The effect networking has on your business

Here at the-Coaching Blog-run by Gerard O’Donovan, our aim is to constantly bring value to those seeking to improve their lives. Therefore we have a policy of publishing articles and materials by guest authors whom we value and appreciate. Today’s guest author is Charlie Lawson (United Kingdom).

We are all told that we have to get our networking. Perhaps it’s to bring in new clients or to grow the business. Maybe your boss has sent you networking.

Whichever it is, it is vital that you show some sort of return on your time invested in networking. That return, by the way, can’t just be a stack of business cards! We are in business: we’ve got to look at this in terms of the financial return.

To get a financial return, we need to be finding new clients. These new clients often won’t be people you meet at a networking event. As we’ve just seen, the people in the room are just the tip of the iceberg: it’s the people who they know that we’ve got to get introductions to.

In networking terms, we call getting introduced to people ‘Referrals’.

A referral is an introduction to someone who is in the market for your product or service, and crucially, they are expecting your call. It won’t necessarily lead to business: you’ve still got to go and sell yourself as to any other potential new client.

But the key part about a referral is the fact that the third party has been warmed up so that they are keen to talk to you and hear what you’ve got to offer.

As an Unnatural Networker, knowing that someone will definitely take your call and is looking forward to it definitely makes it easier to be confident about speaking to them.

Why are referrals so good? I heard a fascinating story recently at a dinner party that perfectly illustrates why. I met a friend of a friend who ran a decorating business, and his frustration was obvious as he was enduring a slow start to the year — the phone had just stopped ringing.

I asked him what he was doing to promote his business: he’d printed several thousand leaflets and dropped them through letterboxes all around his local area. I asked him how many calls he’d received. From all that effort, he’d received just one call to quote! However, as it happened, that one call had been for what would be a very good job — repainting an entire 5 bedroom house.

As you can imagine, he was desperate to get the work. When the client called back to discuss his quote, they told him that they’d ruled out 4 other companies, and he was on a shortlist of two. They told him they would think about it over the weekend, and call back on Monday.

He told me he spent a nerve-wracking weekend waiting, but was very confident about winning the pitch. He’d been super-professional, arrived early, provided guarantees about the quality of his work, was available to start immediately, and the clincher in his mind: he personally was an expert in painting ornamental fireplaces (of which there were two in the house).

I have to say I very much identified with the decorator: we’ve all been in situations like this. Maybe we’re perhaps pitching for work, perhaps going for a job: but we know that we’re the right person. We just KNOW it.

Monday morning came, and the client phoned. They’d decided to choose the other company! The decorator, despite being absolutely gutted, did what every good business should do in this situation, and asked for feedback from the (non-)client.

‘Was I professional — do you think I could have done the job?’ Absolutely, came the reply.

‘Was I competitive on price?’ Definitely. In fact, his quote had been cheaper than the other company.

‘Well, then why didn’t I get the job?’ Because the other company came from a referral.

From all points of view, referral business is better than that gained through other means:

  • For the business supplier, referrals tend to be easier to close and have fewer objections. Referrals often bring customers with a stronger sense of loyalty that remain clients longer.
  • For the referrer: they increase their credibility with both the end user and the business.
  • For the end user, the trust element is crucial. Why take a risk with someone from an online search?

If the phone isn’t ringing, or potential customers aren’t walking through the door — then you’re not going to be in business long. There are lots of ways to generate new business — be it advertising, PR, taking on extra sales staff, cold calling. All of them work — but are any of them as good value or work as well as people in your network consistently referring business to you?

About the Author

Charlie Lawson is a networking expert and author of The Unnatural Networker. He is also the UK and Ireland director of BNI, the world’s largest networking referral organisation. He helps fellow entrepreneurs who are struggling to find networking confidence. For more information, visit www.bni.co.uk.

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