When I started out in my own business fifteen years ago, I thought that business networking was the way to acquire leads, opportunities, and referrals—in short, the best sales strategy I could pursue. So I networked at Chamber of Commerce events and business roundtable events and women in business events and small business events and technology events and venture events and entrepreneur events, ad infinitum.
After a couple of years, I did a study of all the networking events my team and I had attended, the total number of hours (and registration fees) that we expended, and the total amount of business that we had generated directly or indirectly through networking. Know what I found out? Not one dime of new business. Nada. Zilch.
Networking has certain values—meeting people, collecting business cards, putting your face and your company out there. So if those things are important, that’s okay. But none of those are directly driving sales. Here are the top four reasons that networking is not a sales strategy:
- It’s Unfocused. Successful companies grow by targeting the companies that they want to do business with. They have a clear, narrow focus on a particular type of customer that is right for them. Networking events are haphazard—they include “members” for example (like members of the Chamber of Commerce), or “interest groups” (like women in business), or “industry verticals” (like banking). But within those categories lies a broad array of people representing a broad array of companies and interests, most of which are not in your target group.
- It’s Misguided. Every solopreneur or company rep who attends a networking event is hoping to meet buyers. But guess who you meet instead? Other sellers! The buyers don’t attend networking events. They are far too busy doing their jobs. If their company sends people to networking events, they are typically junior people, not those who could actually meet with you to discuss a sale. And those junior people are interesting in generating sales for their company, not in talking to other sellers.
- You’re Off Stage. I’ll give you my example of a Venture Club which I attended monthly for a couple of years-actually a very good venture club but not good for sales! When I joined, he movers and shakers always huddled in the front of the room and spoke from the podium and did not mingle much except with their few key guests. Many academics, politicians, and economic development executives had key roles (note: they are not buyers.) If your company was in the throes of seeking new venture capital, and if you had secured one of the coveted 5-minute presentation slots (2 per month), then that was the place for you to be. But for any other small business owner, it was not going to lead to sales.
- It’s Expensive. In addition to membership fees, lunches, possibly travel, conference fees and other meeting costs, networking events require a lot of time. The opportunity cost can be extremely high. If you are a key producer in your company (owner, executive, sales manager or representative), consider what you could be doing if you were not attending events.
Those are four key reasons that I believe networking events to be anything but a sales strategy. So if you put a high reliance on networking, you put yourself and your company at risk.
Now—the one exception. There are many reasons other than sales to be visible in your community. You want to be known as a player, as a contributor, as someone who matters. The way to do that is to confine your networking to the support of charitable endeavors. When you support and pay to participate in fundraising events, you do indeed get to mingle with big company leaders, not just their supporting staff. And not only will you meet people that you won’t meet at any kind of networking events, you will also build yours and your company’s reputation among the most successful business leaders in your community. Begin to get involved as a volunteer and eventually as a board member, and your “networking” activities will indeed bring you business.
What’s been your experience with networking? We’d love to hear from you.