands or if you become Amazon-size, millions of customers. What you need to do is still sort the customers out by revenue, same process. But what you do in this case is you look for what kind of demographic is generating the most revenue. Is it single females who are divorced? Is it elderly men, is it married couples? What’s the common demographic that’s your best consumer. Then once you identify that you take a sampling. You pick from that group and you still call upon them. You still interview them and ask them for their vendors, but you need to target a demographic when it comes to a B2C.

OWEN: Yeah.

MIKE: Now, once B2B like post services, that was the example I just gave you. My business in the past were B2B businesses, I’m also now an owner in a B2C. But in the past I was just in B2B. And that is where you sort out your clients for most B2B businesses, we have one average about 100 clients. And if you’re brand new start-up you probably have 100 clients, but if you’re a huge company, you probably have 100 core clients that generate most of your revenue. So go through your 100 clients or how many you have, but look at the core ones. And then from there pick your top 5 or 10 core customers and then target those folks just as the way I shared. And then, if you’re in a software business where you have recurring, you’re probably back to the B2C, but maybe you are B2B. In either case, identify what category you’re in, B2C or B2B.

OWEN: Yeah.

MIKE: That once you identify your category, follow the demographic trend, B2C, or target the top 100 and pick your 5 in a B2B.

OWEN: I love that. Because it basically gives us a framework on how to, depending on the type of business you have, how to use it. And I’m curious too, this whole trend of big data thing where they always talk about big data now where you have size like Facebook, LinkedIn, and all that. And you can actually try and dig up data on someone who maybe is your customer. I’m wondering, is this something that you have seen, like applying it and trying to see, okay, what are the interest this very customer who is my best customer. What kind of groups do they participate online? And basically trying to mine the data yourself. Is this something that has come up, I’m just wondering.

MIKE: Yeah, it’s come up. The challenge is it is really hard to do. Now, I hang out with the small business community, and when I say small I mean small. Under 10 employees, solo, micro enterprises where it’s just you the entrepreneur, and maybe an assistant and that’s about it. In that environment, we don’t have the time, resources, or the money to do big data analysis. And that’s what Amazon does. Amazon throws hundreds of millions at analyzing their data, and they can extract 1% or 2% improvements out of that.

OWEN: Yeah.

MIKE: But 1% or 2% improvement in sales for Amazon, that’s hundreds of millions, it’s worth it. For a small business guy like me, a 1% or 2% improvement, that may mean 50 bucks a month. And the resources I need to dump into understanding and analyzing big data, I’m not going to get the return. It’s an exhausting effort. So, I warn people, watch out, big data is a sexy term right now, people are saying go after it. No, get simple, we’re too small for that. We need to do the really surface stuff that will bring us big results. And the prizes I’ve shared of analyzing your top clients [Unintelligible 00:28:45] that’s enough big data for us small guys. And we’ll kick ass doing that, so stick with that.

OWEN: Thank you. And rounding up the interview, and I’m curious too. So from a standpoint of having your business be transformed as a result of implementing this referral process. How will you say that your company in the past was transformed after you implemented this process?

MIKE: Well, for me these were game changers. In my first business I didn’t start out this way. But I started falling into it and that’s when my business took off. My second company I did from day 1. And two and a half years to have a business on a run for seven and a half million, and a run simply means that if we continued out the reminder of that half year, we projected we have achieved seven and a half million in revenue. That’s a fast growth company. And here’s the thing, I didn’t put a dollar into it, it was bootstrap. And I attribute, not all of its success, but a portion of it to understanding this vendor well method. I do it with my clients, I do it with myself, I do it as an author. I’m a full-time author now. I interview my best readers and I ask other vendors you use, things you have access to and want access to. And I’ve learned a lot from it and now I’m trying to work closer and closer with those vendors.

OWEN: And also now, let’s talk about on the business, how business was transformed. But sometimes also, I also want to know personally how your personal life has been transformed as a result of this process as well?

MIKE: Well, I don’t use the process in my personal life. I don’t go to friends and say, “Hey, what other friends–”

OWEN: No, I meant more as a result of the business being what it is as a result of you implementing this, how that translates into your personal life.

MIKE: Yeah, it frees up time to do other things. I have an addiction, I am a workaholic. I’m actually embarrassed by that. It’s kind of like an  alcoholic, who would brag about that? Well, workaholism, I think a lot of people brag about it, pound their chest. And I used to, but I’m finally now embarrassed because workaholism means that even if my time is freed up I’ll find some other work to work on, so I’m constantly working. This system has freed a lot of time for me. I don’t have to do nearly as much cold calling or the old school kind of referral stuff to build my business. I’m just a little embarrassed because even though I was freed of time and made my businesses grow faster, I’m finding other work I can do, [Unintelligible 00:31:16] enough time with my family. So, that’s the downside.

OWEN: I’m glad that you’re honest about it. I guess at this point now when the person is freed up enough time you have to be conscious of, okay, at that point after implementing this process and getting freed up time, what do you use that time to do? It has to be something of more impact I guess.

MIKE: It totally [Unintelligible 00:31:33]

OWEN: So what would you say is the very next step that someone who is listening to this interview up to this point should do in order to get started with implementing this referral process?

MIKE: Yeah, so how you start in your business Owen is start sorting your clients out now. You’ve got to differentiate your best clients, your 8 player client from anybody else. And now, once you identified your best clients you can start doing the system. And then the plug for my book is if you really want to dig into it, I detail this all out in The Pumpkin Plan. There’s a lot more you can do if you want to research that. But I’m a big fan of action. If you want to research it out, or consider researching that versus taking action, take action now. Sort those best clients and start calling on them right away.

OWEN: Awesome. And so, guys, you’re listening, go ahead and grab The Pumpkin Plan. And Mike I’m wondering, besides The Pumpkin Plan, what other books have influenced this way of thinking per se, to the referral plan and if you have any books that come to mind, share them why they influence you in that way?

MIKE: Yeah. Let’s wrap out the rest of my books because I touched on this process on all my books. The Toilet Paper Entrepreneur, that’s my first book for bootstrapping businesses and I touched on this strategy there. The Pumpkin Plan I detail it out. And then my newest book is called Profit First, and I talk about the financial aspect of growing a business and how vendors and different relationships matter. But outside of my books, one of my favorite  books is called Influence by Robert Cialdini.

OWEN: Love that book.

MIKE: Oh my god. Yeah, it’s the psychology of how this works. How do we communicate with each other and we can persuade to others. A lot of the stuff I shared with you is around persuasion. And persuasion I think is a very positive term. Now manipulation is a negative thing. Manipulation is where you make someone do something they never intended to do, That’s manipulation. Persuasion is where you help move someone toward where they benefit from it. Where they ultimately want to go but just need help navigating it there. So persuasion’s good. So Influence is great. There’s another book called The Psychology of Persuasion by a guy named Kevin Hogan. It’s not such a popular book but, man, I love it. And then, if there’s one classic I can recommend too, it’s How To Win Friends and Influence People by Dale Carnegie. That’s probably the best book of all-time when it comes to these type of topics.

OWEN: Awesome. Mike, what will you say is the best way for the listener to connect with you and thank you for doing the interview?

MIKE: Yeah, come to my website right now. We’re open 24/7. So my website is, it’s spelled Mike for Mike, Michalowicz is If I said that too quickly, just give your best stab at spelling that on Google. Like I said, I think I’m the only Mike Michalowicz ever to be in existence. So you’ll find me very quickly. I have free resources up there, all these books I referenced, my books. There’s a free chapter download so you can try it before you buy it. And other stuff too. Videos and other content that could help you out.

OWEN: Awesome. And final question for you, is there a question that you wish that I would’ve asked you during this interview and for some reason I didn’t get to? So if so, post the question and answer.

MIKE: Not really, you did a really thorough interview. But one question that I’ve always like to answer is if there’s only one thing I could do as an entrepreneur, what should I do? And the one thing is do it. It sounds kind of weird, but what I mean by do it is pick one thing. Whatever your gut says, “This is the thing I need to do.” So from this interview we just did together Owen, if you are listening in right now and saying, “Yes, this is the thing I need to do.” Then do it. Commit to doing it, and don’t do anything else until this process is complete. Now I understand, stuff comes up, emergencies happen. But this is your core focus. Anytime you’re not putting out an immediate fire, get right back to this. Do it, do it, do it.

OWEN: Thanks man. I really appreciate you doing this interview. And now speaking to you the listener, you’ve listened to this interview all the way to this point. And if you enjoyed this interview I want you to do us a favor, leave us a positive review on iTunes, and to do that go to And the reason to leave a positive review is because the more reviews we have on there. the more listeners we have being attracted to the podcast. And the more we inspire to go out there to get entrepreneurs like Mike to come on here to talk about how they’ve systemized their business, or in this case talk about a specific process that they have that’s working in their business, and you can learn from it. And so, finally, if you’re at that stage in your business where you’re tired of being the bottleneck in your business and want to get things documented and how you get stuff done, sign-up for a free 14-day trial of SweetProcess. Mike, thanks for doing the interview.

MIKE: Owen, absolute pleasure. Thank you.

OWEN: And we’re done.


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Here are 3 Steps to Take After Listening to the Interview:

  1. Make a list of your best customers.
  2. Interview your best customers; find out what they’re reading, where they’re hanging out, and what other vendors they’re using.
  3. Connect with the vendors your best customers use and create a collaborative relationship with them to get referred more customers who are similar to your best customers.


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