Social Capital Archives - Dr. Ivan Misner®
Strong trusted Network

Building a Strong Trusted Network

The best way to grow your business is by referrals generated from a strong trusted network. In the previous blog, I discussed building quality relationships. Growing more quality relationships in your trusted network will increase the number of referrals generated by the members in your network. What is a trusted network? How do you build a strong trusted network? This video further explains this concept.

A Strong Trusted Network

Quantity is good, but quality truly is king

What is important is the QUALITY, not the quantity, of the relationships that you have with the members of your network. Grow your business by growing a strong network of people who know all about your business and fully trust you. Furthermore, you completely trust every person in your network and have a full understanding of each of their businesses.  Finally, educate everyone regularly about the people you would love to be introduced to grow your business. That is a strong trusted network.

Imagine having your personal trusted network as part of a strong global network of 10,000 other trusted networks. Grow your local business with a global network. BNI’s (Business Network International) mission is to help members increase their business through a structured, positive, and professional referral marketing program that enables them to develop long-term, meaningful relationships with quality business professionals. In 2020, over 275,000 members of BNI worldwide passed over 11.5 million referrals which resulted in more than $16.2 billion USD in business. Visit a local BNI chapter meeting and learn how BNI can transform the future of your business.

Effective networking is not really what you know or who you know. It’s how well you know them that really counts. Therefore, the stronger the relationships are that you build with your network’s members, the more referrals you will receive from them.

Ask for a Favor

When Is It Appropriate to Ask for a Favor?

Most of us have been in situations where someone asked for a favor long before they built the social capital to make that kind of request, if they built any capital at all. Building deep referral relationships is almost completely dependent upon the social capital you have built with someone. Social capital is similar to financial capital in a very important respect. 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. Relationships are very much the same – referral relationships in particular.

How Alex asked for a favor

Alex was what I would call a casual business associate, but from early on after our introduction, every time I spoke to him, he invested in the relationship. He gave me ideas, gave me his time, he even did some work on a website for me mostly as a favor. He invested…and invested…and invested.

I kept asking how I could help him, to return the favor and reciprocate for all the kindnesses and great help he’d been to me. His answer every time was, “I don’t need anything. I’m happy to do this.”

This went on for almost a year. Every couple of months, Alex would show up on my radar and do something for me.

Then, one time, he phoned me and said, “I have a favor to ask…” and I stopped him right there.

“Yes!” I said.

“But you didn’t even hear what the favor is!” laughed Alex.

I replied that I didn’t have to hear what the favor was. I told him I knew him well enough to know he was not going to ask me something impossible, and that he had invested so much into the relationship that I would do anything in my power to help.

You may ask for a favor

Before you ask for a withdrawal, make sure to make an investment, and build a deep referral relationship. If you can answer “yes” to most or all of the following points about a person and his or her business, you would have a pretty deep referral relationship:

• 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 several of their goals for the year, including personal and/or business goals.
• You could call them at 9 o’clock at night if you really needed something.
• 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/or personal.
• You enjoy seeing them achieve success.
• They are “top of mind” regularly.
• You have open, honest talks about how you can help each other further.

X
Throughout my career, I have had huge number of folks come to me and ask me to promote something for them. The thing is, the majority of those who contact me have never met me, never had a conversation at all. They’ve never invested in the relationship, yet they want a withdrawal from it and ask me for a favor!
networking benefits

The Networking Benefits

Networking benefits outweigh the perceived obstacles. These obstacles include the time away from the office to the cost to join the networking group. However, the networking benefits far exceed these concerns. The biggest benefit of networking is building strong relationships with others. The more solid relationships you build, the more credible you become. The more your credibility grows, the more people will hire and recommend you. Therefore, there are networking benefits that affect your finances, customer spending, and the impression of the quality of your business.

The Financial Networking Benefits

Before looking at the financial networking benefits there are both soft- and hard-money costs to consider. “Hard money” includes credit cards, cash, checks, and other possessions with monetary value. The term “soft money” is used to assign value to services or the invested time you spend on your business, otherwise known as sweat equity.

The time investment in business networking also builds social capital. Businesses develop and maintain solid, professional relationships through successful networking which create the value behind social contacts. The value of your invested time – “soft money” – is actually greater than the value of your “hard money” spent. Calculate the value of soft-money investments in networking and building relationships. You will be surprised at the financial value you have delivered to your business.

Networking Benefits Include These Positive Wealth Effects

  • Added sales volume
  • Higher average transaction amount per sale
  • Greater closing ratio
  • Referrals tend to be very qualified professionals
  • Higher occurrences of leads and referrals
  • More repeat business
  • Greater positive word-of-mouth marketing benefits
  • More customer loyalty
  • Stronger community recognition
  • Greater perceived value

The Networking Benefits on the Impression of Quality

The impression of the quality of your business is powerful. Consumers are willing to pay more for services and products that they equate to be of higher quality. The impression people have about the quality of your business is enhanced through networking.

Networking allows others to share testimonials about your business and to say good things about you. They help to convey the image of quality for your business. Networking allows others to say things about you that may be considered bragging if you said them. Imagine how powerful it is when your fellow networkers believe in you, they cannot stop talking about you with people they know. Your name is passed along with more and more frequency and confidence.

Your networking efforts are rewarded in many ways. After you have repeatedly established proof of quality, you will be referred to in such a manner that will greatly enhance your customer spending, and positively affect your finances. In conclusion, these networking benefits greatly outweigh the perceived obstacles.

Former Classmates

Reconnect with Your Former Classmates

During the “back to school” season, I often recall my first day at the University of Southern California. This is where I pursued a doctorate in organizational behavior. One professor spent the first part of the class talking about the “elite network” of peers. We were going to be working alongside these peers and he talked about how we would build lifelong relationships with them. Instead, we spread out to chase our professional goals without any context in which to keep in touch after graduation. I have not networked with any of my former classmates over the years. Therefore, I have not given to or received from any of my former classmates a business referral.

Fortunately, the internet now offers a multitude of options to help you reconnect with old school friends and acquaintances. Here are three steps to convert those past relationships into useful new tools for your business.

to help you reconnect with old school friends and acquaintances. Here are three steps to convert those old relationships into useful new tools for your business.

Contact your school’s alumni services department. 

By being active with your alumni organization, you can share news about your business that may catch the eye of your fellow graduates. You can also research other alumni to find out who you may want to connect with.

Reconnect with your former classmates using social media.

LinkedIn is an online platform that connects the world’s professionals. A complete LinkedIn profile includes your educational background in addition to your professional experiences. You will likely find many of your former classmates there because LinkedIn will display anyone who attended college at the same time as you.

Facebook is a social networking site that makes it easy for you to connect and share with family and friends online. I hear stories all the time about how people have reconnected with classmates and childhood friends they have not seen in years.

Social media is best used as a brand-building tool. However, you can use it to find new sales leads to make a sale and close a deal. Write an occasional post on your pages asking your followers if they know anyone who might be a potential customer for your business. You can also occasionally mention a special deal, or announce a special event.  Encourage your followers to “like” and “share” your posts with the people in their networks.

Gently seek referrals.

Once you have organized your network, the next step is to tactfully tap your social capital. But be careful. Networking is about building stronger relationships, not closing a sale. If you immediately try to sell to an old classmate, they might drop, disconnect, or “un-friend” you. You have not talked to your classmates in years. Therefore, take the time to rebuild a strong relationship first.

I encourage you to connect with one of your former classmates during the coming week by using one of the online networking options. Once you have started reconnecting with old classmates, it’s important to keep track of these valuable contacts by setting up and maintaining a database system to organize your network to be able to follow-up with them regularly.

These tips will help you effectively reconnect with your former classmates so you do not have to sit around waiting for a reunion to give you the opportunity. The main thing is to keep in touch with these potentially wonderful business contacts.  Maintain a powerful personal network by contacting your old classmates (maybe go “old-school” and call them) regularly and adopt these tips now. 

Social Capital

Build Social Capital by Networking

Social capital, otherwise known as the value behind your social contacts, can be an extremely important resource in both business and life.  If you take as much care in raising and investing your social capital as you do your financial capital, you will experience benefits that can greatly enrich your life as well as multiply your material returns many times over. Investing in your networking is one of the best investments you can make to secure future success for yourself and others with whom you network. Below, I share my 4 step process to build your social capital, the international currency of networking.

Social Capital

This is acquired through networking because successful networking is all about building and maintaining solid, professional relationships. The trouble is we don’t have the natural community-like business relationships that existed before. Many business owners hardly know their neighbors, let alone the local businesspeople in town. Therefore, networking is critical to an individual’s success in business.

Effectively developing your networking can be a daunting task. However, doing so within a structured, organized networking framework will leverage your efforts. You begin building your capital to positively impact your bottom line.

Here are some keys to creating social capital

  • Give your clients a personal call
  • Call all the people who have referred business to you
  • List 50 people to stay in touch with
  • Follow up with everyone

As you invest your time in developing your networking, you are increasing your bottom line. Strive to make the most effective use of this investment. Do everything possible to thoroughly enhance the relationships you develop in the coming year because social capital leads to improved financial capital.

Watch the video and then take a minute to leave a comment below. I would love to hear your story about how investing in your social capital significantly paid off for you.

Social Capital

Investing in Your Social Capital

I’m sure all entrepreneurs have heard of financial capital, but many may not have heard of social capital. Social capital is, in fact, very similar to its monetary sibling. It, too, is accumulated by an individual or a business and used, or is available for use, in the production of wealth. Put more simply, it’s the accumulation of resources developed through personal and professional networks. These resources include ideas, knowledge, information, opportunities, contacts and, of course, referrals. Social capital is built by design, not chance.

Social capital is acquired through networking because successful networking is all about building and maintaining solid, professional relationships. The trouble is we don’t have the natural community-like business relationships that existed before. Many business owners hardly know their own neighbors, let alone the local businesspeople in town. Therefore, networking is critical to an individual’s success in business.

Effectively developing your social capital can be a daunting task. However, doing so within a structured, organized networking framework will leverage your efforts and help you begin building your balance of capital to positively impact your bottom line. Here are some keys to creating social capital that will help you form the foundation of your business endeavors:

Plan your word-of-mouth

I’ve learned a great deal about planning and starting new businesses. Many years ago, it used to surprise me that 50 percent of all businesses fail after only three years in operation. However, now that I know how little planning many businesses do, I’m surprised that only 50 percent fail. If you want to be successful in business, it’s critical that you plan your work and work your plan. Furthermore, part of your plan should involve your strategy for building your business through word-of-mouth.

Give referrals

Every day, week and month, entrepreneurs strive to build their businesses through referrals. Part of this process is to build a team of people whom we recommend and refer to. This is part of the process of building your social capital.

If you’re not already a member of a strong contact network, find a chapter near you and get started. There’s no better way to systematically develop a solid base for building social capital than in an organization dedicated to helping you succeed in this endeavor.

Show professionalism at all times

Being dependable, delivering a product on time, meeting appointments consistently and treating others with courtesy will give you a professional reputation. This will cause you to be remembered by those you wish to have become a contributor to your social capital.

It’s a dog-eat-dog climate in the business world today. Competition is fierce, and some entrepreneurs employ down-and-dirty tactics. Studies have shown that one of the most important factors in doing business by referral is someone’s “professionalism.” By remaining professional at all times, you’ll rise to the top of the barrel and succeed where others will fail.

As you invest your time in developing your social capital, know that you are, in fact, increasing your bottom line. Strive to make the most effective use of this investment. Do everything possible to thoroughly enhance the relationships you develop in the coming year because social capital definitely leads to improved financial capital.

Three Things Your Business Degree Didn’t Teach You

graduatingOne common misconception among business people, especially those new to the field, is that a bachelor’s degree in marketing or business will provide all the necessary skills to own, operate, or work in a business of any size.

Time and again I’ve seen men and women struggle in business, flabbergasted because they followed the steps taught to them as undergraduates. It isn’t until they get involved in post-degree programs specifically geared toward advanced business techniques, or professional organizations like BNI or the Referral Institute, that they pick up these three concepts that are truly paramount in business.

 

Social Capital

Relationships, and their potential value, are vital in business. These relationships can be in our personal or professional networks, but both can lead to business opportunities, quality referrals, new and innovative ideas, someone to bounce ideas off of, and ultimately, increased business success.

As you build relationships, identify their strengths and weaknesses and focus on fostering the weaknesses. While it can be counter-intuitive to focus on anything other than your business when trying to help it grow, putting effort into your relationships will ultimately lead to greater business success.

 

Emotional Intelligence

The ability to identify, assess and control one’s own emotions, as well as an astute awareness of the emotions of others improves communication in all facets of life and can up one’s connection game. In fact, studies show that a higher emotional quotient (EQ) can help develop more social capital.

When you can learn how individuals around you respond to you, and cater your interactions to the individual person, you will see the positive response received hit the roof. While not rocket science, it can be challenging, so as you work to develop your EQ don’t be discouraged if it doesn’t happen immediately.

 

Networking

You knew it was going here. This critically important business skill is grossly under-represented in higher education. This proficiency combines the elements of emotional intelligence and social capital, and is an important tool to have in your wheelhouse.

The vast majority of businesspeople say that in some form or fashion, they have gained some success through networking, and this isn’t a coincidence. Those who haven’t found networking success likely haven’t built a strong foundation of social capital and emotional intelligence, as networking is simply the mechanism used to combine word-of-mouth techniques and social capital.

 

In the same way businesses who refuse to adopt cutting-edge technology begin to fall to the wayside and face difficulties, business school graduates (and the schools they hail from) who do not adopt these lessons into their curriculum in some ways will quickly find themselves outdated and outpaced.

Are there other vital business skills you feel aren’t taught in general business education? How did you pick up those skills? I’d love to hear your thoughts, so please leave your comment in the forum below! Thanks!

When Is It Appropriate to Ask for a Favor?

In this video, I discuss how to identify and prepare for the appropriate time to ask for a favor within the context of a business relationship.

I explain how the concept of social capital is a key factor when it comes to asking favors and I tell a personal story where a business associate of mine named Alex went about building social capital with me in the absolute perfect way.

Watch the video now to learn the ONE thing you need to have with someone before you ask a favor of them and, also, how to spot when it would be a big mistake for you say yes to favors when you’re asked to do them by other people.

Do you have a story about how you built social capital with someone in a great way, how someone else built social capital with you in a memorable way, or how someone asked you for a favor when it wasn’t the right time?  I’d love to hear these stories as well as any other stories you might have that are related to this topic. Please share them in the comment forum below–thanks!

Building Social Capital Is the Groundwork for Future Payoff

In a video blog I posted recently, I talk about the Law of Reciprocity which is one aspect of social capital theory.  In today’s video, I specifically address what social capital is and why investing in social capital is one of the best investments you can make in order to secure future success for yourself and others with whom you network.

My friend Alex, whom I mention in this video, is a master at building social capital and there isn’t a person who knows him who wouldn’t help him in an instant in any way they could if  he asked them to.  Alex has an expansive support system comprised of a diverse array of people who are all willing and eager to help him succeed and it’s all because he dedicates himself 100% to investing in the relationships he builds with those around him.  If you could use a support system like Alex has (which I already know you could because we ALL could), then start creating ways to build social capital with those in your network at every opportunity.

Perhaps you’ve already got a story about social capital that’s similar to the one I share in this video about Alex, or a story about how you’ve built great social capital with someone who is now just itching to help you in any way they can.  If so, please go to www.SubmitYourNetworkingStory.com and share your story for consideration of inclusion in the upcoming networking book I’m writing with Jack Canfield, and Gautam Ganglani.  Also, I’d love for you to briefly summarize your story in the comment forum below as well.  Thanks in advance for your participation!

Leverage Your Achievements to Heighten Your Success

Success may be a lasting accomplishment, but the thrill of success is transitory; much of the joy is the journey.  Once it’s over, we begin to wonder, “What’s next?”  This feeling of emptiness cues us to step up and get ready for the next level because success goes on as long as we keep building new steps.  We graduate from one level and, equipped with what we’ve learned, go on to new accomplishments in the next.  Each accomplishment becomes something we can stand on to reach higher.  We can leverage our success.

Small successes can add up to major leverage.  Each experience, each skill learned or honed, each new technology adopted multiplies the results of our efforts.  The achievements leveraged can be our own, or those of other contributors in a team effort.  Those who work alone against tall odds to accomplish what others might consider mundane achievements often end up amassing powerful capabilities.  However they are combined, the whole can be greater than the sum of the parts if used to full effect.

The resources we find most useful as levers depend on both our immediate and our long-term goals.  Many are specialized, closely identified with a particular field or profession or industry.  Trial lawyers, politicians, and motivational speakers cultivate forensic skills, the ability to sway audiences.  This is a vital resource that can be transferred from one project to another, even in different fields.  The same goes for marketing skills, management expertise, and most leadership skills.  The more success we have achieved, the more easily we can apply these resources toward achieving new ends.

As a lever, success is also portable to others.  We can use it not only to help ourselves reach our own goals but to also help our associates, friends, colleagues, family members, even worthy strangers reach their goals.  Success contains many valuable and transferable components: experience, skills, wisdom, insight, confidence, enthusiasm, energy, money, reputation, sometimes just the outsize influence of fame.  These assets can be mobilized in pursuit of different ends, including the needs of others.  All that is necessary is to choose a worthy goal and turn the momentum of success in a new direction.

Networking is a structured system for leveraging success and thereby sharing its benefits.  Helping others achieve their goals not only leverages a person’s success for the benefit of others, but also brings the leverage full circle: what goes around comes around.  Although it springs from an initial good given without expectation of recompense, an altruistic act for a network contact accrues social capital.  The benefits provided eventually come back to the giver.

The ultimate leveraging of success is the philanthropy of those whose accomplishments have made them rich and who look for ways to give back to individuals who have helped them and to the community that nurtured their success.  Their rewards come not in the form of superfluous money or fame but in the prosperity of those they help and in the goodwill and approval of the community.  This is success of a whole new order–social immortality.

No matter where you are in your success journey, it’s important to remember that the joy really is in the journey There will be plenty of times when we not only don’t immediately achieve the success we’re aiming for, we actually end up completely failing at what we were trying to do; and that’s when it’s crucial to keep in mind what Henry Ford once said–“Failure is the opportunity to begin again intelligently.”  In other words, the experience we get in our journey to success is truly invaluable and that experience is what will end up fueling our greatest successes.

Success is a topic that has so many different aspects and perspectives to it and I’d really, really like to hear the thoughts you have as a result of reading this blog post.  Whether you have a story about your journey to success, what success means to you, the experience you’ve gotten/success you ultimately achieved from a past “failure,” or how you’ve leveraged your success to help others, I’d love for you to share your thoughts in the comment forum below.  Thanks in advance for your input and I’m looking forward to hearing from you!

NetTime: How Much Time Should You Spend Networking?

The secret to getting more business through networking is. . . spending more time doing it!   OK, well, it’s a little more complicated than that because you have to spend time doing the right things.  However, devoting the necessary time is the starting point.  So how much networking time (or NetTime) should you spend developing your personal network and what kind of results can you expect to see?

Based on a survey that I helped to write and conduct of over 12,000 business professionals from every populated continent in the world, we finally have a definitive answer to those questions.  The study found that people who said “networking played a role” in their success spent an average of 6.3 hours a week participating in networking activities.  On the other hand, the majority of people who claimed that “networking did NOT play a role” in their success spent only 2 hours or less per week developing their network.  

Clearly, those people who spent very little time engaged in the process felt that networking was not an effective way to build their business.  As with many other aspects of life, you clearly reap what you sow.  It’s no wonder that the people who didn’t invest as much time also did not realize as much reward.  This demonstrates the direct correlation between the amount of time you devote to the networking process and the degree of success that you will likely realize from it.

The typical person in the survey who spent a little over six hours a week networking generated almost 47 percent of all their business through referrals and networking activities.  Of the 12,000 global participants in the survey, women spent less time networking (6.19 hours compared to 6.44 for men), yet generated a higher percentage of their business through the process (49.44 percent compared to 43.96 percent for men).

Why would women spend less time and get a higher percentage of their business from referrals than men?  Well, we discovered that men tended to be more transactional in their networking activities.  That is they were more likely than women to be focused on the “business first and the relationship second.”  On the other hand, women were more likely to be relational in their networking activities.  In other words, they were more likely than men to “focus on the relationship first and do the business second.”

An emphasis on relationships first was clearly and undeniably a key factor in determining whether people were going to identify  networking as having played a role in their success. When we looked at the responses from all the participants who said that networking had played a role in their success and then compared them to those people who focus on relationships first, we discovered that the majority of respondents who felt they’ve achieved success through networking also felt that it was better to build the relationship first and then focus on the business.  Consequently, regardless of gender, business professionals who focused on the relationship first and the business second tended to do better than those business people who focused on the business first.

In other words, relationships beat transactions when it came to networking.  The reason that women seem to have done better in the global study was that women tended to be more relational then men.

Those who skip the relationship building and attempt to establish an “all business” interaction often discover that trust and goodwill are more than just window dressing – they are part of the social capital that energizes a mutually rewarding business relationship.  People who bypass relationship building are more likely to feel that networking has not contributed to their success, and they are probably right – because they’re doing it wrong or at least not doing it enough.

You may be reading this article and thinking – OK, I now know that I need to be spending at least 6 ½ hours a week networking.  Well, that’s true IF you want to be average (and what successful business person wants to be average)!   If on the other hand, you’d like to be above average – you need to devote more time than that to the cause.  The optimum amount of NetTime is more likely to be 8-10 hours a week if you want to be one of those people that are generating well over half their business from referrals.

How much NetTime do you spend each week?  More?  Less? and what percentage of business (total) do you get from your networking efforts?  Comment below.

4 Steps to Building Social Capital

Social capital, otherwise known as the value behind your social contacts, can be an extremely important resource in both business and life.  If you take as much care in raising and investing your social capital as you do your financial capital, you’ll experience benefits that can greatly enrich your life as well as multiply your material returns many times over.

In this short video, I explain that you don’t have to purposely become a networker to reap the benefits of social capital and I outline the four key steps to successfully building social capital.

Do you have a standout story about how investing in your social capital significantly paid off for you?  If so, please share it in the comments section–I’d love to hear about it!

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