As a business professional, I can tell you from personal experience how effective referral networking has been in the success of my own businesses. But some people still need to have a clearer picture of how it works and how it can be effective in their own businesses, so I decided to debunk some of the myths and misconceptions that people hit us with from time to time.
"I tried networking. It didn't work. What's different about this?"
It's a common misconception that simply attending a networking event will bring you new business right away. It won't. Neither will just reading this; there's no silver bullet here.
Networking is simple--but it's not easy. If it were easy, everyone would do it, and do it well. But they don't. That's because it's a skill, like cooking and golf and carpentry, that takes knowledge, practice, commitment, and effort to learn and apply consistently. You can't just go out to the golf course, buy a club and a ball, whack the ball around a bit, and think you've played a round of golf. Neither can you walk unprepared into a gathering of potential networking contacts and suddenly become a competent networker--no matter how gregarious and sociable you are or how many books on networking you've read.
Networking is about forming and nurturing mutually beneficial relationships, which brings you new connections with large numbers of people, some of whom will become good customers. Networking also puts you in touch with other resources, such as industry experts, accountants, and lawyers, who can help your business in other ways.
Over time, you will get new business and your operation will grow stronger and more profitable. Will it happen overnight? No, and your new customers probably won't be among the first 10 or even 100 people you talk to, either. New business will come from people your networking contacts refer to you. But first you have to form solid relationships with your fellow networkers.
Some people go to a chamber of commerce mixer, exchange a few business cards, and then say, "There. I've networked." Wrong. That's only the beginning. You have to attend a variety of events to broaden your networking base; follow up with new contacts and learn all you can about their business, their goals, and their lives; maintain close ties with established contacts; provide referrals, information, and other benefits to your fellow networkers; and generally cultivate these relationships and keep them strong and healthy. That's networking. Only after you've been at it for quite some time will you begin to see a return on your investment. But when it comes, the return is strong and durable.
"Aren't most networking groups just people like me who are trying to build up a new business?"
When you go to a presentation or a seminar on networking, you might get that impression, because the people you meet are there to learn something new, so they tend to be younger folks. But if you go to a regular networking event or join a networking organization, you'll soon see that many of the people there tend to be older, established businesspeople. In fact, in the typical business networking group, the members range in age from the 20s through the 60s, and based on a study done at St. Thomas University, two-thirds of them are over 40. There's a good reason for this. It's usually the seasoned pros who have recognized and learned to use the benefits of networking to bolster their business. Many have used networking throughout the life of their business and are fully aware of the competitive advantage it offers. Older networkers often serve as mentors for younger businesspeople, which can be an enormous advantage to someone who is new to the art and science of networking.
The best networking groups are the ones whose membership is diverse in many ways. That is, it will have not only older and younger members but also a good balance of men and women, a mixture of races and ethnicities that is representative of the community, and a wide variety of professions and specialties. Such a group offers the best opportunities to get referrals from outside your immediate circle of acquaintances and experience--which puts you on the fast track to expanding your business.
"If my customers are satisfied, they'll give me referrals. Why should I join a networking group?"
Yes, customers can be a good source of referrals. Immediately after an especially good experience at your business, a happy client may talk you up to a friend who needs the service you provide. But it often ends there. A customer who is merely satisfied is not likely to go out of her way to tell others about you. And here's the kicker: A customer who is unhappy with you will tell a lot of people--eleven times as many as a happy customer, by one study. Customer-based word-of-mouth can hurt you more than help you.
A networking partner, by contrast, is always on the lookout for good customers for your business--just as you are always looking for people to send to your networking partners. Your fellow networkers also know more about your business and the kind of customers you want, and they are experts in marketing you by word-of-mouth, the most powerful kind of marketing that exists. This kind of referral generation lasts much longer and brings you a steady stream of high-quality business, the kind that doesn't turn around and go to your competitor as soon as he holds his next clearance sale. You can get more good referrals from one or two loyal networking sources than from all the customers who come through your doors--and the customers you'll get are the kind you'll want to keep.