A Critical Tool for Building Your Business

Search terms: networking, lead generation, referrals, business referrals, lead networks, referral exchange, business leads

Business owners are keenly aware that their satisfied customers can be powerful allies – a virtual sales force.  Many businesses will post the message “If you like our product (or service, please tell a friend!” in their store or on their literature.

Another, equally powerful, method of generating new business is to encourage other businesses – people who know you and the quality of your work - to generate leads for you.  In exchange, you attempt to generate leads for them, of course.  As several businesses begin working together to make referrals and exchange leads with each other, a network is born.

To facilitate the process, networking groups –or lead generation groups – have sprung up like wildflowers.  Such groups bring like-minded businesses together, with the intent of enabling them to develop long-lasting, mutually rewarding business relationships.

When you get a lead from someone in a networking group, you are getting a direct lead/referral from someone they know and trust - and a prospective customer who is usually ready to buy now.  These people are generally known to the person who gave you the referral, and are therefore much less likely to end up as bad accounts. This means a tremendous savings to you - less time in acquiring the new customer and less cost for advertising. These will also usually be people who are easier to work with, in that they will assume that you are reputable – and will respect you - based on the recommendation of your mutual acquaintance. This will allow you to more quickly develop rapport, and to more quickly close the sale.

To build a network — and help others build networks — you must build relationships. Relationships are a basic human need. Helping other people fulfill their need for relationships helps you, too. Repeated interaction encourages cooperation. People who repeatedly come into contact with each other tend to develop positive relationships, especially when they share a common goal.

Smart networking means building strong relationships that benefit both sides. If you are helping someone increase their business, and they are helping you to do the same, there's a good chance that new friendships will develop along the way. These friendships create a strong foundation for lasting, mutually beneficial relationships.

What happens at a networking group meeting? You will speak – not give a lecture, but give short presentations. You will learn how to quickly and easily explain what it is that you do. This experience will help to provide you with more confidence and skill for other times when you may have the opportunity to speak at larger gatherings.  But most importantly, you will learn how to describe and position your business.  What is it you do?  How is that different from what other businesses do, and how is it similar?  Why should a customer come to you, instead of your competitor? The networking skills you will learn and the habits that you will form through active networking will be extremely valuable.

When attending a networking event, go in with the mentality that you are going to see how many people you can help before the night is over. Ask every person you meet what he or she does for a living. Take notes on the back of their cards to show you genuinely care about what they are saying. Send them a thank you note via email that night or the first thing the next morning. Dig into your Rolodex and see if you can find a good lead for them to follow up on the next day. Have the attitude of “it’s not about me - it’s about them.” If you're looking to increase your business, make new connections and new friends, and you're willing to learn the process of networking from people who are available at networking groups to teach you, a professional networking group is a great way to make it happen!

On the other hand, the process doesn’t happen overnight.  Networking is a marathon, not a sprint. Don’t go into a networking event, or even a leads group, and expect to start closing business the next day. The idea is to meet new people, share what you do, and build relationships.  The leads will follow.  People who say “I went to a Chamber of Commerce event once and didn’t get anything out of it” don’t get the point.