Thursday, April 17, 2008

How to Know if Your Networking is Working

I speak about networking several times a month and one question I can count on getting asked is "How do I know which networking events to attend or organizations to join?" This question is on people's minds because it is all too easy to get caught up in the busy-ness of networking with only nominal benefit.

A common misperception is that the purpose of all networking is to find clients and customers. While gaining new clients is vital, the truth is networking can and should have multiple purposes. If you are networking only for new business you are missing out on tremendous opportunities.
A balanced strategic approach to new business development includes multiple forms of marketing, of which networking is only one tactic. You can increase your networking impact by selecting specific networking groups based on what you need to reach your business goals. Then define specific objectives for each group or event with which you can measure your return on your time investment.

I typically recommend that you choose ONE group for each of the five types of organizations described below. If you try to do more than that, you will spread yourself too thin, are less likely to follow through on follow-up and reduce the effectiveness of networking.

Sales & Business Development – Choose one group specifically for connecting with potential clients and sales development. Choosing which group to attend depends on your target market. If your clients are small to medium business owners in your geographic location, your local Chamber of Commerce is a likely candidate.

Another way to find a group for this objective is to focus on the industries your clients are in. Just about every industry has a professional organization with regular meetings. Read your local newspaper’s business calendar to get ideas.

Prior to making a commitment to join, I suggest you visit any organization 2-3 times. As you investigate each group ask yourself, is this group target market or target partner rich? Is the culture one that invites reciprocity and relationship?

Your key objective from your membership in this group is to build relationships of mutual benefit that lead to new business. With this focus you will be able to easily measure how much business you got from it. This may sound pretty obvious but it is curious to see how many people are networking ineffectively at this level.

  • Here is a quick basic formula to figure out your return:

  • Hours spent attending event = X multiplied by your hourly rate

  • Dollars spent in membership or fees = X
    Add together to get your

  • Total investment in networking group = $$

How many leads and opportunties are you gaining to recoup these costs?

Don't forget to include the meetings outside of the regular networking event to get acquainted with partners. That is a time investment that equates to dollars too. Don't fool yourself on the value of your time. Make it an equitable exchange by working with all the facts.

Contribution - Choose one group for contribution. This might be a Lions or Rotary club, Habitat for Humanity, the Boys & Girls Club or other non-profit organization. When you attend this group your objective is to give back to the community or world. You DO NOT have your sales hat on in this type of group. The dynamic of building relationships with like minded people is that no only do you build life long friends but find those who become key resources and connections to opportunities.

Professional or Personal Development – Sales leaders pursue continuous improvement. Choose one group for professional or personal development. This might be an industry or trade group, Toastmasters, or leadership group. The objective of this type of group is to continue to hone your skills and add to your knowledge base. You DO NOT have your sales hat on in this type of group either. However as you meet and build relationships with people sharing your value of continuous improvement you have opportunity to meet potential strategic partners and referral sources.

Fun & Relaxation – Now choose one group for fun. This might be a hobby group, athletic group, spiritual group, etc. The objective for this type of group is for renewal, enjoyment and experience. You are a whole person. Every thing you do does not have to be about building business. Have some fun. It’s easy to get wrapped up in activity, worrying and focused on business outcomes and this type of group keeps you anchored to reality. Giving your self a break from business increases functionality everywhere else.

Professional Support Team - As you become more established in your business and have clearly defined growth goals for yourself, I suggest you add one more type of group; a Mastermind group. The principle of the Mastermind Alliance was first introduced by Napoleon Hill in the late 40's when he published, Think and Grow Rich. A Mastermind group is a small group of trusted advisors who share the same goal. I've been involved personally in 3 types of mastermind alliances over the years. Their contributions have been invaluable to the growth of my company and I am humbled that all who participated felt the same way.

Now if you are in the first year or two of business development, I suggest you choose only 4 organizations to which you are committed to on a regular basis. Since your networking quality will depend on your ability to follow up, stay focused!

Strategic networking has multiple purposes. It is much easier to match your objectives with your goals and choose a group accordingly that you can test the outcome. For example, if the only thing you're getting out of your business development networking is a sense of contribution, you know it's time to start looking for another business development group!

In closing, ask yourself “Are the groups I am involved in meeting my objectives?” I challenge you to do a quick review of this past quarter activities. Are you getting a return on your time, money and energy investment? If not, it's time to reassess where to invest your time.

Network strategically. Set clear objectives and measure your results. Doing so will make your investment in time and money pay off.

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