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Networking – what’s your ROI? Updated with Calculator!

February 1, 2012

Have I got my moneys worth from my subscription? 

Some businesses will generate instant appeal and some will not.

The same is true with people – time is the great revealer of quality and reliability.

The Power of Brand You a business run and owned by Julian Summerhayes – which has numerous articles on how you and your brand are one and the same

It may not happen the first time you walk in a room but results will come; however not always in a financial way.

Networking can give you resources that help you build a better business- often at no cost to you.  Please do not get totally hung up on ‘ Have  I got my moneys worth from my subscription’ instead ask yourself  ‘ Have I gained value from being a member’  The people who understand this concept are the true networking winners

The secret is that networking is a process that requires constant effort and commitment to get the desired results.   Don’t expect business to come to you regularly for at least 6 months.  It takes time for people to know, like and trust you.
Business networking is not just a bunch of other people waiting to do wonders for your business. The moment you join in with a network, you are part of that network and the qualities that you bring become integral to that network.  If everyone who attends is expecting new sales to new customers, the there will be disappointed people.  If everyone goes along wanting to be part of something valuable and useful then what will it become?

The people in the group may not be the immediate target audience for your business, however they will all know 200+ others.  Everybody is somebody’s somebody.

If you are not adding new contacts regularly to your database and also actively trying to expand your network it will naturally diminish. If you only relied upon your established network you are putting your business at risk, as any network will tend to shrink over time due to contacts moving on or leaving the business world.

It’s crucial that your commitment doesn’t decrease once you find your have initially built up a series of successful business relationships.

Why Referrals Work – for fabulous articles, insights visit Bob Burg, subscribe to his Blog – go on!

If you offer to recommend your contacts and help them with their business development, they will reciprocate. New business obtained on the recommendation of other people is highly profitable. The clients usually spend more and are loyal.

Referrals work because they come from a trusted source that has already benefited from the commercial or professional relationship yet has no vested interest in the business. We all know how powerful LinkedIn recommendations are! It is independent and unsolicited. In business terms it has a rapid conversion rate – acceptance being dramatically accelerated because the service or product has already been tried and tested by a reputable third party.

Referrals are the rewards that come once you have created your network, made your connections and built your relationships. They are the ripe fruit that you have worked hard to grow. Like a harvest, they only appear if the conditions are favourable (i.e. if they are deserved).  Like a harvest – the more you put in the more you can get out..  Like a harvest you need to feed, water, encourage, communicate and engage! 

It is a simple approach which feeds on its own success – it has to be built on secure foundations.

When to Ask for Referrals

The time to ask for a referral is when:

  • you’ve introduced someone to one of your contacts who awards them a project
  • you have successfully completed at least two transactions for a client
  • you solve a problem for someone who wants to reciprocate in some way
  • someone thanks you for providing a good service
  • you’ve helped someone through a particular difficulty.

“Networking is the art of making connections and building alliances, developing and nurturing a web of relationships with the potential for mutual benefit” – Jan Hildebrand article in The Independent 2007

“By the way, it really is very rewarding helping people & I find that it may be a year or two before it comes back around to you, so don’t hold your breath.  Just have faith that it may eventually happen, and if it doesn’t.  Well, you did a good deed, so be content with that.” – David Coblitz from his post – http://www.photobizcoach.com/2013/09/19/business-networking-tips-on-what-to-say-in-a-business-networking-meeting/

Some quick research – the joys of Google (there are other search engines!)  – and look what I found!

Fruity Blog

The Fruit Tree Business Growth Club community Blo

These days there seems to be an endless choice of networking events and meetings that you can go to. In fact, I reckon that it would be easy to spend so much time networking that you don’t have the time to actually capitalise on it and do some business as a result!

So, how do you measure what’s working and what isn’t and how do you know where to network so it returns a satisfactory return on your investment of time and money? Well here’s my simple formula…..

1) Work out what level of business YOU need to generate each year to hit your business target (note I said you rather than the whole business as hopefully there may be other avenues of income already coming in to your company from existing customers etc). For example, let’s assume YOU need to generate £50K of new business each year.

2) Divide this figure (50K in this example) by the number of working weeks that YOU are around. Let’s say 48 because we are assuming you have 4 weeks holiday. So £50,000 divided by 48 = £1041 per week right?

3) OK, now divide this figure by the number of hours in your working week. So, assuming you work 40 hours per week then £1041 divided by 40 = £26.04

4) Finally, factor in the costs of your networking activity. If you spend, say, £1000 per year on your networking activity then do the same calculation as above (£1000 divided by 48 divided by 40) and then add this to the £26.04. To save you doing the maths it now works out that you need a return of £26.56 per hour from your networking to make sure you’re returning the right level of business to achieve your goal of £50,000 each year.

At this point you’re now able to analyse the time spent networking and the return that it has given you. You can do this for networking as a whole AND you can do it for the different groups you attend.

However, before you get your calculator and your diary out just remember a few things-

  • networking is not a short term activity (you can’t do this after your first 10 hours and moan if you haven’t got back      £265!!)
  • developing the right skills and mindset when networking can have a greater effect on your results than where you      network
  • don’t forget to factor in any cost savings you make (for example one of our members just saved £600 by using another of      our members – cost savings count just like income does.
  • put a value on the ‘softer facts’ when networking i.e. the new found friendships, camaraderie, the advice that saves or makes you money etc. All these are valuable factors that you get when networking with good people.

So, once all these factors have been considered, you can now look at the returns you’ve had and the time spent and analyse what has worked and what hasn’t. Maybe a certain group has been more productive than another? Maybe referral clubs have outperformed open networking meetings? Whatever the results, the main thing is that you are now in a position to ‘test and measure’ your marketing activity – something which many business people often ignore!

December is a great time to do this as, if you’ve recorded your business activities in your diary this year, you should be able to look through and see how many hours you’ve networked and, hopefully, have something to record the business you’ve done.

One more thing, if you find that your results are not helping you achieve your goals feel free to call me. I’d be more than happy to have a chat and try to help you to discover what’s going wrong and how you can improve it.   Alternatively, come along to one of our meetings in Doncaster, Leeds and Sheffield and let’s connect, learn and grow together.

Over n out

Brian

5 Reasons You Should Invest Your Time in Networking

By Chris Garrett

Networking has delivered more return on investment than any other tool in my business. Both financially and in non-monetary terms, my network has delivered so much value that I can not imagine what my situation would be like without it. If there is one thing that I could suggest that would be guaranteed to boost any business, networking would be it.

The problem is, everyone who believes in networking recommends it the same way.

“It works, try it!”.

But how does it deliver value exactly?

You see, networking takes time. It is not an instant gratification thing very often. OK, so we have all experienced that chance meeting where everything clicks and we come away with a brilliant, but random contact. That’s not the norm. We are talking about human relationships, and they are not always fast burning things.

People are asking if they should devote time to networking over, say, SEO, blogging or social media.

I have to tell you, being so close to things it took me a while to articulate. It’s like explaining why we need to breathe, drink and eat – my network is like food, but the other tactics are like water and oxygen to my business. It’s not either-or, it’s and. So if you are crunched for time, why should you add networking to your mix?

Of course you wouldn’t be reading this article if I hadn’t managed to give you concrete reasons why you should invest your time in networking, so here they are.

Networking ROI

There are many benefits to networking but you have to remember that we are dealing with people. You have to keep that in mind. Going out with a “what can I get?” attitude is going to sink your efforts before you begin. But, of course you need to know what return you are going to get before you invest, so here is what you can expect:

1. Friendship Benefits

I wanted to start with a benefit that does not necessarily convert to Dollars, Pounds or Euros. Do not overlook the simple benefit of having friends in the business with no strings attached. We need to know someone has our back, that we have people who are there for us. It can be lonely when you work alone, with only a monitor light to keep you company.

Having someone who understands is extremely valuable on a psychological and emotional level. Your friends can chat to keep you motivated and cheery, are a sounding board for ideas, or will listen to you moan when you need it. When SoniaJon and I get together on Skype an hour can go by in a flash, I am not always sure if we actually do solve the world’s problems, but those conversations are something I look forward to each week.

When you are in a strange town it is nice to have company even just for meals. Deb NGBecky McCray and Andy Hayes keep me safe on the mean streets of the USA, help me dodge my diet, and stop my ego getting out of control.

Now I am feeling guilty for not listing all the other people who have kept me company, fed me, or joined me in friendship and conversation over the years. Hopefully you will forgive me for not linking you up this once, I will buy you a drink next time we meet while you tell me what a horrible friend I am. Deal? :)

My point is people need people.

2. Opportunities

Now to contrast with the touch-feely first benefit, here is where the big bang of ROI kicks in. The most significant monetary benefit my network has brought me, and we are talking six figures from just one contact, is the opportunities they expose me to or introduce me to.

If you are not getting enough opportunities, then you need to build your network. Opportunities like joint ventures, client leads, partnerships, speaking and writing gigs, businesses or assets bought and sold … you name it.

All the best opportunities are shared person to person in back channels. Everything from prime domain sales through to employment opportunities. If two people are equally qualified then it goes to who you know, like and trust. A lot of the time even when the person you like is lessqualified. Getting passed over for plum gigs? This is why.

This one networking benefit alone has to be worth an astronomical amount.

There are two problems that stop people thinking of this benefit, though:

  1. People do not give credit to their network when opportunities arise. They either think “Of course I got this opportunity, I am awesome” or they think they were just lucky.
  2. Bad networking leads to a lack of opportunity, and can actually damage your ability to attract the best opportunities. It is better for nobody to know who you are, rather than be known as a jerk. Sorry, it is a simple truth.

3. Advice

We all like to give friends advice, and sometimes they even ask for it!

There are some things The Google can’t tell you. If I had gotten all the free advice I have received over the years from paid consultants then … well, I would have a massive deficit in my bank account or wouldn’t be writing this to you now.

We rely on our networks to advise us and keep us on track, and we give back to our networks in return. Give a lot and you have credit in the bank when you need to make a withdrawal. The better your network the more knowledge you can tap into.

Just in the world of SEO, people like Aaron WallDave NaylorDoug ScottJason Duke,Michael GrayRae HoffmanJoost DeValk, a certain Google employee, and numerous others have given me golden tips over the years. They have kept me from making dumb moves, and have put me right when I have been confused (ok, that happens more times than I like to admit). When people confuse me with being a search engine expert I tell them I am not but I know plenty who are the real deal. It would be impossible to get this much expertise on the payroll, the only way to have contact with this much awesome is to try to be worthy of their friendship.

There are informal advice channels like those, and there are formal arrangements such as consulting swaps or masterminds. I am doing a consulting swap with a self development expert, he is fixing my brain and I am helping him with online marketing. Masterminds are where a group of people with common goals and values get together to push, encourage and advise each other.

If you only get occasional advice from your network then you are in significant net profit from your efforts.

4. Assistance

Someone once told me the definition of a friend is someone who will help you move house with no notice and no expectation of payment. I’m not sure about that but I think mutual help is definitely part of the definition, and one of the ways you can benefit from networking. Not the house thing, the helping part.

  • Promotion – Giving you a boost in traffic, reputation, or sales
  • Community – Helping you build conversation and community
  • Links – Links in terms of Google juice, or sharing news and info from their networks
  • Introductions – Connecting you to people you would like to meet or who they think are awesome
  • Getting you out of a hole – Fixing dodgy code, giving you a heads up when you goof, or having your back when someone attacks

5. Positive Influence

You become who you associate with. This works in the negative, as any parent will have thought about while considering who their kids friends are or will be. It also works in the positive, if you surround yourself with the right people then the attitudes, habits, world view, and associations will rub off.

Apparently there is some scientific basis for this, but I have seen it enough in my own life to know it is true. I grew up in a place where success and wealth were considered wrong. If you had nice things then you must be a bad person. You can see all around you what that does to a community. So I gravitated towards people with a more positive mindset, who shared my goals and values. If nothing else I am happier for having motivating influences rather than depressing ones.

Modeling successful people is a proven way to improve your own performance, what better than to be able to model people up close and personal?

The tribe you select will have a profound impact on your work and life, so choose well.

Summary

One of the worries with an article like this is that people will focus on the “bragging” or “name dropping” rather than on the message. Thank you in advance for pointing out what a jerk I am, and you are welcome :)

The fact is I owe a great deal to my friends, contacts and extended network. If you get anything out of this article I want you to understand that every single new friend or contact you make is worth their weight in gold.

There is a danger that some people will take from this that they should go out with a gimme gimme frame of mind. That’s not what I am talking about. My hope is that you will see that while the impact might not be immediate, the compound effects of networking are significant and long lasting.

The ROI Calculator

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152 Comments
  1. I haven’t checked in here for a little while since I thought it
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    You deserve it my friend.

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    http://www.photobizcoach.com/2013/09/19/business-networking-tips-on-what-to-say-in-a-business-networking-meeting/

    “By the way, it really is very rewarding helping people & I find that it may be a year or two before it comes back around to you, so don’t hold your breath. Just have faith that it may eventually happen, and if it doesn’t. Well, you did a good deed, so be content with that”

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