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Networking is the least expensive-yet most effective-way to market your new venture. Here's how to make talking to others a vital part of your game plan.
David Lewis didn't spend any money to land 17 of the first 20 clients for OperationsInc.com, a business-operations and human-resources consulting company he founded in Stamford, Conn., last year.
Instead, he introduced himself and talked to people at dozens of meetings of the local chamber of commerce, regional business associations and national professional group chapters. His new customers came from this new network of business and professional contacts.
As Mr. Lewis discovered, networking is an important, no-cost marketing tool that can help put new businesses on the fast track for success. But all networkers aren't created equal: the more you have to offer, the more likely others will be interested in meeting and working with you.
This can be a special challenge for new entrepreneurs, says Mr. Lewis. "Small start-ups are looked at with lots of skepticism and even some bias in terms of their credibility and likelihood of success," he says.
Even so, most entrepreneurs find networking is the most cost-effective form of marketing available, says Nancy Michaels, president of Impression Impact, a marketing firm in Concord, Mass. "We like to do business with those we know and trust," she says. "The best way to get to know someone, other than working with them directly, is through networking."
This means networking should be part of every start-up's marketing plan, says Dan Kuschell, a Phoenix-based marketing consultant. Networking "is the surest way to long-term stability in business today," he says. "If you nurture your network the right way, you'll build alliances with other businesses that will gladly promote your product or service to their customers."
More doors will open if you bring something to the table that others can use, such as referrals, information or assistance with problems. And the longer you're in business, the more credibility and success you'll have with contacts. Mr. Lewis, for instance, had to network consistently for several months before he was taken seriously and his new contacts led to new contracts.
Entrepreneurs also must be more goal-oriented than their older counterparts when networking. While established owners can schmooze just to beef up their address books, new ones have more pressing needs, such as generating immediate awareness of their companies and finding customers.
A Different Approach
Mr. Lewis practiced "random networking" -- meeting as many people as possible to discover who they are, what they do and how you might work together. A more selective strategy is "smart networking." That means doing your homework before you network to determine who you really need to know -- whether by title, job description or area of responsibility -- to achieve your goals.
A case in point is BuzzMetrics, a New York-based technology and consulting firm founded in 1999. President and CEO Jonathan Carson recalls that "as an unknown new company with a totally new product category, we had to hustle to establish name recognition and build awareness and understanding of who we were and how our service would be valuable."
But rather than spreading the word about their company among strangers at a generic networking event, BuzzMetrics' principals decided to target and customize their efforts.
First, they listed their target client companies. Next, they refined scenarios of how their product -- software that analyzes online community discussions -- could generate results for each of the firms. "We then set up a panel of advisers who fit the profile of our target contacts to review our approach and provide feedback," says Mr. Carson.
BuzzMetrics mined its existing network for contacts who could introduce them to executives at the targeted companies. This eliminated their having to search for the executives randomly and contact them without introductions. The resulting meetings went well, generating positive awareness and multiple new business leads. Four of the company's first six clients were signed up as a result.
Six Useful Steps
But many entrepreneurs don't realize networking's potential because they fail to do advance research, set goals or prepare in advance of situations where they'll be meeting others. They also lack ways to evaluate and follow up with contacts, says Bob Mander, author of "Sales: Building Lifetime Skills for Success" (1999). "I'm always amazed to encounter individuals who lack so much as a business card at networking events," he says.
Here are six steps to improving your networking success:
1. Choose the right setting. "Business-people like to associate with other business people, so attend functions where these types of people will be. Make sure that the purpose of the function is to promote business and not just to socialize," says Nancy Roebke, executive director of ProfNet, Inc., a business-leads-generating service in Erie, Pa.
Mr. Mander advises entrepreneurs to select events that are designed to introduce people and promote business. "Hidden agendas and 'old boy' social clubs detract from the primary purpose of networking events," he says.
Chamber of commerce meetings, trade shows and networking organization meetings are good settings. "The people who attend are there for the same reason you are: to meet new people and develop new business relationships," says Ms. Roebke.
2. Target prospects. To find good prospects, don't just hand out business cards randomly. The best way to make contacts is to spend a few minutes with a limited number of people and then follow up, says Vikram Rajan, vice president of CoGrow Systems, Inc. a business-development and consulting firm in Freeport, N.Y.
One way to meet them is through accountants and attorneys, notes Mike Moradi, founder and former president of NanoSource Technologies Inc. in Norman, Okla. Many such professionals are happy to provide referrals because it helps them retain clients, he says.
Specialized law firms and accountants usually provide the best leads. "Find one who's a great networker but specializes in start-ups and/or your industry," says Mr. Moradi. And don't worry about offending your current lawyer or accountant: they'll forgive you, he says.
3. Be creative. Use ingenuity to meet specific contacts who can help. Ms. Michaels of Impression Impact wanted to meet Bruce Nelson, chairman and CEO of Office Depot, but didn't know how. When she attended a Success Strategy for Business Women Conference in Boca Raton, Fla., sponsored by the office retailer, she made a winning bid of $1,050 at a silent auction to have lunch with Mr. Nelson.
Colleagues sitting with her thought she was crazy to bid so high, but she wanted to find a creative way to pitch her idea for in-store marketing seminars for small businesses hosted by the retailer. "It was important for me to meet Mr. Nelson," she says. "I wanted to assess his interest in (my) small-business seminars." She admits it was a risky move, but it landed her two projects with the company and the potential for more at a fraction of the cost of printing a brochure or sending a mailing.
4. Have a goal (but don't be too obvious). Don't start networking until you know what you want to achieve for you or your startup. And, while you'll be networking for your own reasons, you'll strike a more responsive chord with new contacts if you focus on their concerns.
Learn how to speak to people in terms of WIIFT, or what's in it for them. This may help you create jointly beneficial opportunities, says Mr. Rajan. He recommends attending events not with "prospecting spears" in hand, but with your arms open and a willingness to learn from more experienced networkers.
5. Come prepared. Always carry your business cards. You never know when someone will ask for one. "We have initiated sales leads in the most unlikely places, including gyms, weddings, airport lounges and even the occasional ballgame," says Mr. Moradi.
One networker met an executive from a large company on vacation while the two were swimming at a hotel pool in Hawaii. "He landed an account with the firm when he produced a business card -- laminated of course -- from his swimming trunks," says ProfNet's Ms. Roebke.
6. Don't overwhelm contacts. Don't bore people with excessive details about your company when you first meet them. Save the specifics for a second meeting, unless your new acquaintance asks to know more. Always seem genuinely interested in contacts and try to determine their problems so you know how to help them.
"A great rapport strategy allows you to build rapport in seconds by asking, "What do you do? What do you like most? What do you like least? Where are you from? What is the perfect client for you?" says Mr. Kuschell.
When you're asked follow-up questions, be ready with a "15-second commercial" describing your key benefits. For example, you could say, "Do you know why individual sales are lagging? What I do is help show companies how to create explosive growth in their business."
When done correctly, your pitch will prompt the question: "How do you do that?"
Then you can begin a real conversation which may develop into an ongoing relationship, a new networking contact or even a new client.
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