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Are You Networking Wrong?

We all know that word of mouth is the best marketing tool there is. Why? Because when someone tells a friend, family member, neighbor, or colleague how good you are, you’ve already overcome the biggest hurdle to making a sale – trust. 

Networking is a great tool for building a referral network and increasing word of mouth business because it allows people to see you, hear you and watch you over time and that builds trust.

There are a ton of networking opportunities out there for business owners.  Including Chamber  of Commerce events, Business Networking Internatiohow to get more referralsnal (BNI),  LeTip, Successful Thinkers, and dozens of others.  Then there are the professional and social groups and associations, Rotary, Kiwanis, Soroptomist, etc.  If your goal is to meet people who will help your business grow, then not all groups are created equal and like any marketing tool, it is important to have a strategy and to choose wisely.

Here are 4 things to consider before joining any networking group or association

  1. What is your goal – As a business owner I’ll admit my #1 goal is to meet people who can help me make my business a success.  Whether they are are potential clients, people who have access to and can introduce me to potential clients, or successful business owners I can learn from. Every group I’m involved in – whether it’s networking, charity, Chambers, or a committee, I join with that goal in mind.   Some of you might think this sounds selfish and self serving, but it isn’t. I was doing volunteer and charity work long before I became a business owner. The only difference is now instead of stuffing envelopes or volunteering at bake sales I’m on committees and boards of directors – places where I can meet the people who can help my business while I’m giving back to the community.  All I’m saying is that as business owners we need to be mindful of where we invest our time.
  2. Who attends the group – This is huge.  I am asked to attend networking events all the time, but my target market are 7 figure businesses – and if a networking groups consists mostly of start-ups and home based businesses, that isn’t’ the best use of my time and resources. Who is your target market? When considering a group or event ask yourself,  is it going to help you get  exposure to that target market? If not, you should probably pass.
  3. What is the cost of membership – I want to wipe out a common misconception and make one thing very clear here: NO NETWORKING GROUP IS FREE. Sure, maybe there are no membership dues but time is money and for most of us, our most precious commodity. So when considering the cost of membership I want  you do this exercise:

a).   Multiply your hourly rate or wage x (the number of hours at the meeting + the number of hours spent on follow up coffees, lunches, phone calls + travel time)

b).   Add the cost of coffee, lunches, dinners, drinks, mileage, bridge tolls,

c).   Add up any dues or fees paid

d).   Now add the totals of a, b and c together – this is the total cost of membership.

e).   Now I want you to divide the total cost of membership by your average sale amount to figure out how many clients you’d need to make this investment worthwhile.  Think about the networking you’ve been doing, is it paying off? I bet you’re going to be surprised

4. Analyze the clients you’re getting:  Ok, so speaking of your average sale amount – take a look at the clients you are getting from networking; calculate the average sale amount AND the profit margins, do they match up to average? Technically, both numbers should be higher than average if you’re networking in the right places, because they come to you pre-qualified and ready to buy because that trust hurdle has been overcome. If they aren’t  you may be networking in the wrong places.

Remember no marketing tactic is going to give you the results you need if you don’t put some strategy behind it. Plan. Analyze. Think.   Take a look at these 4 tips the next time you are thinking about going to another networking event or volunteering for another committee! Remember, time is money!

What do you think?Leave your comments here.

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By the way, if you liked this post, I’d really appreciate your Retweet!!! Thank you. 🙂

 

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6 Responses

    1. Carolyn

      Thank you Larry for both the read and the comment! I appreciate your time. And I loved your post! You made a lot of great points- some I made in a previous article: Is Your Business Competing with Spam. I agree that despite what this current article says, it isn’t all about “taking”, it is also about building a network to make it easier to help and give to others, but , as you pointed out, one still needs to be mindful and make the most efficient use of their time.
      Thanks again Larry!

  1. Pat Holzwarth

    The only thing I would add is remember your referrals don’t happen right away it takes time for people to trust you. so yes your time is money but you do have to spend money to make money.

    1. Carolyn

      HI Pat,
      Absolutely – great point. Thank you for taking the time to post it – and for reading my blog. I know you have lots of content to choose from, so I appreciate you taking the time to read mine! Have a wonderful and fortunate day! 🙂

    1. Carolyn

      Hi Susan,
      Thank you very much for both reading and taking the time to comment on my blog! I am so glad you enjoy the tips I share- great to know they help. And yup, time is money – and I think no one understands that more than a solopreneur! Have a lovely and FORTUNATE day! 🙂

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