Manufacturers and retailers aside, most small to medium scale businesses tend to get new customers through referrals and recommendations. Most service providers, in fact, rely on word of mouth influence from their existing customers to get new customers. Even online businesses have started relying on reviews to gain traction in their target audiences.
Referrals and recommendations, however, don’t manifest out of thin air. Commercial organisations have to work to create networks so that they can get new business. Despite this fact, if you were to ask a business whether they have a networking strategy or not, the answer you’ll most probably get will be a negative.
Most businesses don’t have a networking strategy in place either because they don’t realise its importance or because they don’t know how to create and work one. With this post, we’ll try to remedy that limitation.
Why Do You Need A Networking Strategy?
Statistically speaking, around 80 percent of small to medium scale businesses out there get about 80 percent of their overall revenue through referrals and recommendations. These numbers, by themselves, are enough to showcase the extreme importance of networking for businesses.
However, they only paint a partial picture because networking isn’t only about making a sale. It is also about reducing costs, improving efficiency, and any number of other operations related improvement. For instance, if your business develops a networking strategy, then it may end up finding a cheaper or better supplier of a raw material that your business cannot do without.
Even if you don’t own a business and are employed in one, a personal networking strategy can be fruitful in your career growth. For example, your networking strategy could help you find a better job with more pay, perks, or freedom.
It can’t be denied that networking is important, irrespective of whether you are a working professional or a businessman. So, let us help you create a networking strategy in a step by step manner.
Networking Strategy Step 1: Identify the Objectives
No strategy in the world can work without a set objective. A strategy without an objective, hence, is like a trip without a destination i.e. aimless. This is why the first step of creating a networking strategy is to identify the reasons why you need one in the first place.
It would be very simplistic to say that the purpose of the networking strategy is to create a network because networks can be used for various purposes.
For example, if you’re a professional then you may want a networking strategy that can help you establish a network that will further your career. On the other hand, if you’re a businessman, then the purpose of your networking strategy will be to either get more clients and customers or get more partners for your venture.
Other reasons that a network strategy is created for include getting access to specific business circles in specific industries, getting in touch with powerful introducers, deepening existing relationships, getting membership in support organisations, getting new job opportunities, and getting recognised as an authority figure in your sector.
Networking Strategy Step 2: Determine the Size of the Network
Identifying the objectives of your networking strategy will allow you to figure out how many contacts you need to bring your network to the level that you’re targeting. In a way, this can be seen as quantifying your intangible networking goals. This is important because without quantifying your intangible networking goals, there will be no way for you to gauge how successful your networking strategy is.
It will take a little bit of experience for your quantification estimates to become reliable and trustworthy. Initially, you may over target or under target but don’t worry. Networking is a long term exercise which means your networking strategy should also be long term. This will give you time to revise and modify how many contacts you really need to achieve your networking targets.
What you should remember while quantifying your networking goals in terms of number of contacts is segmentation. You can’t simply say that you need 50 more business contacts because the only way you can come to such a lump sum number is by randomly picking out of air.
Instead, you should be building your total contacts required number slowly and in small chunks. For instance, if the objective of your networking strategy is to learn more about your market and your target audience, then you can break the entire thing down to categories such as customers, suppliers, and competitors.
You can subsequently decide to speak to a certain number of customers to understand what they expect from the kind of products and offers that you usually provide. Similarly, you can decide to speak to a certain number of suppliers to try to figure out how to get better raw materials or product components. In the same manner, you can decide a certain number of competitors you need to analyse to understand what is new in the sector you operate in.
Networking Strategy Step 3: Define the Characteristics of Potential Contacts
You can’t just go out into the world and speak to any five of your customers if you’re trying to figure out the user-friendliness of your digital product. Some of your customers may take to your product like fish to water while others may have to trawl through your instruction manual. In fact, there will be a gradient to tackle.
So, if you truly want to know how easy your product is to use and your customer base consists of old and young alike, then you want to speak to the older people before the younger. Similarly, if you want to get in touch with a high volume capacitor supplier, then you can’t tap into any group of people. You need to find the right one by focusing on the industries that need capacitors in high volumes.
The trick is to define the characteristics of potential contacts. This isn’t all that different from how businesses define their target audiences. You simply use demographics, industry position, access to the areas you’re targeting, relevance to the information you need etc.
There are two layers to defining the characteristics of potential contacts. These are broad and narrow. The broad layer refers to coming up with less specific characteristics so that you can focus on specific groups. In the narrow layer, you want to get as specific as you want to be to get to the objectives of your network strategy. Doing both is important because both will end up saving you wasted time, effort, and resources in the long run.
Networking Strategy Step 4: Find the Right Events to Network
It isn’t easy to get in touch with people who you can turn into contacts with the help of your networking strategy. Direct approaches usually lead to a direct rejection. However, there are exceptions.
The biggest exception is events such as seminars and industry meets. The big question, therefore, is how to find relevant events where you can implement your networking strategy.
There is no easy answer because it depends upon your specific network strategy objectives. For instance, if you want to network with other businessmen involved in the same industry, then the best place for you to network with them is in trade association meetings. Similarly, if you’re looking for first time home buyers, then you may want to look at local consultancies.
Before the Digital Revolution, finding such events would’ve required much more effort. However, with the internet and social media networking, it’s now easier for businesses and professionals to find such events. Forums, trade websites, Facebook, LinkedIn, and other such platforms make finding such events a much simpler task.
Your networking strategy can be the difference between your business or career scaling up and remaining stagnant. Since, stagnation usually leads to contraction, it might be a good idea for you to devise a serviceable networking strategy and start implementing forthwith.