Transactional or Relational Networking?string(39) "Transactional or Relational Networking?"

When it comes to successful business networking, it is important to recognize the difference between a transactional approach and a relational approach.

My book, “Business Networking and Sex (not what you think),” is based on a survey of 12,000 people from which we found that women and men DO network differently. I share more about it in this short video.

This video is part of my Master Class from the BNI®  2021 Global Convention.

Which is Better?

As your heard in the video, the survey of 12,000 people found that men tend to focus more on transactions than relationships, and women tend to be more relational in the way they approach business networking.

However, it also showed that all people who focused first on building relationships and then on business scored higher in success. When you are focused only on making a sale and completing the transaction, you are never going to create the trust and build the relationship that is needed to generate the business referrals you seek. 

My Experience

My personal tendency is to just go for the facts, and that is not an effective networking practice. It has taken many years for me to learn how to ask questions to find out more about the other person and to be more relational in the conversation.

Successful business networking takes both a mindset – a mental attitude, AND a skillset – a collection of abilities. When you network in a relational way by building connections with other people, you are going to generate more business. Remember, if your network is a mile wide but only an inch deep, it will never be a powerful network. It needs to be both WIDE and, in some places, very DEEP.

What is your experience? Have you found success through the business relationships you’ve built?

 

 

 

Related Blog Posts:

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Networking Is All About Referrals

Yes, it is true that networking IS all about referrals…

READ MORE

Networking Is Simple, But Not Easy

Networking Is Simple, But Not Easystring(34) "Networking Is Simple, But Not Easy"

Business networking is simple; it’s just not easy. If it were easy, everyone would do it and do it well… and people don’t! This is not a step-by-step process that you need to employ to network effectively. This is meant to get you to stop and think about all the articles, blogs, books, podcasts, and videos that you have read or seen in the past and are not yet following through in regard to what you learned. This blog is aimed at helping you to discover what you should be doing rather than focusing only on what you know.

I’ve done presentations around the world talking about how to apply networking to your everyday life. Occasionally someone comes up to me and says, “I’ve heard people talk about some of those things before.”  Hearing it for a year versus doing it for a year are completely different things. Success is about the “doing,” not just the “knowing.” 

I believe that ignorance on fire is better than knowledge on ice! The only thing more powerful is knowledge on fire.

It Looks Simple

There are so many things in life that look simple but are, in fact, not easy. For me, one of those is cooking. It always looks so simple. Some people can go into the kitchen and put a gourmet meal together in 30 to 40 minutes. Me? I get in the kitchen and burn water.

Small repairs around the house are another one of those things that look simple. Then I pick up a hammer and, well… it’s just not pretty. That’s when I’m reminded that I’m missing the “handyman gene.” It skipped a generation in my family. My dad could fix anything; he was incredibly capable with a toolbox. I am not. When I was 17 years old, he took me into the garage and solemnly said to me, “Son, you’d better go to college, because you’re never going to make a living with your hands!” That was good advice –  thanks, Dad.

Another one is the game of golf. Looks simple, right? I’m not talking about professional competition; I mean just going out and smacking the ball around some grass. It sure looks simple. I’ve learned however, that it is not easy.

There are so many things in our lives that look simple but are not easy. Business Networking is one of them. It’s a skill. It is a skill that takes commitment and effort to learn and apply consistently.

A Challenge for You

So, I have a challenge for you. Your assignment after reading this blog is to think of one idea in a book, article, video, podcast–anything that you’ve read or heard over the past year that you wanted to apply to your life but never quite got around to doing. 

I encourage you to find that article, locate that “something” you wanted to do and DO IT within the next seven days. If it’s something you do on an ongoing basis, then find a way to incorporate it into your life and/or your business.

All excuses are equal – so just do it.  Feel free to share the knowledge source (e.g., the video, book, article, etc.) you chose to focus on in the comments below.  The only thing better than applying knowledge is sharing it.

Success is the uncommon application of common knowledge.
You already have the knowledge. Now apply it with uncommon commitment.
It won’t be easy. But I assure you – it’s simple.

Are-Referrals-Always-Reciprocal

Are Referrals Always Reciprocal?string(32) "Are Referrals Always Reciprocal?"

Some people think about business networking as a game of Who is giving what to whom, always wondering how they can score more.  I caution those people that there is no rule that says, “For every referral you give, you can expect one in return.” Similarly, when you hand out more referrals, it does not mean that other business professionals will automatically do the same. It just doesn’t work that way in referral marketing. A referral is not always reciprocal.

Effective business networking is about building deep relationships with referral partners. Entrepreneurs who focus on giving first and asking “What can I do to help you?” instead of “What’s in it for me?” are usually more successful in their networking efforts.

Talk to Them

If you find that you are giving someone a lot of referrals and you are not getting anything in return, the first thing to do is to sit down with them. Be tactful and respectful. Rather than saying, “I have given you all of these referrals. How come you have not given any to me?” you can instead sit down with them and review all the business referrals you have given them in a way that shows you care about their success. Remember, it is not an interrogation: “Hey, I have given you this. I have given you that.” It is a conversation.

A good way to start the conversation is like this. “I think I have given you three referrals this year. I want to talk about how they worked out for you. I gave you this one to the ABC Company. How was that referral? Oh, that turned into business for you? What did you think of working with that person?”

Ask them how each and every referral you’ve given worked out for them. Discuss one at a time and thoroughly review that referral; ask questions about what transpired after you gave it to them. This is important. Make sure that the referrals you gave were as good as you think they were. Don’t make assumptions about them. You may have thought it was platinum and it turned out to be dirt.

Sometimes we find out that none of the referrals worked out. They may not have worked out because they were not quite as good as you thought. If they didn’t turn out as well as you thought that they would, talk about it. Ask them how you could improve in giving them quality referrals. And then listen to what they say!

By the way, that is a good question to ask even if the referrals did work out. “I am really glad that the referrals worked out. How could I improve in giving you additional quality referrals?” This is all part of building and strengthening the relationship.

How to Talk About You

After you have invested the time to talk about each referral you’ve given AND you find that all the referrals you gave to your networking partner were good and beneficial for them, you can tell them how glad you are that you were able to help them.
Then and ONLY then, do you say this:
“I am pleased that the referrals worked out for you; that is what our networking group is all about- supporting one another and giving each other referrals.” Then you can say that sending business referrals your way would be helpful to you, too. Ask if they have a few minutes now to talk about how they could find good referrals to give to you.

This is a genuine, caring, and calm conversation that comes from the intention of helping someone else. It is not based on assumptions or filled with accusations that may put someone on the defensive.

If you discover those referrals you gave didn’t work out, then I wouldn’t even go down the road of asking for reciprocal referrals. I would ask, if those didn’t work out, how can I do a better job for you? If you are doing business with someone who truly believes in Givers Gain®, they are going to ask the same of you.

Be Realistic

I am a realist. If there is someone in your business networking group that refuses to give you referrals, I can understand why you might not want to continue to refer them. However, that is rarely the case.

Remember – effective networking is about being relational, not transactional. What goes around comes around. And – it might not even come around from where you sent it. Sometimes you give a referral one place and receive a referral from someplace else. You might be getting referrals from people who you have never given a referral to.

We also want to be mindful of the value of the referrals. If we are talking about a florist and a real estate agent, the real estate agent is probably going to give the florist a whole lot more referrals than the florist is going to give to them. Although one good referral to the agent could be worth a lot of flowers for the florist. Keep in mind that it is not just the quantity, it is the quality, and the value of the referrals. All of these things have to go into the consideration.

As professionals, we must have these conversations with our networking partners. Only when you do, and find out that the referrals have, in fact, been good, can you then say, “I would love for you to be able to reciprocate if possible. Do you have time to talk about how you might be able to give referrals to me?”

Business Networking is a Marathonstring(33) "Business Networking is a Marathon"

Business networking truly is a marathon of an endeavor – it is most definitely NOT a sprint.  I have met many people who practice ‘hyperactive networking’ who approach their networking efforts at the speed of an all-out sprint. They want to be everywhere, meet everyone, and go, go, go at such a pace that they inevitably ‘collapse’ due to burn-out and have nothing to show for their efforts.

Activity is Not an Accomplishment

Years ago, I met a woman who was known as the consummate networker. She had hundreds, perhaps thousands of contacts, giving her a broad network made up of people from all different walks of life. She was very well known in her community as the go-to person for anything that anybody needed.

One day, she pulled me aside and dropped a bombshell…. she said that her networking efforts weren’t really paying off for her. She went on to tell me about all the groups that she went to, all the people she met, how she had made so many good contacts and was continuing to make more all the time, but she wasn’t getting any solid business from all her efforts. I asked her how many networking events she went to each week, and she said she was going to at least five, and sometimes she went to more!

Why wasn’t she seeing real results? Because despite her amazing talent for making contacts and gaining visibility, she never really got to the heart of what networking is all about – building relationships.  She was so busy running around and making appearances that she wasn’t ever learning how to actually “work” the business networks she had created to build deep relationships with people and develop credibility with them.

It’s true that she was visible in the community; she was very visible. The problem was that she viewed “activity” as an “accomplishment” when it came to her networking efforts. Her network was, in fact, a mile wide, but only an inch deep. She had not taken the next, and most important, step with the many people in her wide-reaching network. She never devoted the time to develop the kind of rapport with any of them that would allow them to really get to know her, like her, trust her, and want to pass referrals to her.

Networking is About Building Relationships

I recently saw the same thing with someone I’ve known for a few years. He made a consistent habit of going to every single networking meeting and event that he could go to, and he was incredibly visible. Not only was he always at networking meetings, he was always full of energy and enthusiasm from the time he arrived, to the time he left. Again, the problem was in no way due to the lack of activity, effort, or enthusiasm regarding putting himself out there and meeting new people.

The problem was that he was running around so much that he never stopped long enough to spend the time necessary to establish the kind of long-term roots that lead to an ongoing, reciprocal referral relationship. The end result was that he got a severe case of networking burnout! He went from going everywhere and meeting everyone possible, to going nowhere and meeting almost no one. A year later his business went under.

Networking is More About Farming Than It Is About Hunting

If your goal is to significantly grow your business by simply making as many contacts as possible, you will never build a powerful personal network. If you are networking with the ‘sprint’ approach, you’re almost guaranteed to get burned out. Constantly bouncing around from event to event is exhausting and ineffective. There needs to be a balance between the visibility-creating aspect of your networking efforts, and the credibility-creating aspects of your networking efforts.

One way to accomplish this is to schedule regular one-to-ones with people you’ve met, in order to go deeper in understanding the services that they offer, and how you might be able to refer them. Most importantly, it’s a way for them to do the same for you.

Case in point is another woman who was a real estate agent in California who shared with me that her business grew dramatically during a major recession in the past, because she decided to develop a network that was both wide and deep in some places.

She took my advice and did at least four one-to-ones a month with people in her network. She focused on building relationships. And once she was convinced that she had found a good business opportunity for some of her contacts, she would actually phone the contact on the spot and put them together with the person that she was meeting with. This created powerful introductions that led to business.

From this activity, she ended up giving twice as many referrals to other people as she had in the past. More importantly, she received twice as many referrals as she had from people in the past. She was treating the process more like a marathon than a sprint. This is a great example of how networking is more about farming than it is about hunting. It is all about building relationships with key people.

What is amazing about this story is that it happened at a time when businesses were dealing with a massive recession and the fallout from that recession. More importantly, the businesswoman was in a profession that was hit as hard or harder than the overall majority. Despite the conditions around her, she used her relationship building skills to create long-term referral relationships.

At its core, business networking is about taking the time to build genuine, trusted relationships. Yes, visibility is important, however, without building trust right along with it, visibility won’t get you very far in the long run. It is about treating networking like a marathon, not a sprint.

When it comes to networking, sometimes you have to slow down to go fast.

Give Up the Excuses and Invitestring(30) "Give Up the Excuses and Invite"

Many professionals and entrepreneurs know that whatever the current business climate might be, their networking groups are a consistent place for business referrals, resources, and support. Relationships built with like-minded people who want to help each other succeed are the ones that can sustain a business in challenging times.

I’ve heard wonderful stories from people whose investment in building strong relationships has made the difference in their business surviving and even thriving.

However, I am also surprised when those same people who say, “I love my networking group!” are often the ones who consistently attend the meetings alone. Without a visitor. Without inviting a friend to go with them.

I’m hearing a lot of excuses about why professionals who love business networking aren’t inviting other people to enjoy it, too. These are some of the excuses:
‘The economy is not good.’
‘The economy is too good.’
‘I don’t know anyone to invite.’
‘People I invite don’t show up.’

Well, guess what? I’ve been hearing the same excuses for the past 36 years! 

Why Invite People to Network with You

If you have received business from your networking groups, you KNOW the benefits of referral marketing. Remember, it’s okay to share. It’s okay to share those business opportunities with others, especially with people that you already know.

Think about every place you do business with – either professionally or personally. THEY may be looking to grow their company or increase their client base. As one of their customers, you obviously know, like, and trust them enough to give them your business, so why not invite them to meet your networking group?

There are enough business opportunities for everyone. When you embrace a Givers Gain® attitude and an abundance mindset, you know that sharing opportunities with others can bring beneficial connections, increased business referrals, and the joy of helping someone else succeed.

The Excuses

The Economy

When the economy is not good, people are struggling, they may not know where to turn to for help with their business – they need their networking group.

When the economy is good, people need their networking group because their competition is making it difficult for them to be successful. A trusted group of fellow professionals becomes a reliable source of referrals in ALL economies.

Don’t Know Anyone

Guess what? In the early days of BNI® I once said these words, “I don’t have anybody else to invite.” Well, was I wrong! A BNI Member gave me suggestions that helped me find lots of people to invite.
More ideas of who you can take to visit your networking group:
Your company’s vendors
Your company’s customers and clients
Your family and friends
Your neighbors – personal near your home, and work neighbors near your office

People you like. People who are fun. People you care about and want to help.
There are LOTS of people just waiting to meet your networking partners. Invite them.

They Don’t Show Up

“People I invite don’t show up.” That has happened to me. Yes, I’m the Founder of BNI, the world’s largest networking organization, and it has happened to me, too. It’s okay.

Dr. Mark Goulston says, “We have a lot less control over winning or losing at something than we do over trying or quitting something. Always try. You can eventually win. If you always quit, you can never win.”

This is so true. Get over the fear of rejection. Someone who says ‘no thanks’ to your invitation does not diminish your success in any way. Keep inviting. Some will say yes, some will say no. Continue inviting anyway. Keep giving people the opportunity to learn about networking.

Remember, excuses don’t bring results. You can have excuses, or you can have success.

Think back to your first visit with your favorite networking group. Think about the person that let go of their excuses and decided to invite YOU to that meeting.

Whether your business networking is in-person or online, you can extend an invitation to have someone visit the meeting with you.
Give up the excuses and INVITE. You’ll both be glad you did.

Show Up to Get More Referralsstring(29) "Show Up to Get More Referrals"

Have you ever gotten a haircut over the phone? Probably not. It is just one of those things that you have to actually be present for to get results.

It is the same with BNI® and other business groups. People join these organizations to increase their business through referral marketing. However, you have to show up at networking meetings to get more referrals and make more money.

The Effects of Being Absent

Years ago, I did a study in BNI about absenteeism. It showed that members who had fewer absences were the members that received a whole lot more business. One chapter reduced absenteeism by more than 50%. Their membership went up 55% and their referrals went up 71%!

Conversely, the study also showed that as the number of absences doubled, the amount of closed business a member generated fell by 50%. Members who think that regularly missing meetings doesn’t really matter are greatly mistaken. The data is crystal clear. You are sabotaging your own networking efforts if you pay for a membership in an organization and you don’t go to the meetings.

Building Relationships

Intellectually, we understand that it is important to build relationships, however it may not be obvious just how critical it is. The old adage “out of sight, out of mind” is absolutely true. It’s true in referral networking; it’s true in BNI with weekly chapter meetings, and it’s true with monthly business groups. For effective referral marketing, you have to participate – consistently participate.

Trust is built by meeting regularly, when your fellow networkers know they can count on seeing you every time. Being present at your chapter meeting helps you be top of mind and remembered by the other members during the time between the meetings. Attendance with the group is part of the process of building the relationship and is crucial for maintaining and strengthening your business relationships.

You cannot get a haircut over the phone. You cannot have a successful business group if you don’t show up. Absenteeism affects membership and referrals. High absenteeism results in low referrals. Low absenteeism results in high referrals.

It’s your choice. Miss meetings and lose business OR go to meetings and get more business. Remember, you have to show up to get more referrals.

Can You Network Too Much

Can You Network Too Much?string(25) "Can You Network Too Much?"

Before I share the answer about networking too much, I have a question for you. How many hours do you spend each week doing networking activities for your business or your job?
This is networking activity, not client appointments or cold calls. Include ALL of the different networking that you do.

Average or Beyond?

In the book, Business Networking and Sex (not what you think), my co-authors and I surveyed 12,000 businesspeople and shared the results.

We found that the average businessperson spends six and a half hours a week on their networking efforts. This includes BNI and networking group meetings, chambers of commerce, civic and service clubs.

If our goal is to be average, we have to spend six and a half hours a week. I think that eight hours a week is more effective.

Wow, 8 hours a week! At first, it might sound like a big number. We all agree that networking takes time. It takes time to plan our networking activities and it takes time to attend them. However, there is more we can do to get the MOST out of those activities.

Effective Use of Networking Time

Do you arrive early and stay after the event to talk with new people and deepen the relationships with those you already know?

Do you plan what are you going to say about your business while networking?

Do you talk about a specific part of your business with a clearly defined Target Market that others can easily identify?

Do you listen, really listen, when others share about their business, taking notes to help you find potential referrals for them?

Do you have a prepared testimonial for one of your networking partners, telling others what a good job they did for you or someone you referred to them?

Have you contacted two or three business friends to attend the networking event with you? Maybe someone who is already a good referral source for you – are they getting the benefits of business networking?

Remember to follow-up with those who will be attending the event with you. A quick call or text the day before is reassuring to them and lets them know you want them to be there.

Do you review your notes after each networking activity to see if you have a possible referral for a fellow businessperson?

If so, take action – contact those potential referrals and make the connection to your networking friend who can help them.

Do you meet with strategic networking partners outside of organized events to continue building a mutually beneficial business relationship?

How about sharing something you heard at a networking meeting on social media? Not to sell anything, just to help advertise the expertise and business of others in your group.

Are you continuously learning about effective networking skills, techniques, and opportunities? There are many resources available to those who dedicate time for their own education.

All of these suggestions can expand your networking time in effective ways to get the results you desire.

So, is it possible to network too much? The short answer is, yes; if you are spending more than eight hours a week, you might be spending a little too much. You don’t want to burn yourself out. However, you can do well with a thoughtful, intentional plan for your networking efforts.

Remember that networking is a marathon, not a sprint. We invest two things in business networking – time and money. For the best results, TIME is our major investment. Do we want average results? Or are we willing to Give more to Gain more?

Quality Relationships

Building Quality Relationshipsstring(30) "Building Quality Relationships"

Years ago, I learned that there is a correlation between the number of quality relationships and the number of referrals generated in a strong networking group. If you have a networking group of 16 members, that group has 120 relationships among all the members. However, a networking group of 32 members has 496 relationships among the members. Doubling the size of a networking group from 16 to 32 members has over four times the number of relationships. See the above graphic for an example of these relationships as chords of a circle. This video further explains this concept.

The Number of Quality Relationships Generated by the Members of a Strong Network

The number of relationships grows exponentially as the size of the group gets larger.  For example, if your networking group has 50 members, that networking group has 1225 relationships among the members. We have a few BNI chapters with 100 members. Therefore, they have 4950 quality relationships among their members. However, it is not the QUANTITY of members in your networking group that is important. What is important is the QUALITY of the relationships that you have with the members of your strong network. Growing more quality relationships in your networking group will increase the number of referrals generated by your members.

The formula: Number of Relationships = 0.5 x [(Number of members) x (Number of members – 1)] 

Quantity is good, but quality truly is king

The bottom line is that the more connections you have, (based on quality relationships of course), the more referrals you generate.  Grow your business by growing a strong network of quality relationships. For decades, I have seen groups that are twice the size of other groups in an area generate several times more referrals than their smaller counterparts.  The math is pretty significant and consistent. If you know your connections well enough to be able to call and ask for a favor–and get it–that is a powerful network.

Effective networking is about building strong relationships. If you approach the first months or year of your involvement in a networking group with the sole motivation of building relationships first by getting to know the other members well, you will be far ahead of the game. One of the most important things I’ve learned over the years is that it is not really what you know or who you know. It’s how well you know them that really counts. People do business with people they know and trust. The more relationships you build with your members, the more referrals you can give to your members, and the more referrals you will receive from them.

building deep referral relationships

Get More Out of Networking by Building Deep Referral Relationshipsstring(66) "Get More Out of Networking by Building Deep Referral Relationships"

To become successful at networking, you need to be building deep referral relationships. Many people rely on referrals from others as a primary source of business. However, not everyone who relies on referrals is successful.

Many people have surface-level referral relationships.  They know just enough about a referral source’s business to get by. They probably could not tell you anything else about the business than you can read on their business card. They have not built enough social capital with their referral relationships to count on them when they need something.

Building deep referral relationships is almost completely dependent upon the social capital you have built with someone. Social capital is like financial capital. To amass financial capital, you have to invest and grow your assets. You have to have money in the bank before you can make a withdrawal.

Building Social Capital Is the Groundwork for Future Payoff

In this video, I discuss why Building Social Capital is one of the best investments you can make to secure future success for yourself and others with whom you network.

 

Do you have a personal story about social capital similar to the one I shared in this video about Alex? Please share your story in the comments below about how you have built great social capital with someone who is now just itching to help you in any way they can.

Are You Building Deep Referral Relationships?

Before you ask for a referral, make sure you have built a deep referral relationship first by knowing the following points about that person:

  • You believe they are an expert at what they do.
  • You trust them to do a great job and take great care of your referred prospects.
  • You have known each other for at least one year.
  • You understand at least three major products or services within their business and feel comfortable explaining them to others.
  • You know the names of their family members and have met them personally.
  • You have both asked each other how you can help grow your respective businesses.
  • You know at least five of their goals for the year, including personal and business goals.
  • You could call them at 9 p.m. if you needed anything.
  • You would not feel awkward asking them for help with either a personal or business challenge.
  • You enjoy the time you spend together.
  • You have regular appointments scheduled, both business and personal.
  • You enjoy seeing them achieve further success.
  • They are “top of mind” regularly.
  • You have open, honest talks about how you can help each other further.

Referral Relationships Reality Review:

  1. What conclusions do you have about the depth of your current referral relationships?
  2. Are your relationships more or less in line with these points?
  3. What points can you improve upon to deepen your relationships?

Over the years, people have asked me to promote something for them.  It happens to me almost daily on LinkedIn. Now, I don’t want to pick on LinkedIn.  It can happen on any social media platform. The majority of those who contact me have never actually met me or had a previous conversation with me. They never invested in the relationship, yet they wanted a withdrawal from it. Please stop and do not pitch to me (or anyone) on LinkedIn.

You may be shocked at the level of personal knowledge required for building deep referral relationships. I completely disagree if you believe that referrals should be all about business. Referrals are personal. It takes a lot to develop this type of relationship. When you give a referral, you give a little of your reputation away. You need to know the person that is going to affect your reputation but those who do will certainly succeed at building a business from referrals.

Encourage Employees to Network

Five Ways to Encourage Employees to Networkstring(43) "Five Ways to Encourage Employees to Network"

Too many entrepreneurs focus on bringing in new business themselves or in tandem with the sales force but overlook their support staff as a source of referrals. Building word-of-mouth for your business is not just the responsibility of your marketing or sales department. As you might imagine, it’s far better to engage your entire staff in your word-of-mouth marketing campaign-not only at startup, but also throughout the life of your business. Here are five tips on ways to encourage employees to network:

1. Include networking in the job description for each and every employee

Often, if a new hire knows upfront that he’s expected to incorporate networking into his job, it will happen.

2. Have clear and reasonable expectations.

If your company manufactures a very obscure product, your staff might have a hard time bringing in tons of referrals. However, keep in mind that people are more important in the networking process than the type of product being sold. When you have the right person, he or she will be able to build a network around any kind of product or service.

3. Teach your staff about how to network effectively for the company.

Hold focus groups where you role-play ways to ask for referrals from other customers, friends, and family. Bring in local networking experts for in-house training. If you belong to a weekly networking group, bring your staff to those meetings one at a time so each member can see firsthand what networking can produce. This also helps your networking partners feel that they know your business better since they’ve been able to meet the people in your company.  Until you teach someone how to do something effectively, expecting them to do it well or even at all is unrealistic.

4. Motivate your staff to bring referrals to the company.

My wife once worked for a business owner who incorporated monetary bonuses into her word-of-mouth marketing expectations. For every new customer, she was given a bonus. It was a win-win arrangement for the company, as each new customer brought in revenue well above the bonus amount, and my wife felt rewarded each time one of her referrals came through the door.

Having a bonus system in place made it obvious that she would be attending chamber meetings with the boss and developing other connections in the community while passing out business cards and flyers for the company. To properly execute this idea, check with your CPA or tax preparer.

You might even establish a “networker of the month” status for the staff, using a reserved parking spot or an overnight hotel stay somewhere fun as a reward. Make the motivation something that’s relevant to your industry and, most of all, exciting to your staff.

5. Be sure your staff sees you practicing your networking skills.

Often, we as entrepreneurs don’t share with our staff the amount of time and energy we put into building and maintaining our businesses utilizing word-of-mouth marketing. I have always felt very strongly about this point. If I am going to expect my staff to do something, motivate and reward them for doing it, I better let them see me doing it as well. All too often, networking is something done behind the scenes and not necessarily in front of the staff.

One way to change this is to track how much business you brought in, as well as the staff’s numbers. Imagine the pride one competitive staff member will have when he or she breaks your number. Imagine the profits your company will realize when everyone in the company focuses on growing the business.

Networking is a group activity. Make sure to encourage employees to network and get your whole team on board with the process.

Three R's of Networking

The Three R’s of Networkingstring(33) "The Three R’s of Networking"

Do you know the Three R’s of Networking? Remember, networking is not selling. Therefore, these three are slightly different from the Three R’s’ of Selling.  Networking, however, can help you develop a successful word-of-mouth-based business. The Three R’s of Networking are Relationships, Reliability, and Referrals.

Relationships

Word-of-mouth is about “relationship marketing.” If you approach the first year of your involvement in a networking group with the sole motivation of getting to know the other members well, you will be far ahead of the game. One of the most important things I’ve learned over the years is that it is not really what you know or who you know; rather, it’s how well you know them that really counts! People do business with people they know and trust.

In order for word-of-mouth marketing to work for you, you first have to build a strong foundation with the people you hope will refer you to others. That takes time, and the amount of time it takes varies from profession to profession. Obviously, some professions are much more sensitive than others to the development of referrals. So find reasons to meet with each person outside the networking meeting. Get to them, and work on having them get to know you better. Make it clear that you value your relationship with each one of them.

Reliability

For the first year or so in a networking group, you are putting in your time. Your referral partners are testing you, checking you out and making sure that you deserve to have their valuable clients and contacts turned over to you. Therefore, you must be credible to the other professionals with whom you hope to network. Bear in mind that you should feel the same way, too. Before you risk your reputation with your clients by referring them to someone who takes less care of them than you would want to be taken, you must be very sure that the person to whom you refer them is reliable! How else are you going to know that unless you use them personally over a period of time?

Referrals

After cultivating relationships and proving yourself to be reliable, you get referrals as the end result. In order for someone to receive, someone else has to give. This holds so true with referrals. I would suggest you perform a reality check to see just how effectively you are referring to the people in your networking group. You might be surprised to find how little you actually refer others, or that you consistently refer the same two or three people.

If you aren’t tracking your referrals (both given and received), it’s time to start tracking them. Look for patterns. I would anticipate that in the months following a month you were particularly active in referring others, you will find that you are receiving more referrals! I have seen the “what goes around, comes around” principle illustrated over and over in BNI, the networking organization I founded years ago.

This is a natural progression and one that can’t really be rushed. I know it can seem frustrating at times when you are anxious to see your bottom line increase quickly from all the referrals you are anticipating receiving, but believe me, if you are patient and apply these techniques, you will see word-of-mouth marketing work for you in a big way.

Word-of-Mouth Marketing

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Word-of-mouth marketing is often considered one of the oldest and most powerful forms of advertising. In fact, most business people understand that it works–they just don’t know how it works.

If you want to be successful at developing word-of-mouth for your business, you should be as organized and thoughtful about it as you are about other types of advertising and marketing. In fact, if you take this approach, eventually, you can get most of your business exclusively through word-of-mouth! The key to creating a successful word-of-mouth program lies in developing a formal plan for systematically meeting people and cultivating relationships with them. Here are ten ways for you to get your own word-of-mouth marketing program off the ground.

Avoid being a cave dweller.

Get out and meet people. Start by setting a goal for the number of appointments you’ll establish with people you wish to develop networking relationships with every week. Social capital works for everybody, not just people who set out purposefully to become networkers.

Ask for the referral.

There are specific techniques you can learn and develop that will help you hone your ability to ask for the referrals you want. One such technique is to ask “Who do you know who…?” You would then list several types of people you can help, such as someone who is new to the area, someone recently married or someone who has just started a business.

Join three networking groups.

Consciously select at least three different business or networking groups to join in the next three months. These groups might include chambers of commerce, community service groups and trade associations. When joining various organizations, make sure you select a well-rounded mix of business groups in which to participate. Try to avoid being in more than one group per category (i.e., two chambers of commerce), as this will divide your loyalties and put you in a position where you’ll be making promises to too many people.

Create referral incentives.

Develop a creative incentive to encourage people to send referrals your way. A music store owner, for instance, sends music tickets to people who refer business to him. Another example is the chiropractor who posts thank-yous on a bulletin board in his waiting area to all his patients who referred patients to him the previous month.

Learn, learn, learn for lifelong learning.

Spend time developing your networking skills. Read books and articles on networking, listen to tapes, and talk to people who network well. Networking is an acquired skill.

Act like a host.

When attending a business mixer, act like a host, not a guest. You are wasting your time at mixers if you stand around visiting with coworkers or others you already know rather than meeting new contacts and introducing them around. These events offer a great way to increase your visibility! If appropriate, ask to be the ambassador or visitor host in the organizations to which you belong. As such, it will be your official duty to meet people and introduce them to others.

Create an elevator pitch.

Invest time in developing a brief message about your business that explains what you do. What would you say? I want you to keep in mind that this is not a sales pitch; it is a creative and succinct way to generate interest in the listener. When you introduce yourself to others, use your elevator pitch. Chances are, this will help them remember you and what you do. Keeping these seven rules in mind when you create an elevator pitch will set you apart from the crowd.

Take notes and follow up.

When you meet someone and exchange cards, take a few moments to flip the card over and jot down some information about them or their business that will help you remember them and follow up with them later. This is a very simple, yet powerful, way to make a great first impression that can be developed into a mutually beneficial networking partnership. When you follow up, I recommend that you offer opportunities, whether a simple piece of information, a special contact, or a qualified business referral.

Talk less and listen more.

Remember that a good networker has two ears and one mouth and uses them accordingly. Our success in networking depends on how well we can listen and learn. The faster you and your networking partner learn what you need to know about each other, the faster you’ll establish a valuable relationship.

Collaborate and help others.

People don’t care how much you know until they know how much you care.  Helping people shows that you care. Connect with people outside of business meetings whenever possible. Drop notes, letters and articles that might be of interest to them in the mail. Call to check in with them or invite them to events you may be attending that might be of interest.

You are potentially linked to a vast network beyond your own sphere. By implementing the tactics above, you will receive benefits from that network. Maximize your opportunities to cultivate networking relationships with others, and you will see just how effective word-of-mouth marketing can be!

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